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As we have stated to the committee before, we continue to believe that broad preemption legislation, such as S. 1260, is unwarranted based on the available evidence, harmful to defrauded investors, and unlikely to be effective. We strongly oppose its passage. We urge Congress to wait until there is adequate evidence on which to base a careful and unbiased assessment of any problems that have resulted from passage of PSLRA, including problems that limit recoveries by legitimate victims of fraud. Only then can Congress craft balanced legislation that provides appropriate national standards for securities class action lawsuits without placing unreasonable limits on the rights of defrauded investors.
Endnotes:
This view has also been expressed by the Securities and Exchange Commission in its Report to the President and the Congress on the First Year of Practice Under the Private Securities Litigation Reform Act of 1995, U.S. Securities and Exchange Commission, Office of the General Counsel, April 1997 and more recently in its October 29, 1997 testimony before this subcommittee. See also Testimony of Michael A. Perino, Stanford Law School, Before the Subcommittee on Finance and Hazardous Materials of the House Commerce Committee, October 21, 1997.
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