[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 636 Introduced in House (IH)]







108th CONGRESS
  1st Session
                                H. R. 636

 To repeal the provisions of the Private Securities Litigation Reform 
  Act and the Securities Litigation Uniform Standards Act that limit 
          private securities actions, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            February 5, 2003

  Mr. Stupak introduced the following bill; which was referred to the 
 Committee on Financial Services, and in addition to the Committee on 
   the Judiciary, for a period to be subsequently determined by the 
  Speaker, in each case for consideration of such provisions as fall 
           within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
 To repeal the provisions of the Private Securities Litigation Reform 
  Act and the Securities Litigation Uniform Standards Act that limit 
          private securities actions, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Shareholder and Employee Rights 
Restoration Act of 2003''.

SEC. 2. REPEAL OF PROVISIONS OF LAW LIMITING SHAREHOLDER ACTIONS UNDER 
              THE SECURITIES LAWS.

    (a) Repeals.--The following provisions of law are repealed:
            (1) Subsections (b), (c), and (d) of section 27 of the 
        Securities Act of 1933 (15 U.S.C. 77z-1(b), (c), (d)).
            (2) Section 27A of the Securities Act of 1933 (15 U.S.C. 
        77z-2).
            (3) Section 21E of the Securities Exchange Act of 1934 (15 
        U.S.C. 78u-5).
            (4) Section 11(f)(2) of the Securities Act of 1933 (15 
        U.S.C. 77k(f)(2)).
            (5) Subsections (b) through (f) of section 16 of the 
        Securities Act of 1933 (15 U.S.C. 77p(b)-(f)).
            (6) Subsection (f) of section 28 of the Securities Exchange 
        Act of 1934 (15 U.S.C. 78bb(f)).
    (b) Additional Amendments To Protect Shareholder Actions and 
Whistleblowers.--Section 21D of the Securities Exchange Act of 1934 (15 
U.S.C. 78u-4) is amended--
            (1) in subsection (a)--
                    (A) by striking paragraph (8); and
                    (B) by redesignating paragraph (9) as paragraph 
                (8);
            (2) in subsection (b)--
                    (A) by inserting ``, but not the sources of those 
                facts,'' after ``particularity all facts'' in paragraph 
                (1);
                    (B) by striking ``strong'' in paragraph (2);
                    (C) by striking paragraph (3);
                    (D) by redesignating paragraph (4) as paragraph 
                (3); and
            (3) by striking subsections (c) through (f).
    (c) Conforming Amendments.--
            (1) Section 16 of the Securities Act of 1933 (15 U.S.C. 
        77p) is amended by striking ``(a) Remedies Additional.--Except 
        as provided in subsection (b), the rights'' and inserting ``The 
        rights''.
            (2) Section 22(a) of the Securities Act of 1933 (15 U.S.C. 
        77v(a)) is amended--
                    (A) by striking ``except as provided in section 16 
                with respect to covered class actions,''; and
                    (B) by striking ``Except as provided in section 
                16(c), no case'' and inserting ``No case''.
            (3) Section 28(a) of the Securities Exchange Act of 1934 
        (15 U.S.C. 78bb(a)) is amended by striking ``Except as provided 
        in subsection (f), the rights'' and inserting ``The rights''.

SEC. 3. RESTORATION OF AIDING AND ABETTING LIABILITY.

    (a) Securities Act of 1933.--Section 20 of the Securities Act of 
1933 (15 U.S.C. 77t) is amended by adding at the end the following new 
subsection:
    ``(h) Prosecution of Persons Who Aid or Abet Violations.--For 
purposes of subsections (b) and (d), any person who knowingly or 
recklessly provides substantial assistance to another person in the 
violation of a provision of this title, or of any rule or regulation 
hereunder, shall be deemed to violate such provision to the same extent 
as the person to whom such assistance is provided. No person shall be 
liable under this subsection based on an omission or failure to act 
unless such omission or failure constituted a breach of a duty owed by 
such person.''.
    (b) Securities Exchange Act of 1934.--Section 20(e) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78t(e)) is amended to read 
as follows:
    ``(e) Prosecution of Persons Who Aid or Abet Violations.--For 
purposes of subsections (d)(1) and (d)(3) of section 21, or an action 
by a self-regulatory organization, or an express or implied private 
right of action under this title, any person who knowingly or 
recklessly provides substantial assistance to another person in the 
violation of a provision of this title, or of any rule or regulation 
thereunder, shall be deemed to violate such provision and shall be 
liable to the same extent as the person to whom such assistance is 
provided. No person shall be liable under this subsection based on an 
omission or failure to act unless such omission or failure constituted 
a breach of a duty owed by such person.''.
    (c) Investment Company Act of 1940.--Section 42 of the Investment 
Company Act of 1940 (15 U.S.C. 80a-41) is amended by adding at the end 
the following new subsection:
    ``(f) Prosecution of Persons Who Aid or Abet Violations.--For 
purposes of subsections (d) and (e), any person who knowingly or 
recklessly provides substantial assistance to another person in the 
violation of a provision of this title, or of any rule, regulation, or 
order hereunder, shall be deemed to violate such provision to the same 
extent as the person to whom such assistance is provided. No person 
shall be liable under this subsection based on an omission or failure 
to act unless such omission or failure constituted a breach of a duty 
owed by such person.''.
    (d) Investment Advisers Act of 1940.--Section 209(d) of the 
Investment Advisers Act of 1940 (15 U.S.C. 80b-9) is amended--
            (1) in subsection (d)--
                    (A) by striking ``or that any person has aided, 
                abetted, counseled, commanded, induced, or procured, is 
                aiding, abetting, counseling, commanding, inducing, or 
                procuring, or is about to aid, abet, counsel, command, 
                induce, or procure such a violation,''; and
                    (B) by striking ``or in aiding, abetting, 
                counseling, commanding, inducing, or procuring any such 
                act or practice''; and
            (2) by adding at the end the following new subsection:
    ``(f) Prosecution of Persons Who Aid or Abet Violations.--For 
purposes of subsections (d) and (e), any person who knowingly or 
recklessly provides substantial assistance to another person in the 
violation of a provision of this title, or of any rule, regulation, or 
order hereunder, shall be deemed to violate such provision to the same 
extent as the person to whom such assistance is provided. No person 
shall be liable under this subsection based on an omission or failure 
to act unless such omission or failure constituted a breach of duty 
owed by such person.''.

SEC. 4. LIMITATIONS PERIOD FOR IMPLIED PRIVATE RIGHTS OF ACTION.

    Section 27A of the Securities Exchange Act of 1934 (15 U.S.C. 78aa-
1) is amended to read as follows:

``SEC. 27A. LIMITATIONS PERIOD FOR IMPLIED PRIVATE RIGHTS OF ACTION.

    ``(a) In General.--Except as otherwise provided in this title, an 
implied private right of action arising under this title shall be 
brought not later than 3 years after the date on which the alleged 
violation was discovered.
    ``(b) Effective Date.--The limitations period provided by this 
section shall apply to all proceedings pending on or commenced after 
the date of enactment of the Shareholder and Employee Rights 
Restoration Act.''.
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