John Sarbanes: “I say to my colleague, as I understand it, this is what transpired. The 1995 act was being interpreted at the district…”

“I say to my colleague, as I understand it, this is what transpired. The 1995 act was being interpreted at the district court level, the Federal district court level--the legislative history of it--that the act's pleading standards eliminated liability for reckless conduct. Now, the SEC has come to us and said we should codify a reckless conduct right of action into the Federal standard. The legislation before us does not have such a codification. Now, there is language in the report, but we do not have a codification. So you have the problem about the legislative history for the 1998 act. And it is not quite clear to me how it will supplant the legislative history for the 1995 act. A codification would do that but that is not in this bill.”