Jack Reed: “as a supporter of the Private Securities Litigation Reform Act of 1995 I am pleased to support S. 1260, the Securities…”

“as a supporter of the Private Securities Litigation Reform Act of 1995 I am pleased to support S. 1260, the Securities Litigation Uniform Standards Act of 1998. The bill will create a uniform standard for securities class action lawsuits against corporations listed on the three largest national exchanges. Class action suits are frequently the only financially feasible means for small investors to recover damages. Yet, such lawsuits have also been subject to abuse, draining resources from corporations while inadequately representing the interests of investor plaintiffs. Mr. President, in 1995, I voted to curtail such abusive litigation. It was obvious then that some class action suits were being filed after a precipitous drop in the value of a corporation's stock, without citing specific evidence of fraud. These lawsuits inflict substantial costs upon corporations, harming the business and its shareholders. Unfortunately, since passage of federal procedures protecting corporations from such suits there has been some attempt by class action plaintiffs to circumvent these safeguards by filing similar lawsuits in state courts. Mr. President, this Act will preempt this circumvention, creating a national standard for class action suits involving nationally traded securities. I favor this legislation because it recognizes the national nature of our securities markets, provides for more efficient capital formation, and protects investors.”