Wayne Allard: “Mr. Chairman, abuses of securities litigation are particularly excessive. This act restricts the filing of frivolous…”

“Mr. Chairman, abuses of securities litigation are particularly excessive. This act restricts the filing of frivolous suits by imposing stricter conditions. The act requires class action suits to have plaintiff steering committees to ensure that the interests of the lawyers do dominate those of the plaintiffs. It equalizes individual plaintiff awards in a class action suit and restricts named plaintiffs from filing more than five suits in a 3-year period. The act also allows the court to order the ``lower pays'' rule in unjustified cases. The plaintiff has a greater burden of proof under this act, which allows the defendant to avoid liability if there is no intentional deceit. Also, the plaintiff must prove that loss was incurred because of reliance on a fraudulent statement. Finally, the act protects publishers of market predictions if the forecasts are well-reasoned but do not hold true. Without these reforms, plaintiff lawyers can file securities cases with few restraints.”