Bill Would Combat Fraud With Data-Sharing Network.

A bill to prevent fraud in financial services--such as the type financier Martin Frankel is accused of--took another step forward in the U.S. House.

Under the Financial Services Antifraud Network Act, insurance regulators would gain V access to the FBI fingerprint database.

The bill, H.R. 1408, passed the House Financial Services Committee on June 27.

The legislation seeks to create an anti-fraud network for information sharing about financial-services professionals among the nation's more than 250 financial regulators, Rep. Michael G. Oxley, R-Ohio, chairman of the House Committee on Financial Services, said in a statement.

The network would be "quick and inexpensive," Oxley said. "Many financial regulators already keep industry-specific databases of bad actors. H.R. 1408 would link these existing anti-fraud records via a net work that may be as simple as a computer search engine. In this way, the regulators could effectively pool their information and shut down fraud at its inception," he said.

The legislation was partially inspired by Frankel, a former Wall Street financier who was barred from the securities profession only to be indicted several years later for allegedly defrauding six small insurance companies of some $215 million. Frankel is jailed without bond, awaiting a jury trial scheduled for the fall. Supporters of the bill, which was introduced by Rep. Mike Rogers, R-Mich., say it could have prevented crimes such as those Frankel is accused of committing.

Under the bill, regulators would decide what information would be shared and how often. However, the regulators are directed to share only public final disciplinary and formal enforcement actions taken against financial companies and professionals, Oxley said.