[Congressional Record Volume 141, Number 206 (Thursday, December 21, 1995)]
[Extensions of Remarks]
[Page E2437]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995--VETO MESSAGE FROM THE 
          PRESIDENT OF THE UNITED STATES (H. DOC. NO. 104-150)

                                 ______


                               speech of

                        HON. CHARLES E. SCHUMER

                              of new york

                    in the house of representatives

                      Wednesday, December 20, 1995

  Mr. SCHUMER. Mr. Speaker, I strongly support the override of the 
President's veto of H.R. 1058. I voted in favor of both the original 
House bill and the conference report, and I must respectfully differ 
with the President and urge my colleagues to vote in favor once again 
of this fair, well-balanced bill, which passed the House only 2 weeks 
ago by an overwhelming vote of 320 to 102.
  We need to put an end to frivolous securities suits that needlessly 
cost millions of dollars, impair capital formation and investment, and 
clog up our court system. Under the current system lawyers often bring 
lawsuits immediately after a drop in a company's stock price, without 
any further research into the real cause of the price decline. As a 
result the suits often have no substantive merit, but they have the 
effect of presenting the company with the unhappy choice between a 
costly, lengthy discovery process and an exorbitant, unjustified 
settlement. And what's worse, an inordinate share of the ultimate 
settlement often ends up in the pockets of the lawyers who brought the 
case, rather than in the bank accounts of the shareholders on whose 
behalf the lawyers ostensibly filed in the first place.
  This bill goes a long way toward correcting these abuses without 
curtailing the essential rights of shareholders to sue corporations and 
insiders when there is legitimate evidence of fraud and deception. It 
continues to protect those vital rights--as we must--while at the same 
time protecting companies from needless and costly distractions. In the 
end, shareholders will win twice because the value of their investments 
will grow, and the American economy will win because we'll have removed 
one more impediment to the kind of robust growth and investment we all 
agree are so critically needed. I urge my colleagues to support this 
bill.

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