Internet industry stakeholders are keeping an eye on legislation intended to provide the Securities and Exchange Commission with additional authorities to protect investors. The bill, introduced by Rep. Paul Kanjorski, D-Pa., earlier this month, could come before the House Financial Services Committee as soon as next week, sources tell Tech Daily Dose.

According to the bill text, "any Internet service provider that, on or through a system or network controlled or operated by the Internet service provider, transmits, routes, provides connections for, or stores any material containing any misrepresentation... shall be liable for any damages caused thereby, including damages suffered" by the Securities Investor Protection Corporation, an entity that protects investors from financial harm if a broker-dealer company fails.

Under the measure, the ISP would be liable if it has "actual knowledge that the material contains a misrepresentation [or] in the absence of actual knowledge, is aware of facts or circumstances from which it is apparent that the material contains a misrepresentation [and] upon obtaining such knowledge or awareness, fails to act expeditiously to remove, or disable access to, the material."