On the recordMay 13, 2010
I have sought recognition to comment further about the pending amendment to make tortfeasors, under the Securities Act, liable for civil damages; that is, people who engage in fraudulent conduct. We have a deep recession. Millions of people have lost their jobs. There were enormous financial losses. There were many contentions of fraudulent practices being responsible for that conduct. In this act, we are seeking to reform Wall Street. The practice had been, the law had been, for decades, under the Securities Act, someone who was cheated, defrauded by people who practice under the Securities Act could sue them. That would involve those aiders and abettors and people in the chain beyond the principal would be responsible. I have offered an amendment on behalf of myself and Senators Reed, Kaufman, Durbin, Harkin, Leahy, Levin, Menendez, Whitehouse, Franken, Feingold, and Merkley to reinstate the law prior to what it had been prior to the decision of the Supreme Court. The Supreme Court has held that aiders and abettors are not liable and that there is a requirement that the defendant must have made the representation directly to the person buying or selling the securities, which is a sharp reversal from what the law had been. It is anomalous, unheard of, to have criminal liability under the Federal Criminal Code for aiding and abetting but not to have liability under the civil claims.
