[Congressional Record Volume 148, Number 5 (Tuesday, January 29, 2002)]
[Extensions of Remarks]
[Pages E46-E47]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




      INTRODUCTION OF THE SECURITIES FRAUD PREVENTION ACT OF 2002

                                 ______
                                 

                         HON. JOHN CONYERS, JR.

                              of michigan

                    in the house of representatives

                       Tuesday, January 29, 2002

  Mr. CONYERS. Mr. Speaker, today I am introducing of the ``Securities 
Fraud Prevention Act of 2002,'' legislation designed to crack down on 
securities fraud. I am joined by Minority Leader Gephardt along with 
Representatives Watt, Jackson-Lee, Waters, Markey and Sanders.
  The last several months have revealed widespread securities fraud at 
the very highest level of Enron and its advisers. Every day brings a 
new revelation of the dissemination of misinformation, shredding, 
obstruction of justice, and insider trading. As more and more companies 
filer bankruptcy, I am concerned that we may well learn of additional 
instances of fraud across corporate America.
  One step we can take to respond to this outbreak is to empower harmed 
American investors to obtain justice in these cases. Unfortunately, one 
of the very first items enacted by the Majority in 1995 as part of the 
``Contract with American'' was legislation making it more difficult for 
ordinary Americans to bring Racketeer Influenced and Corrupt 
Organizations (RICO) actions involving securities fraud. This legal 
loophole for securities fraud was enacted over President Clinton's veto 
as part of the Private Securities Litigation Reform Act (PSLRA) of 
1995.
  The PSLRA ended the use of the private civil RICO statue as a means 
of seeking treble damages and attorneys fees in securities fraud cases, 
unless preceded by a criminal conviction. In essence, the Congress 
wrote a special exemption preventing securities fraud cases from being 
brought under RICO.
  In the wake of the Enron debacle, I believe the time is now ripe to 
protect American investors once again. The Enron cases has established 
beyond a shadow of a doubt that white collar fraud can be incredibly 
damaging, in many cases wiping away life savings and costing innocent 
Americans billions of dollars of their hard earned money. There can be 
no conceivable justification for shielding corporate wrongdoers from 
RICO actions in this context. I am hopeful that Congress can move 
quickly to enact this worthwhile and timely legislation.

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