Paul Sarbanes

Mr. SARBANES

Mr. SARBANES. The Senator ought to yield to the author of the amendment.

Mr. SARBANES. I do not think the Senator from California ought to express reluctance or apologize for bringing these names out of the past in order to remind people what has occurred in this area and the tremendous damage and harm that was done to thousands of innocent investors. And we are running the risk here--I thought the Senator was absolutely right earlier when she said, we are, in effect, writing some history here, making a record so that down the road we can look back and say, it was at that point that a decision was made that led to these terrible consequences. One of the articles in U.S. News & World Report was headed ``Will Congress Condone Fraud?'' and then the article ends by saying: The pendulum had swung too far toward the lawyers, and now it is swinging too far the other way. Unfortunately, some major investor frauds may have to take place before it again moves back toward the center. And we are trying to prevent that here and now. We do not want those major investor frauds to take place, and it is our contention that many of the provisions that we are trying to change will make it possible for that to happen. That is why I think that the points the Senator from California is making are so extremely important. Things of these measures have consequences, and the consequences may be very harmful and detrimental. Her reference back to earlier abusers is very much on point in underscoring that fact.

Mr. SARBANES. Will the Senator yield on that point?

Mr. SARBANES

Mr. SARBANES. That was not my understanding.

Mr. SARBANES. As I understood the request, it was to move the vote to 5:30 and have half an hour equally divided. The vote is now scheduled for 5:15, is that correct?

Mr. SARBANES. Then when would the vote occur?

Mr. SARBANES. I am saying keep it at $200,000.

Mr. SARBANES. I am saying if you have a small investor, $200,000 worth of net worth--I am not trying to change the Senator's net worth-- it could be $300,000, could be $100,000--your net worth includes their home, includes everything they have----

Mr. SARBANES. That is right.

Mr. SARBANES. I have not tried to draw the line on the net worth issue at all. The Senator says if you want to put it at $250,000 or $300,000--I have not tried to change that line. I have not drawn that line at all. I have left the line at $200,000. That response does not go to the amendment in any respect.

Mr. SARBANES. Equally divided?

Mr. SARBANES. I will defer and let the Senator from Minnesota proceed before we use the time on this side. Mr. GRAMS addressed the Chair.

Mr. SARBANES. Mr. President, what is the time situation? The PRESIDING OFFICER (Mr. D'Amato). The Senator from Nevada has 14\1/2\ minutes; the Senator from Minnesota has 30 minutes 27 seconds.

Mr. SARBANES. And, in fact, I have a quote from SEC Chairman Breeden. This was in 1991. This is the Republican Chairman of the Securities and Exchange Commission, in which he said: The timeframe set forth in the Supreme Court's decision is unrealistically short and will do undue damage to the ability of private litigants to sue. He then went on to point out that in many cases: Events only come to light years after the original distribution of securities and the cases could well mean that by the time investors discover they have a case, they are already barred from the courthouse. Will the Senator yield me just 3 minutes?

Mr. SARBANES. Thank you.

Mr. SARBANES. If the Senator would yield, I was going to offer an amendment on which the time would be equally divided. I am happy to withhold offering the amendment until the Senator completes his general statement. But I did not want the general statement to go on without getting this straightened out because there might not be much time left for the amendment.

Mr. SARBANES. Mr. President, I ask unanimous consent that the time between 12:16 and 2 o'clock be treated as equally divided between the Senator from Utah and myself. When he completes his statement, I will put down the amendment. But the time he is using would come out of his side, and there will still be time left, unless he is going to go on for a very long time. I think that would equalize the situation in which we find ourselves.

Mr. SARBANES. I wonder if we can get the time situation straightened out. Could I ask the Chair what time did we go on the bill?

Mr. SARBANES. Will the Senator yield for a moment?

Mr. SARBANES. The Senator from Nevada and I have conceded that we want to do some things about frivolous suits. We are trying to get at the extraordinary lengths to which you have gone to immunize from liability and, therefore, throw the burden upon innocent investors. I think the Senator from Nevada put it very well the other day. He said this is a ``Trojan horse.'' It is waving the pennant of frivolous suits, but hidden within the Trojan horse are lots of other things as well. That is exactly the case. That is what we have been trying to, in effect, lay out in the course of this debate.

Mr. SARBANES. The final point is that, obviously, tomorrow we are going to do the so-called safe harbor. I call it pirate's cove because it is being carved out here for all the sharks and barracudas to find sort of a comfort and solace----

Mr. SARBANES. You do not have a sliding scale encompassing knowing standard. You have knocked it out, and all the aiders and abettors are dancing their way down the street.

Mr. SARBANES. Fine. I am prepared to concede to the Senator that, in certain jurisdictions, there were sliding scales and all the rest. But you have eliminated all of that.

Mr. SARBANES. If the Senator will yield, the general prevailing standard on reaching aiders and abettors was, in effect, thrown out in the Denver case.

Mr. SARBANES

Mr. SARBANES. If the Senator will yield, I think his thanks should really be directed to the distinguished Senator from California, who, under the unanimous consent request, was in order to offer her amendment and deferred from doing so in order to allow the Senator to proceed.