Rep. Tom Bliley Statement.
May 19, 1998.
Source: House Commerce Committee. The document was created by scanning and converting to HTML a print copy.
Statement of the Honorable Tom Bliley
Chairman, Committee on Commerce
Before the Subcommittee on Finance and Hazardous Materials
Hearing on H.R. 1689
Securities Litigation Uniform Standards Act of 1997
I am proud to have been a part of the bipartisan effort that led to the historic passage of the Private Securities Litigation Reform Act two years ago. That Act, the only Presidential veto override of the 104th Congress, brought beneficial change in the regulation of our capital markets.
I am proud to. have been part of that effort because it has helped to reduce a terrible drain on our economy that has hurt U.S. investors and U.S. companies. Prior to passage of the Act, meritless strike suits were costing our investors and companies upwards of $3.5 billion every year. That is money that should be spent on growing companies, creating jobs, paying dividends to shareholders, contributing to the growth of our economy -- not just the growth of the bank accounts of lawyers pocketing fees based on settlements of claims that had no merit to begin with.
Today we will hear testimony about building on that achievement. Legislation has been introduced to prevent trial lawyers from circumventing the protections of the Reform Act. This legislation makes Federal court the exclusive venue for securities class actions. In this way, the trial bar will not be able to use state court as a means of evading the changes of the Reform Act.
Securities Litigation Reform Accomplished four reforms:
(1) It set forth a heightened pleading standard;
(2) It established proportionate liability;
(3) it provided for a stay of discovery; and
4) It provided for a safe harbor for projections.
I believe that Congress should build on the success that Securities Litigation Reform has brought to our markets. These markets are national in scope and should be governed by national rules.
I commend Chairman Oxley for holding this thorough hearing. I thank Mr. Dingell, Mr. Manton and Mr. Markey for their cooperation in creating a balanced and complete hearing.
I look forward to hearing the testimony of the witnesses.