[Congressional Record Volume 144, Number 99 (Wednesday, July 22, 1998)]
[Extensions of Remarks]
[Pages E1385-E1386]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          SECURITIES LITIGATION UNIFORM STANDARDS ACT OF 1998

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                               speech of

                          HON. JOHN A. BOEHNER

                                of ohio

                    in the house of representatives

                         Tuesday, July 21, 1998

  Mr. BOEHNER. Mr. Speaker, I want to congratulate Chairman Bliley, 
Chairman Oxley, my friend Mr. White and Ms. Eshoo for their work on 
this fine piece of legislation, the Securities Litigation Uniform 
Standards Act.
  Nearly 3 years ago we passed the precursor to this bill. Before that, 
dozens of sue-first, ask-questions-later lawyers had made fortunes by 
organizing groups of shareholders to sue companies when their stock 
didn't live up to

[[Page E1386]]

the shareholders' expectations. If the stock went down, even briefly, 
the trial lawyers sued the companies and harassed them into 
settlements. The real winners in these cases were the lawyers, who 
recovered fees that dwarfed the settlements their individual clients 
received.
  This especially hurt high-tech businesses which were easy targets 
because their stocks tended to fluctuate more than average. Because we 
wanted to keep America competitive in this vital market, in 1995 we 
passed the Securities Litigation Reform Act, overriding President 
Clinton's veto. That bill protected shareholders' legitimate interests 
but made it harder for the strike suit lawyers to coerce companies into 
unfair settlements.
  The problem was that in inventing a new mousetrap we had forgotten 
how smart the mouses were. The strike suit lawyers began filing their 
suits in state courts, where our bill had little effect.
  This bill realizes the intent of the 1995 bill by closing this 
loophole. Securities law is predominantly federal. This bill would 
prevent strike suit lawyers from abusing convenient state law by giving 
company defendants the opportunity to move strike suits filed in state 
courts to federal courts, where they would have the protection of the 
1995 bill.
  Mr. Speaker, this superb piece of legislation will protect 
shareholders, it will protect our growing high-tech sector from 
needless harassment, and it will protect the high-paying, stable jobs 
that these industries will create now and in the future. I urge my 
colleagues to support it.

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