[Congressional Record Volume 141, Number 106 (Tuesday, June 27, 1995)]
[Senate]
[Pages S9183-S9185]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 AMENDMENTS SUBMITTED ON JUNE 27, 1995

                                 ______


          THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

                                 ______


                       D'AMATO AMENDMENT NO. 1476

  Mr. D'AMATO proposed an amendment to the bill (S. 240) to amend the 
Securities Exchange Act of 1934 to establish a filing deadline and to 
provide certain safeguards to ensure that the interests of investors 
are well protected under the implied private action provisions of the 
act; as follows:

       On page 121, line 1, delete the word ``expectation,''.
                                 ______


              SARBANES (AND LAUTENBERG) AMENDMENT NO. 1477

  Mr. SARBANES (for himself and Mr. Lautenberg) proposed an amendment 
to the bill S. 240, supra; as follows:

       Beginning on page 112, strike line 1 and all that follows 
     through page 126, line 14, and insert the following:

     SEC. 105. SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS.

       (a) Consideration of Regulatory or Legislative Changes.--In 
     consultation with investors and issuers of securities, the 
     Securities and Exchange Commission shall consider adopting or 
     amending rules and regulations of the Commission, or making 
     legislative recommendations, concerning--
       (1) criteria that the Commission finds appropriate for the 
     protection of investors by which forward-looking statements 
     concerning the future economic performance of an issuer of 
     securities registered under section 12 of the Securities 
     Exchange Act of 1934 will be deemed not be in violation of 
     section 10(b) of that Act; and
       (2) procedures by which courts shall timely dismiss claims 
     against such issuers of securities based on such forward-
     looking statements if such statements are in accordance with 
     any criteria under paragraph (1).
       (b) Commission Considerations.--In developing rules or 
     legislative recommendations in accordance with subsection 
     (a), the Commission shall consider--
       (1) appropriate limits to liability for forward-looking 
     statements;
       (2) procedures for making a summary determination of the 
     applicability of any Commission rule for forward-looking 
     statements early in a judicial proceeding to limit protracted 
     litigation and expansive discovery;
       (3) incorporating and reflecting the scienter requirements 
     applicable to implied private actions under section 10(b); 
     and
       (4) providing clear guidance to issuers of securities and 
     the judiciary.
       (c) Securities Exchange Act of 1934.--Title I of the 
     Securities Exchange Act of 1934 (15 U.S.C. 73a et seq.) is 
     amended by inserting after section 13 the following new 
     section:

     ``SEC. 37. APPLICATION OF SAFE HARBOR FOR FORWARD-LOOKING 
                   STATEMENTS.

       ``(a) In General.--In any implied private action arising 
     under this title that alleges that a forward-looking 
     statement concerning the future economic performance of an 
     issuer registered under section 12 was materially false or 
     misleading, if a party making a motion in accordance with 
     subsection (b) requests a stay of discovery concerning the 
     claims or defenses of that party, the court shall grant such 
     a stay until the court has ruled on the motion.
       ``(b) Summary Judgment Motions.--Subsection (a) shall apply 
     to any motion for summary judgment made by a defendant 
     asserting that a forward-looking statement was within the 
     coverage of any rule which the Commission may have adopted 
     concerning such predictive statements, if such motion is made 
     not less than 60 days after the plaintiff commences discovery 
     in the action.
       ``(c) Dilatory Conduct; Duplicative Discovery.--
     Notwithstanding subsection (a) or (b), the time permitted for 
     a plaintiff to conduct discovery under subsection (b) may be 
     extended, or a stay of the proceedings may be denied, if the 
     court finds that--
       ``(1) the defendant making a motion described in subsection 
     (b) engaged in dilatory or obstructive conduct in taking or 
     opposing any discovery; or
       ``(2) a stay of discovery pending a ruling on a motion 
     under subsection (b) would be substantially unfair to the 
     plaintiff or to any other party to the action.''.

                                 ______


              SARBANES (AND LAUTENBERG) AMENDMENT NO. 1478

  Mr. SARBANES (for himself and Mr. Lautenberg) proposed an amendment 
to the bill S. 240, supra; as follows:

       On page 114, strike lines 7 and 8, and insert the 
     following:
       ``(1) made with the actual knowledge that it was false or 
     misleading;
       On page 121, strike lines 1 and 2, and insert the 
     following:
       ``(1) made with the actual knowledge that it was false or 
     misleading;
                                 ______


                       GRAHAM AMENDMENT NO. 1479

  Mr. GRAHAM proposed an amendment to the bill S. 240, supra; as 
follows:

       On page 104, after line 22, insert the following:
       (c) Early Evaluation Procedures.--
       (1) 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:
       ``(j) Early Evaluation Procedures in Class Actions.--
       ``(1) In general.--In a private action arising under this 
     title that is filed as a class action pursuant to the Federal 
     Rules of Civil Procedure, if the class representatives and 
     each of the other parties to the action agree and any party 
     so requests, or if the court upon motion of any party so 
     decides, not later than 60 days after the filing of the class 
     action, the court shall order an early evaluation procedure. 
     The period of the early evaluation procedure shall not extend 
     beyond 150 days after the filing of the first complaint 
     subject to the procedure.
       ``(2) Requirements.--During the early evaluation procedure 
     described under paragraph (1)--
       ``(A) defendants shall not be required to answer or 
     otherwise respond to any complaint;
       ``(B) plaintiffs may file a consolidated or amended 
     complaint at any time and may dismiss the action or actions 
     at any time without sanction;
       ``(C) unless otherwise ordered by the court, no formal 
     discovery shall occur, except that parties may propound 
     discovery requests to third parties to preserve evidence;
       ``(D) the parties shall evaluate the merits of the action 
     under the supervision of a person (hereafter in this section 
     referred to as the `mediator') agreed upon by them or 
     designated by the court in the absence of agreement, which 
     person may be another district court judge, any magistrate-
     judge or a special master, each side having one peremptory 
     challenge of a mediator designated by the court by filing a 
     written notice of challenge not later than 5 days after 
     receipt of an order designating the mediator;
       ``(E) the parties shall promptly provide access to or 
     exchange all nonprivileged documents relating to the 
     allegations in the complaint or complaints, and any documents 
     withheld on the grounds of privilege shall be sufficiently 
     identified so as to permit the mediator to determine if they 
     are, in fact, privileged; and
       ``(F) the parties shall exchange damage studies and such 
     other expert reports as may be helpful to an evaluation of 
     the action on the merits, which materials shall be treated as 
     prepared and used in the context of settlement negotiations.
       ``(3) Failure to produce documents.--Any party that fails 
     to produce documents relevant to the allegations of the 
     complaint or complaints during the early evaluation procedure 
     described in paragraph (1) may be sanctioned by the court 
     pursuant to the Federal Rules of Civil Procedure. 
     Notwithstanding paragraph (2), subject to review by the 
     court, the mediator may order the production of evidence by 
     any party and, to the extent necessary properly to evaluate 
     the case, may permit discovery of nonparties and depositions 
     of parties for good cause shown.
       ``(4) Evaluation by the mediator.--
       ``(A) In general.--If, at the end of the early evaluation 
     procedure described in paragraph (1), the action has not been 
     voluntarily dismissed or settled, the mediator shall evaluate 
     the action as being--
       ``(i) clearly frivolous, such that it can only be further 
     maintained in bad faith;
       ``(ii) clearly meritorious, such that it can only be 
     further defended in bad faith; or
       ``(iii) described by neither clause (i) nor clause (ii).
       ``(B) Written evaluation.--An evaluation required by 
     subparagraph (A) with respect to the claims against and 
     defenses of each defendant shall be issued in writing not 
     later than 10 days after the end of the early evaluation 
     procedure and provided to the parties. The evaluation shall 
     not be admissible in the action, and shall not be provided to 
     the court until a motion for sanctions under paragraph (5) is 
     timely filed.
       ``(5) Mandatory sanctions.--
       ``(A) Clearly frivolous actions.--In an action that is 
     evaluated by the mediator under paragraph (4)(A)(i), upon 
     final adjudication of the action, the court shall include in 
     the record specific findings regarding compliance by each 
     party and each attorney representing any party with each 
     requirement of rule 11(b) of the Federal Rules of Civil 
     Procedure.
       ``(B) Mandatory sanctions.--If the court makes a finding 
     under subparagraph (A) that a party or attorney violated any 
     requirement of rule 11(b) of the Federal Rules of 

[[Page S 9184]]
     Civil Procedure, the court shall impose sanctions on such party or 
     attorney in accordance with rule 11 of the Federal Rules of 
     Civil Procedure.
       ``(C) Presumption in favor of attorneys' fees and costs.--
       ``(i) In general.--Subject to clauses (ii) and (iii), for 
     purposes of subparagraph (B), the court shall adopt a 
     presumption that the appropriate sanction for failure of the 
     complaint to comply with any requirement of rule 11(b) of the 
     Federal Rules of Civil Procedure is an award to the opposing 
     party of all of the reasonable attorneys' fees and other 
     expenses incurred as a direct result of the violation.
       ``(ii) Rebuttal evidence.--The presumption described in 
     clause (i) may be rebutted only upon proof by the party or 
     attorney against whom sanctions are to be imposed that--

       ``(I) the award of attorneys' fees and other expenses will 
     impose an undue burden on that party or attorney; or
       ``(II) the violation of rule 11(b) of the Federal Rules of 
     Civil Procedure was de minimis.

       ``(iii) Sanctions.--If the party or attorney against whom 
     sanctions are to be imposed meets its burden under clause 
     (ii), the court shall award the sanctions that the court 
     deems appropriate pursuant to rule 11 of the Federal Rules of 
     Civil Procedure.
       ``(6) Extension of early evaluation period.--The period of 
     the early evaluation procedure described in paragraph (1) may 
     be extended by stipulation of all parties. At the conclusion 
     of the period, the action shall proceed in accordance with 
     Federal Rules of Civil Procedure.
       ``(7) Fees.--In a private action described in paragraph 
     (1), each side shall bear equally the reasonable fees and 
     expenses of the mediator agreed upon or designated under 
     paragraph (2)(D), if the mediator is not a judicial 
     officer.''.
       (2) Securities exchange act of 1934--Section 21 of the 
     Securities Act of 1933 (15 U.S.C. 78a) is amended by adding 
     at the end the following new subsection:
       ``(l) Early Evaluation Procedures in Class Actions.--
       ``(1) In general.--In any private action arising under this 
     title that is filed as a class action pursuant to the Federal 
     Rules of Civil Procedure, if the class representatives and 
     each of the other parties to the action agree and any party 
     so requests, or if the court upon motion of any party so 
     decides, not later than 60 days after the filing of the class 
     action, the court shall order an early evaluation procedure. 
     The period of the early evaluation procedure shall not extend 
     beyond 150 days after the filing of the first complaint 
     subject to the procedure.
       ``(2) Requirements.--During the early evaluation procedure 
     described under paragraph (1)--
       ``(A) defendants shall not be required to answer or 
     otherwise respond to any complaint;
       ``(B) plaintiffs may file a consolidated or amended 
     complaint at any time and may dismiss the action or actions 
     at any time without sanction;
       ``(C) unless otherwise ordered by the court, no formal 
     discovery shall occur, except that parties may propound 
     discovery requests to third parties to preserve evidence;
       ``(D) the parties shall evaluate the merits of the action 
     under the supervision of a person (hereafter in this section 
     referred to as the `mediator') agreed upon by them or 
     designated by the court in the absence of agreement, which 
     person may be another district court judge, any magistrate-
     judge or a special master, each side having one peremptory 
     challenge of a mediator designated by the court by filing a 
     written notice of challenge not later than 5 days after 
     receipt of an order designating the mediator;
       ``(E) the parties shall promptly provide access to or 
     exchange all nonprivileged documents relating to the 
     allegations in the complaint or complaints, and any documents 
     withheld on the grounds of privilege shall be sufficiently 
     identified so as to permit the mediator to determine if they 
     are, in fact, privileged; and
       ``(F) the parties shall exchange damage studies and such 
     other expert reports as may be helpful to an evaluation of 
     the action on the merits, which materials shall be treated as 
     prepared and used in the context of settlement negotiations.
       ``(3) Failure to produce documents.--Any party that fails 
     to produce documents relevant to the allegations of the 
     complaint or complaints during the early evaluation procedure 
     described in paragraph (1) may be sanctioned by the court 
     pursuant to the Federal Rules of Civil Procedure. 
     Notwithstanding paragraph (2), subject to review by the 
     court, the mediator may order the production of evidence by 
     any party and, to the extent necessary properly to evaluate 
     the case, may permit discovery of nonparties and depositions 
     of parties for good cause shown.
       ``(4) Evaluation by the mediator.--
       ``(A) In general.--If, at the end of the early evaluation 
     procedure described in paragraph (1), the action has not been 
     voluntarily dismissed or settled, the mediator shall evaluate 
     the action as being--
       ``(i) clearly frivolous, such that it can only be further 
     maintained in bad faith;
       ``(ii) clearly meritorious, such that it can only be 
     further defended in bad faith; or
       ``(iii) described by neither clause (i) nor clause (ii).
       ``(B) Written evaluation.--An evaluation required by 
     subparagraph (A) with respect to the claims against and 
     defenses of each defendant shall be issued in writing not 
     later than 10 days after the end of the early evaluation 
     procedure and provided to the parties. The evaluation shall 
     not be admissible in the action, and shall not be provided to 
     the court until a motion for sanctions under paragraph (5) is 
     timely filed.
       ``(5) Mandatory sanctions.--
       ``(A) Clearly frivolous actions.--In an action that is 
     evaluated under paragraph (4)(A)(i) in which final judgment 
     is entered against the plaintiff, the plaintiff or 
     plaintiff's counsel shall be liable to the defendant for 
     sanctions as awarded by the court, which may include an order 
     to pay reasonable attorneys' fees and other expenses, if the 
     court agrees, based on the entire record, that the action was 
     clearly frivolous when filed and was maintained in bad faith.
       ``(B) Clearly meritorious actions.--In an action that is 
     evaluated under paragraph (4)(A)(ii) in which final judgment 
     is entered against the defendant, the defendant or 
     defendant's counsel shall be liable to the plaintiff for 
     sanctions as awarded by the court, which may include an order 
     to pay reasonable attorneys' fees and other expenses, if the 
     court agrees, based on the entire record, that the action was 
     clearly meritorious and was defended in bad faith.
       ``(6) Extension of early evaluation period.--The period of 
     the early evaluation procedure described in paragraph (1) may 
     be extended by stipulation of all parties. At the conclusion 
     of the period, the action shall proceed in accordance with 
     Federal Rules of Civil Procedure.
       ``(7) Fees.--In a private action described in paragraph 
     (1), each side shall bear equally the reasonable fees and 
     expenses of the mediator agreed upon or designated under 
     paragraph (2)(D), if the mediator is not a judicial 
     officer.''.
       On page 105, line 5, strike ``(j)'' and insert ``(i)''.
       On page 106, line 25, strike ``(l)'' and insert ``(k)''.
       On page 108, line 24, strike ``(k)'' and insert ``(j)''.
       On page 109, line 8, strike ``(l)'' and insert ``(k)''.
       On page 126, line 19, strike ``(m)'' and insert ``(l)''.
       On page 127, line 6, strike ``(m)'' and insert ``(l)''.
                                 ______


                        BOXER AMENDMENT NO. 1480

  Mrs. BOXER proposed an amendment to the bill S. 240, supra; as 
follows:

       At the appropriate place in title I, insert the following 
     new section:

     SEC.   . CONSEQUENCES OF INSIDER TRADING.

       (a) Securities Act of 1933.--Section 13A of the Securities 
     Act of 1933, as added by section 105 of this Act, is amended 
     by adding at the end the following new subsection:
       ``(h) Consequences of Insider Trading.--
       ``(1) In general.--Notwithstanding subsection (c), the 
     exclusion from liability provided for in subsection (a) does 
     not apply to a false or misleading forward-looking statement 
     if, in connection with the false or misleading forward-
     looking statement, the issuer or any officer or director of 
     the issuer--
       ``(A) purchased or sold a material amount of the equity 
     securities of the issuer (or derivatives thereof), as 
     reflected in filings with the Commission; and
       ``(B) financially benefited from the forward-looking 
     statement.
       ``(2) Definition.--For purposes of this subsection, the 
     term `material amount' means--
       ``(A) with respect to an issuer, equity securities of the 
     issuer of any class having a total value of not less than 
     $1,000,000; and
       ``(B) with respect to an officer or director of an issuer, 
     holdings of that officer or director of any class of the 
     equity securities of the issuer having a total value of not 
     less than $50,000.''.
       (b) Securities Exchange Act of 1934.--Section 37 of the 
     Securities Exchange Act of 1934, as added by section 105 of 
     this Act, is amended by adding at the end the following new 
     subsection:
       ``(h) Consequences of Insider Trading.--
       ``(1) Consequences of insider trading.--Notwithstanding 
     subsection (c), the exclusion from liability provided for in 
     subsection (a) does not apply to a false or misleading 
     forward-looking statement if, in connection with the false or 
     misleading forward-looking statement, the issuer or any 
     officer or director of the issuer--
       ``(A) purchased or sold a material amount of the equity 
     securities of the issuer (or derivatives thereof), as 
     reflected in filings with the Commission; and
       ``(B) financially benefited from the forward-looking 
     statement.
       ``(2) Definition.--For purposes of this subsection, the 
     term `material amount' means--
       ``(A) with respect to an issuer, $1,000,000 worth of any 
     class of the equity securities of the issuer; and
       ``(B) with respect to an officer or director of an issuer, 
     $50,000 worth of the holdings of that person of any class of 
     the equity securities of the issuer.''.
       Amend the table of contents accordingly.
                                 ______


                        BIDEN AMENDMENT NO. 1481

  Mr. BIDEN proposed an amendment to the bill S. 240, supra; as 
follows:

       At the appropriate place insert:

     SEC.   . AMENDMENT TO RACKETEER INFLUENCED AND CORRUPT 
                   ORGANIZATIONS ACT.

       Section 1964(c) of title 18, United States Code, is amended 
     by inserting before the period ``, except that no person may 
     rely upon 

[[Page S 9185]]
     conduct that would have been actionable as fraud in the purchase of 
     sale of securities to establish a violation of section 
     1962'', provided however that this exception shall not apply 
     if any participant in the fraud is criminally convicted in 
     connection therewith, in which case the statute of 
     limitations shall start to run on the date that the 
     conviction because final.
                                 ______


                BINGAMAN (AND BRYAN) AMENDMENT NO. 1482

  Mr. BINGAMAN (for himself and Mr. Bryan) proposed an amendment to the 
bill S. 240, supra; as follows:

       On page 105, line 25, insert ``, or the responsive pleading 
     or motion'' after ``complaint''.
       On page 107, line 20, insert ``, or the responsive pleading 
     or motion'' after ``complaint''.
                                 ______


                    SPECTER AMENDMENT NOS. 1483-1485

  Mr. SPECTER proposed three amendments to the bill S. 240, supra; as 
follows:

                           Amendment No. 1483

       Beginning on page 105, strike line 1 and all that follows 
     through page 108, line 17, and insert the following:

     SEC. 103. SANCTIONS FOR ABUSIVE LITIGATION.

       (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:
       ``(j) Sanctions for Abusive Litigation.--In any private 
     action arising under this title, if an abusive litigation 
     practice relating to the action is brought to the attention 
     of the court, by motion or otherwise, the court shall 
     promptly--
       ``(1) determine whether or not to impose sanctions under 
     rule 11 or rule 26(g)(3) of the Federal Rules of Civil 
     Procedure, section 1927 of title 28, United States Code, or 
     other authority of the court; and
       ``(2) include in the record findings of fact and 
     conclusions of law to support such determination.''.
       (b) Securities Exchange Act of 1934.--Section 21 of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78u) is amended by 
     adding at the end the following new subsection:
       ``(l) Sanctions for Abusive Litigation.--In any private 
     action arising under this title, if an abusive litigation 
     practice relating to the action is brought to the attention 
     of the court, by motion or otherwise, the court shall 
     promptly--
       ``(1) determine whether or not to impose sanctions under 
     rule 11 or rule 26(g)(3) of the Federal Rules of Civil 
     Procedure, section 1927 of title 28, United States Code, or 
     other authority of the court; and
       ``(2) include in the record findings of fact and 
     conclusions of law to support such determination.''.
                                                                    ____

                           Amendment No. 1484

       Beginning on page 108, strike line 24 and all that follows 
     through page 109, line 4, and insert the following:
       ``(k) Stay of Discovery.--
       ``(1) In general.--In any private action arising under this 
     title, the court may stay discovery upon motion of any party 
     only if the court determines that the stay of discovery--
       ``(A) would avoid waste, delay, duplication, or unnecessary 
     expense; and
       ``(B) would not prejudice any plaintiff.
       ``(2) Additional limitations on discovery.--In any private 
     action arising under this title--
       ``(A) prior to the filing of a responsive pleading to the 
     complaint, discovery shall be limited to materials directly 
     relevant to facts expressly pleaded in the complaint; and
       ``(B) except as provided in subparagraphs (A) and (B), or 
     otherwise expressly provided in this title, discovery shall 
     be conducted pursuant to the Federal Rules of Civil 
     Procedure.''.
       On page 111, strike lines 1 through 7, and insert the 
     following:
       ``(2) Stay of discovery.--
       ``(A) In general.--In any private action arising under this 
     title, the court may stay discovery upon motion of any party 
     only if the court determines that the stay of discovery--
       ``(i) would avoid waste, delay, duplication, or unnecessary 
     expense; and
       ``(ii) would not prejudice any plaintiff.
       ``(B) Additional limitations on discovery.--In any private 
     action arising under this title--
       ``(i) notwithstanding any stay of discovery issued in 
     accordance with subparagraph (A), the court may permit such 
     discovery as may be necessary to permit a plaintiff to 
     prepare an amended complaint in order to meet the pleading 
     requirements of this section;
       ``(ii) prior to the filing of a responsive pleading to the 
     complaint, discovery shall be limited to materials directly 
     relevant to facts expressly pleaded in the complaint; and
       ``(iii) except as provided in clauses (i) and (ii), or 
     otherwise expressly provided in this title, discovery shall 
     be conducted pursuant to the Federal Rules of Civil 
     Procedure.''.
                                                                    ____


                           Amendment No. 1485

       On page 110, strike lines 12 through 19, and insert the 
     following:
       ``(b) Required State of Mind.--
       ``(1) In general.--In any private action arising under this 
     title in which the plaintiff may recover money damages only 
     on proof that the defendant acted with a particular state of 
     mind, the complaint shall, with respect to each act or 
     omission alleged to violate this title, specifically allege 
     facts giving rise to a strong inference that the defendant 
     acted with the requested state of mind.
       ``(2) Strong inference of fraudulent intent.--For purposes 
     of paragraph (1), a strong inference that the defendant acted 
     with the required state of mind may be established either--
       ``(A) by alleging facts to show that the defendant had both 
     motive and opportunity to commit fraud; or
       ``(B) by alleging facts that constitute strong 
     circumstantial evidence of conscious misbehavior or 
     recklessness by the defendant.''.
                                 ______


               D'AMATO (AND SARBANES) AMENDMENT NO. 1486

  Mr. BENNETT (for Mr. D'Amato for himself and Mr. Sarbanes) proposed 
an amendment to the bill S. 240, supra; as follows:

       On page 84, line 11, strike ``, if'' and insert ``in 
     which''.
       On page 111, beginning on line 2, strike ``during the 
     pendency of any motion to dismiss,''.
       On page 111, line 4, insert ``during the pendency of any 
     motion to dismiss,'' after ``stayed''.
       On page 114, line 13, strike ``has been,''.
       On page 114, strike line 15 and insert the following: 
     ``made--
       ``(i) was convicted of any felony or misdemeanor''.
       On page 114, strike line 17 and insert the following: 
     ``15(b)(4)(B); or
       ``(ii) has been made the subject of a ju-''.
       On page 114, line 20, strike ``(i) prohibits'' and insert 
     the following:
       ``(I) prohibits''.
       On page 115, line 1, strike ``(ii) requires'' and insert 
     the following:
       ``(II) requires''.
       On page 115, line 4, strike ``(iii) determines'' and insert 
     the following:
       ``(III) determines''.
       On page 116, between lines 11 and 12, insert the following:
       ``(D) made in connection with an initial public offering;
       On page 116, line 12, strike ``(D)'' and insert ``(E)''.
       On page 116, line 17, strike ``(E)'' and insert ``(F)''.
       On page 118, line 13, before the period insert ``that are 
     not compensated through final adjudication or settlement of a 
     private action brought under this title arising from the same 
     violation''.
       On page 121, line 7, strike ``has been,''.
       On page 121, strike line 9, and insert the following: 
     ``made--
       ``(i) was convicted of any felony or misdemeanor''.
       On page 121, strike line 11 and insert the following: 
     ``15(b)(4)(B); or
       ``(ii) has been made the subject of a ju-''.
       On page 121, line 14, strike ``(i) prohibits'' and insert 
     the following:
       ``(I) prohibits''.
       On page 121, line 16, strike ``(ii) requires'' and insert 
     the following:
       ``(II) requires''.
       On page 121, line 19, strike ``(iii) determines'' and 
     insert the following:
       ``(III) determines''.
       On page 122, between lines 20 and 21, insert the following:
       ``(D) made in connection with an initial public offering;
       On page 122, line 21, strike ``(D)'' and insert ``(E)''.
       On page 123, line 1, strike ``(E)'' and insert ``(F)''.
       On page 124, line 21, insert before the period ``that are 
     not compensated through final adjudication or settlement of a 
     private action brought under this title arising from the same 
     violation''.
       On page 128, line 25, strike ``the liability of'' and 
     insert ``if''.
       On page 128, line 25, strike ``offers or sells'' and insert 
     ``offered or sold''.
       On page 129, line 1, strike ``shall be limited to damages 
     if that person''.
       On page 129, line 9, strike ``and such portion or all of 
     such amount'' and insert ``then such portion or amount, as 
     the case may be,''.
       On page 131, lines 19 and 20, strike ``that person's 
     degree'' and insert ``the percentage''.
       On page 131, line 20, insert ``of that person'' before the 
     comma.
     

                          ____________________