Concurrent Jurisdiction Found For Covered Class Actions

In 1997, I testified at an oversight hearing before the United States Senate Banking, Housing & Urban Affairs Committee regarding securities litigation abuses. At the time, Congress was considering whether to enact legislation to stop plaintiffs from filing securities class actions in state court in order to avoid stricter federal standards applicable to class action lawsuits. Both the Securities and Exchange Commission and the North American Securities Administrators Association (NASAA) were urging delay. In my testimony, however, I called on Congress to take prompt action:

I strongly disagree with the position of the United States Securities and Exchange Commission and Mark Griffen, the current president of the North American Securities Administrators Association, Inc., that it is too early to consider and make further changes with respect to the 1995 Act. While I acknowledge that it may be too early to count all of the effects of the 1995 Act, it is not too early to conclude that the securities of many issuers trade in what is quintessentially a national securities market. For these national issuers and their stockholders, the litigation standards should be consistent. Consistent standards is a matter of both common sense and fairness.

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