Ed Markey: “one of the most shameful things that has occurred during the course of the debate on this bill was the covert attempt…”

“one of the most shameful things that has occurred during the course of the debate on this bill was the covert attempt that was made to eviscerate the ability of the SEC and defrauded investors to sue reckless wrongdoers. In the Silicon Graphics case, a Federal District Court in California actually ruled that the act had eliminated recklessness as a standard for liability under the Federal securities laws, subsequently concluding that only deliberate recklessness, a legal oxymoron, would meet the Reform Act's pleading standards. Now, while I oppose this bill, I also feel quite strongly that if this bill is to become law, we needed to make it absolutely clear that we had not changed the scienter requirements in either the Reform Act or in this legislation. During floor consideration of the House version of this bill, my colleague from California articulated his view that the standard did not include recklessness. I strongly disagree, and believe that this mischaracterized the intent of Congress in both the Securities and Exchange Act of 1934, and the Reform Act of 1995, for which I was a conferee, along with the gentleman from Michigan (Mr. Dingell), and the currently pending legislation.”