[Congressional Record Volume 141, Number 207 (Friday, December 22, 1995)]
[Senate]
[Pages S19145-S19146]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      SECURITIES LITIGATION REFORM

  Mr. DASCHLE. I wish the President pro tempore a good morning.
  Mr. President, I would like to make a couple remarks, if I can, about 
the securities litigation reform legislation.
  The bill before us highlights the real problem that faces companies 
when frivolous lawsuits are filed against them by lawyers for a quick 
profit. Our goal should be to address this problem without undermining 
the ability of investors to protect themselves against real fraud. 
Regrettably, the bill reported from conference goes too far, 
effectively closing the courthouse door on investors with legitimate 
claims.
  While fixing the problem presented by frivolous lawsuits requires 
remedy, this bill goes beyond that and, as a result, leaves investors 
unprotected against fraud in many instances.
_______________________________________________________________________
                                 NOTICE

                    LOBBYING DISCLOSURE ACT OF 1995

 A special joint notice from the Secretary of the Senate and the Clerk 
 of the House concerning implementation of the Lobbying Disclosure Act 
  of 1995 (P.L. 104-65) appears in this issue of the Record following 
 both the proceedings of the Senate and the House. See pages S19290-91 
                             and H15634-35.
_______________________________________________________________________

[[Page S19146]]

  The well-targeted veto of the President can force this bill back on 
the right track. Proponents and opponents of this legislation recognize 
that our first priority must be to protect investors. Families, senior 
citizens, and working people need to feel secure when they invest. They 
need to be encouraged to save and invest for their health care, their 
retirement, and their education.
  But such investors will only have confidence in the market if they 
consider them to be fair. They must expect that they will be protected 
if they are defrauded. They need to know that the law will continue to 
protect small investors, pension funds, and taxpayers against another 
Charles Keating. Yet, under this bill, when the next Charles Keating 
appears, and one will, victims will recover almost none of their 
losses. The victims of the Keating fraud recovered over $260 million. 
Future victims will get a mere fraction of that. The lawyers who sued 
Keating say they would only have recovered $16 million under the new 
bill--$16 million--a fraction of the $260 million under the current law 
they have received.
  The President indicated in his veto message that he would be willing 
to sign this bill if improvements were made. By sustaining his veto, we 
can address real problems raised by frivolous lawsuits, while avoiding 
the overly broad language that is now in the bill.
  The President's veto message focuses on three problems with the 
conference report.
  First, the bill allows corporate insiders to make false statements, 
so long as they are accompanied by ``cautionary language.''
  Second, it raises the bar so high on pleading standards that victims 
of fraud cannot get into court.
  Finally, it forces victims to risk paying legal fees of wealthy 
defendants if they want their day in court.
  Each of these problems should be addressed before this bill becomes 
law. Because the President's concerns are drawn very narrowly, a new 
bill with revisions to address these shortcomings can be written and 
approved. We can craft a better approach that protects investors while 
ending frivolous lawsuits. That should be the goal of this legislative 
exercise.
  Mr. President, let me commend the distinguished Senator from Nevada, 
the Senator from Maryland, and others, who have laid out in a much more 
elaborate fashion over the last couple of days many of the same 
reservations that I just expressed this morning. We need to join them 
in sustaining the President's veto.
  I yield the floor. I suggest the absence of a quorum.
  Mr. President, I withhold that request.

                          ____________________