Jack Reed: “as this legislation makes clear, those rulings that reject the reckless standard, or the Second Circuit's pleading…”

“as this legislation makes clear, those rulings that reject the reckless standard, or the Second Circuit's pleading standard are clearly wrong and a threat to the security of our markets. Mr. President, with assurances that proper protections for investors will remain in place, I am pleased to support the 1998 Act, thus moving toward an efficient, national uniform standard for securities class action lawsuits. I trust that higher courts will adhere to current principles of legislative history and case law to rule that the pleading and scienter standards continue to protect investors and that we will remain true to our commitment and fix any error. Additionally, as expressed in votes during the mark-up of this legislation, I am concerned that the definition of class action, as currently included in the bill, is too broad. Specifically, by defining a class as those whose claims have been consolidated by a state court judge, the bill infringes upon the rights of individual investors to bring suit; a situation sponsors have sought to avoid. I hope that this issue can be resolved today on the floor. Finally, I have appreciated the expert analysis that the Chair, Commissioners, and staff of the Securities and Exchange Commission have provided on this issue. I thank them for their assistance.”