Alfonse D’Amato

Mr. D'AMATO

Mr. D'AMATO. I ask for the yeas and nays.

Mr. D'AMATO. Mr. President, we have agreed to ask the Securities and Exchange Commission to make this statement. We understand the vulnerability of seniors. We are prepared to accept the amendment without a rollcall vote.

Mr. D'AMATO. At 5:45.

Mr. D'AMATO. That would bring us to 5:45.

Mr. D'AMATO. I move to table.

Mr. D'AMATO. Mr. President, might I ask that the two votes that are scheduled after the Bryan vote be limited to 10 minutes each?

Mr. D'AMATO. I have no objection.

Mr. D'AMATO. If one is tangentially involved, let us say an accountant, and knowingly and intentionally participates in a fraud, is that person, regardless of their portion of liability, held jointly- and-severally liable?

Mr. D'AMATO. Let me ask that the time from this time on be divided equally; that both sides start off with the same time, and we commence our first vote at 5:45.

Mr. D'AMATO. How much time is remaining?

Mr. D'AMATO. I yield another 2 minutes to the Senator from Utah. Amendment No. 1469

Mr. D'AMATO. I ask for the yeas and nays.

Mr. D'AMATO. Mr. President, I commend my colleague from Michigan because he does have, and has had, a number of proposals that I believe would have strengthened the bill. He has agreed, in order to get legislation that would pass and begin to address some of the shortcomings in the present system, to withhold them--I deeply appreciate that--so we can make some progress. I fully anticipate in the future he will go forward with those legislative initiatives. Mr. President, I yield the floor.

Mr. D'AMATO. So that a person, would be considered as a minor participant, an aider and abettor, as a result of this amendment. We have made very clear, that if they knowingly and intentionally participate in fraud, that defendant can really be held as a primary culprit, so to speak; he or she would be libel for all the damages under the present situation; is that not true?

Mr. D'AMATO. Mr. President, I ask unanimous consent that Senator Abraham be recognized, and that the time he utilizes be charged against the time that we would be allocated in considering the Bryan amendment.

Mr. D'AMATO

Mr. D'AMATO. No, I will not. I have listened patiently.

Mr. D'AMATO. Section (B) is more interested in developing the qualities that one would look for as a lawyer, than the qualities of a good lead plaintiff. Now, let me say why I say that, and I mentioned it before: (B) after considering all relevant factors including but not limited to financial interest in the relief sought, the section I am concerned with starts with work done to develop and prosecute the case. Well, that the plaintiff is not doing. That plaintiff is not developing and prosecuting the case. ``The quality of the claim.'' The plaintiff has not brought this claim; a lawyer brings the claim on behalf of these plaintiffs, it is up to the lawyer to assess the quality of the claim. ``Prior experience''--listen to this--that is why I say I believe this is the lawyer's protection amendment. ``Prior experience representing classes.'' That does not seem to me to be looking out for the small investor. That seems to me to be selecting a lawyer. Why should a small investor interested in representing the defrauded class have prior experience representing classes, unless he is a professional plaintiff. That is why I ask, how did this amendment come about? I do see some good criteria in this amendment, possible conflicting interest. That is excellent. And, exposure to unique defenses. That is in the legislation. The same thing we have. Also for lead plaintiffs to serve as lead plaintiff of the appointed plaintiff class. I might more adequately suggest it should say pick the lawyer, because in the final analysis, it is the lead plaintiff, it is the plaintiff who is assigned, who picks the lawyer. That is what I am concerned about. I am concerned about this amendment perpetuating the same scheme. Do I want to protect the little guy? Absolutely. I have told my colleague that if there are ways--and we have cooperated in the past to do this--to give greater protection to those who are aggrieved, I want to do it. That is one of the reasons we have entered, at my colleagues' behest, the provisions giving the ability to those people who have $200,000 or less and who sustain up to 10 percent, the ability to recover their losses. We do not just shut the door on the little guy. My colleague mentioned a woman who lost $25,000 and had no recourse, this bill would provide to that person an opportunity to recover those funds. I yield the floor. Mrs. BOXER addressed the Chair.

Mr. D'AMATO. Mr. President, I do not intend to use much of my time. I think I have made my point. I think we both made our points. I believe as an unintended consequence--because I do believe my friend, the Senator from California, is interested in trying to protect small investors, particularly senior citizens --this amendment would not be a service to them. It would continue the race to the courthouse. I find particularly difficult to accept that part of the amendment on page 3 starting at line 13, ``work done to develop and prosecute the case, the quality of the claim, prior experience representing classes.'' That is absolutely the kind of language that suggests to me this amendment will continue the race to the courthouse. If my friends and colleagues find ways to deal with an admitted concern of the Securities and Exchange Commission, who, for the most part is strongly supportive of what we are attempting to do in this bill, but recognizes that there are problems in the system, I will be happy to work with them. I might call to the attention of my colleagues a letter from the SEC, and I believe my distinguished ranking member, Senator Sarbanes, has already called this letter to our attention: One provision of Section 102 requires the court generally to appoint as lead plaintiff the class member that has the largest financial interest in the case. While this approach has merit, it may create additional litigation concerning the qualifications of the lead plaintiff, particularly when the class member with the greatest financial interest in the litigation has ties to management or interests that may be different from other class members. I hope in the managers' amendment we might be able to address that concern with some language. That is a concern I think many of us have. It would be good to clarify that all possible conflicts under all cases must be avoided. We have to be careful because you do not want to unintentionally open the door to a different unintended consequence. Certainly I would have to strongly oppose my friend's legislation as it presently stands, because it would continue, as I see it, the race to the courthouse. Let me say this, if my colleague from California is prepared to yield her time, I will yield all of my time. I yield. Mrs. BOXER addressed the Chair.

Mr. D'AMATO. Fourteen.

Mr. D'AMATO. I want to salute and take my hat off to my friend from Maryland for putting that twist on. Certainly, it is a stretch to read this as a disqualification. All relevant factors including but not limited to financial interest, work done, prosecution of case, quality of the case, prior experience. I suggest no one could really interpret this literally and say to the judge, ``You should disqualify someone, if they have been in on two or three or four of these cases, from being considered as lead plaintiffs, or taking their vote or their determination, because they are professionals and have been doing it for years.'' I have to agree with my colleague, could the judge do it? Sure. But I have not seen a judge exercise that kind of right to interpretation. Of course we have not passed this bill. But that certainly is unique and novel as an interpretation. I have to tell my colleague, ``I could have some support for this amendment--and maybe we should put this provision in a managers' amendment--if it said we are going to look expressly at the qualifications to see that there are not professionals leading the class.'' Of course, how do you really tell? You get into how do you define who ``professional plaintiffs'' are? There may be some people we classify as gadflies who bring these suits, not because they have been prompted by somebody but because they want to do what is right, to bring the case, maybe they have been aggrieved, maybe they do not have a great financial stake, but they think others have been aggrieved. It is, I think, stretching--even beyond that limit to which most of us stretch, including this Senator at times--the credibility of this argument, to suggest you are really telling the court to look and see whether or not this person has been involved in multiple suits and therefore should be dropped. I find that difficult to interpret in that manner. But I do say ``It is novel. It shows great dexterity.'' And it shows, I believe, why we should not even get involved in this.

Mr. D'AMATO. Mr. President, I am very serious. If we cannot read this amendment to say financial interest and relief sought should be considered, what are we talking about? If work done to be developed and prosecute the case is considered--I mean you can obviously say, ``Well, was there a lot of work done, or was not their work done?'' But is that something obviously that should be taken into consideration? The quality of the claim--are we to say it is good quality? These are determinative factors that we will make. Are we using the English language or turning it upside down? Are we back to Alice in Wonderland now? I mean really, maybe the hour is late. But to suggest that by writing ``prior experience representing a class'', one would really say we are calling upon the judge to limit those people who serve often, if there have been those who have been representing a class over and over and in other suits, that would disqualify them. I think that is rather preposterous. If that is what the intent is, then we will need to spell it out. Maybe we should have spelled this out when we forth this legislation. But certainly, as I see it, it is difficult to believe that is the intent of this particular amendment.

Mr. D'AMATO. My friend and colleague, as I read it, these are conditions that the court will look at in making a determination. They are going to consider these factors. It says it quite clearly. We could argue about whether or not they should take them into consideration. Reasonable people can disagree.

Mr. D'AMATO. It is something that has to be considered. Obviously, it would seem to me that we should select someone who had a financial stake. That would be a factor, a positive factor. If something had been done in developing work, that would be a positive factor, and prior experience and exposure to unique defenses would be a positive factor. Why would you otherwise put these in the amendment? Then possible conflicts of interest, we read that as a negative factor, obviously. I think though that we go beyond. We have had a good debate on this. I am prepared to yield back the balance of my time, and we can take this up tomorrow morning. Mr. President, I yield the remainder of my time.

Mr. D'AMATO

Mr. D'AMATO. Mr. President, as in executive session, I ask unanimous consent that the injunction of secrecy be removed from the Investment Treaty with Mongolia (Treaty Document No. 104-10), transmitted to the Senate by the President on June 26, 1995; and the treaty considered as having been read the first time; referred, with accompanying papers, to the Committee on Foreign Relations and ordered to be printed; and ordered that the President's message be printed in the Record.

Mr. D'AMATO

Mr. D'AMATO. Mr. President, I ask unanimous consent that there now be a period for the transaction of routine morning business with Senators permitted to speak therein for up to 5 minutes each.