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[104th Congress Public Law 67]
[From the U.S. Government Printing Office]

<DOC>
[DOCID: f:publ67.104]

[[Page 109 STAT. 737]]

Public Law 104-67
104th Congress

                                 An Act

 
         To reform Federal securities litigation, and for other 
            purposes. <<NOTE: Dec. 22, 1995 -  [H.R. 1058]>> 

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled, <<NOTE: Private 
Securities Litigation Reform Act of 1995.>> 

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) <<NOTE: 15 USC 78a note.>> Short Title.--This Act may be cited 
as the ``Private Securities Litigation Reform Act of 1995''.

    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.

                TITLE I--REDUCTION OF ABUSIVE LITIGATION

Sec. 101. Private securities litigation reform.
Sec. 102. Safe harbor for forward-looking statements.
Sec. 103. Elimination of certain abusive practices.
Sec. 104. Authority of Commission to prosecute aiding and abetting.
Sec. 105. Loss causation.
Sec. 106. Study and report on protections for senior citizens and 
           qualified retirement plans.
Sec. 107. Amendment to Racketeer Influenced and Corrupt Organizations 
           Act.
Sec. 108. Applicability.

               TITLE II--REDUCTION OF COERCIVE SETTLEMENTS

Sec. 201. Proportionate liability.
Sec. 202. Applicability.
Sec. 203. Rule of construction.

            TITLE III--AUDITOR DISCLOSURE OF CORPORATE FRAUD

Sec. 301. Fraud detection and disclosure.

                TITLE I--REDUCTION OF ABUSIVE LITIGATION

SEC. 101. PRIVATE SECURITIES LITIGATION REFORM.

    (a) Securities Act of 1933.--Title I of the Securities Act of 1933 
(15 U.S.C. 77a et seq.) is amended by adding at the end the following 
new section:

``SEC. 27. <<NOTE: 15 USC 77z-1.>> PRIVATE SECURITIES LITIGATION.

    ``(a) Private Class Actions.--
            ``(1) In general.--The provisions of this subsection shall 
        apply to each private action arising under this title that is 
        brought as a plaintiff class action pursuant to the Federal 
        Rules of Civil Procedure.
            ``(2) Certification filed with complaint.--

[[Page 109 STAT. 738]]

                    ``(A) In general.--Each plaintiff seeking to serve 
                as a representative party on behalf of a class shall 
                provide a sworn certification, which shall be personally 
                signed by such plaintiff and filed with the complaint, 
                that--
                          ``(i) states that the plaintiff has reviewed 
                      the complaint and authorized its filing;
                          ``(ii) states that the plaintiff did not 
                      purchase the security that is the subject of the 
                      complaint at the direction of plaintiff's counsel 
                      or in order to participate in any private action 
                      arising under this title;
                          ``(iii) states that the plaintiff is willing 
                      to serve as a representative party on behalf of a 
                      class, including providing testimony at deposition 
                      and trial, if necessary;
                          ``(iv) sets forth all of the transactions of 
                      the plaintiff in the security that is the subject 
                      of the complaint during the class period specified 
                      in the complaint;
                          ``(v) identifies any other action under this 
                      title, filed during the 3-year period preceding 
                      the date on which the certification is signed by 
                      the plaintiff, in which the plaintiff has sought 
                      to serve, or served, as a representative party on 
                      behalf of a class; and
                          ``(vi) states that the plaintiff will not 
                      accept any payment for serving as a representative 
                      party on behalf of a class beyond the plaintiff's 
                      pro rata share of any recovery, except as ordered 
                      or approved by the court in accordance with 
                      paragraph (4).
                    ``(B) Nonwaiver of attorney-client privilege.--The 
                certification filed pursuant to subparagraph (A) shall 
                not be construed to be a waiver of the attorney-client 
                privilege.
            ``(3) Appointment of lead plaintiff.--
                    ``(A) Early notice to class members.-- 
                <<NOTE: Publication.>> 
                          ``(i) In general.--Not later than 20 days 
                      after the date on which the complaint is filed, 
                      the plaintiff or plaintiffs shall cause to be 
                      published, in a widely circulated national 
                      business-oriented publication or wire service, a 
                      notice advising members of the purported plaintiff 
                      class--
                                    ``(I) of the pendency of the action, 
                                the claims asserted therein, and the 
                                purported class period; and
                                    ``(II) that, not later than 60 days 
                                after the date on which the notice is 
                                published, any member of the purported 
                                class may move the court to serve as 
                                lead plaintiff of the purported class.
                          ``(ii) Multiple actions.--If more than one 
                      action on behalf of a class asserting 
                      substantially the same claim or claims arising 
                      under this title is filed, only the plaintiff or 
                      plaintiffs in the first filed action shall be 
                      required to cause notice to be published in 
                      accordance with clause (i).
                          ``(iii) Additional notices may be required 
                      under federal rules.--Notice required under clause 
                      (i) shall be in addition to any notice required 
                      pursuant to the Federal Rules of Civil Procedure.
                    ``(B) Appointment of lead plaintiff.--

[[Page 109 STAT. 739]]

                          ``(i) In general.--Not later than 90 days 
                      after the date on which a notice is published 
                      under subparagraph (A)(i), the court shall 
                      consider any motion made by a purported class 
                      member in response to the notice, including any 
                      motion by a class member who is not individually 
                      named as a plaintiff in the complaint or 
                      complaints, and shall appoint as lead plaintiff 
                      the member or members of the purported plaintiff 
                      class that the court determines to be most capable 
                      of adequately representing the interests of class 
                      members (hereafter in this paragraph referred to 
                      as the `most adequate plaintiff') in accordance 
                      with this subparagraph.
                          ``(ii) Consolidated actions.--If more than one 
                      action on behalf of a class asserting 
                      substantially the same claim or claims arising 
                      under this title has been filed, and any party has 
                      sought to consolidate those actions for pretrial 
                      purposes or for trial, the court shall not make 
                      the determination required by clause (i) until 
                      after the decision on the motion to consolidate is 
                      rendered. As soon as practicable after such 
                      decision is rendered, the court shall appoint the 
                      most adequate plaintiff as lead plaintiff for the 
                      consolidated actions in accordance with this 
                      subparagraph.
                          ``(iii) Rebuttable presumption.--
                                    ``(I) In general.--Subject to 
                                subclause (II), for purposes of clause 
                                (i), the court shall adopt a presumption 
                                that the most adequate plaintiff in any 
                                private action arising under this title 
                                is the person or group of persons that--
                                            ``(aa) has either filed the 
                                        complaint or made a motion in 
                                        response to a notice under 
                                        subparagraph (A)(i);
                                            ``(bb) in the determination 
                                        of the court, has the largest 
                                        financial interest in the relief 
                                        sought by the class; and
                                            ``(cc) otherwise satisfies 
                                        the requirements of Rule 23 of 
                                        the Federal Rules of Civil 
                                        Procedure.
                                    ``(II) Rebuttal evidence.--The 
                                presumption described in subclause (I) 
                                may be rebutted only upon proof by a 
                                member of the purported plaintiff class 
                                that the presumptively most adequate 
                                plaintiff--
                                            ``(aa) will not fairly and 
                                        adequately protect the interests 
                                        of the class; or
                                            ``(bb) is subject to unique 
                                        defenses that render such 
                                        plaintiff incapable of 
                                        adequately representing the 
                                        class.
                          ``(iv) Discovery.--For purposes of this 
                      subparagraph, discovery relating to whether a 
                      member or members of the purported plaintiff class 
                      is the most adequate plaintiff may be conducted by 
                      a plaintiff only if the plaintiff first 
                      demonstrates a reasonable basis for a finding that 
                      the presumptively most adequate plaintiff is 
                      incapable of adequately representing the class.

[[Page 109 STAT. 740]]

                          ``(v) Selection of lead counsel.--The most 
                      adequate plaintiff shall, subject to the approval 
                      of the court, select and retain counsel to 
                      represent the class.
                          ``(vi) Restrictions on professional 
                      plaintiffs.--Except as the court may otherwise 
                      permit, consistent with the purposes of this 
                      section, a person may be a lead plaintiff, or an 
                      officer, director, or fiduciary of a lead 
                      plaintiff, in no more than 5 securities class 
                      actions brought as plaintiff class actions 
                      pursuant to the Federal Rules of Civil Procedure 
                      during any 3-year period.
            ``(4) Recovery by plaintiffs.--The share of any final 
        judgment or of any settlement that is awarded to a 
        representative party serving on behalf of a class shall be 
        equal, on a per share basis, to the portion of the final 
        judgment or settlement awarded to all other members of the 
        class. Nothing in this paragraph shall be construed to limit the 
        award of reasonable costs and expenses (including lost wages) 
        directly relating to the representation of the class to any 
        representative party serving on behalf of the class.
            ``(5) Restrictions on settlements under seal.--The terms and 
        provisions of any settlement agreement of a class action shall 
        not be filed under seal, except that on motion of any party to 
        the settlement, the court may order filing under seal for those 
        portions of a settlement agreement as to which good cause is 
        shown for such filing under seal. For purposes of this 
        paragraph, good cause shall exist only if publication of a term 
        or provision of a settlement agreement would cause direct and 
        substantial harm to any party.
            ``(6) Restrictions on payment of attorneys' fees and 
        expenses.--Total attorneys' fees and expenses awarded by the 
        court to counsel for the plaintiff class shall not exceed a 
        reasonable percentage of the amount of any damages and 
        prejudgment interest actually paid to the class.
            ``(7) Disclosure of settlement terms to class members.--Any 
        proposed or final settlement agreement that is published or 
        otherwise disseminated to the class shall include each of the 
        following statements, along with a cover page summarizing the 
        information contained in such statements:
                    ``(A) Statement of plaintiff recovery.--The amount 
                of the settlement proposed to be distributed to the 
                parties to the action, determined in the aggregate and 
                on an average per share basis.
                    ``(B) Statement of potential outcome of case.--
                          ``(i) Agreement on amount of damages.--If the 
                      settling parties agree on the average amount of 
                      damages per share that would be recoverable if the 
                      plaintiff prevailed on each claim alleged under 
                      this title, a statement concerning the average 
                      amount of such potential damages per share.
                          ``(ii) Disagreement on amount of damages.--If 
                      the parties do not agree on the average amount of 
                      damages per share that would be recoverable if the 
                      plaintiff prevailed on each claim alleged under 
                      this title, a statement from each settling party 
                      concerning the issue or issues on which the 
                      parties disagree.

[[Page 109 STAT. 741]]

                          ``(iii) Inadmissibility for certain 
                      purposes.--A statement made in accordance with 
                      clause (i) or (ii) concerning the amount of 
                      damages shall not be admissible in any Federal or 
                      State judicial action or administrative 
                      proceeding, other than an action or proceeding 
                      arising out of such statement.
                    ``(C) Statement of attorneys' fees or costs 
                sought.--If any of the settling parties or their counsel 
                intend to apply to the court for an award of attorneys' 
                fees or costs from any fund established as part of the 
                settlement, a statement indicating which parties or 
                counsel intend to make such an application, the amount 
                of fees and costs that will be sought (including the 
                amount of such fees and costs determined on an average 
                per share basis), and a brief explanation supporting the 
                fees and costs sought.
                    ``(D) Identification of lawyers' representatives.--
                The name, telephone number, and address of one or more 
                representatives of counsel for the plaintiff class who 
                will be reasonably available to answer questions from 
                class members concerning any matter contained in any 
                notice of settlement published or otherwise disseminated 
                to the class.
                    ``(E) Reasons for settlement.--A brief statement 
                explaining the reasons why the parties are proposing the 
                settlement.
                    ``(F) Other information.--Such other information as 
                may be required by the court.
            ``(8) Attorney conflict of interest.--If a plaintiff class 
        is represented by an attorney who directly owns or otherwise has 
        a beneficial interest in the securities that are the subject of 
        the litigation, the court shall make a determination of whether 
        such ownership or other interest constitutes a conflict of 
        interest sufficient to disqualify the attorney from representing 
        the plaintiff class.

    ``(b) Stay of Discovery; Preservation of Evidence.--
            ``(1) In general.--In any private action arising under this 
        title, all discovery and other proceedings shall be stayed 
        during the pendency of any motion to dismiss, unless the court 
        finds, upon the motion of any party, that particularized 
        discovery is necessary to preserve evidence or to prevent undue 
        prejudice to that party.
            ``(2) Preservation of evidence.--During the pendency of any 
        stay of discovery pursuant to this subsection, unless otherwise 
        ordered by the court, any party to the action with actual notice 
        of the allegations contained in the complaint shall treat all 
        documents, data compilations (including electronically recorded 
        or stored data), and tangible objects that are in the custody or 
        control of such person and that are relevant to the allegations, 
        as if they were the subject of a continuing request for 
        production of documents from an opposing party under the Federal 
        Rules of Civil Procedure.
            ``(3) Sanction for willful violation.--A party aggrieved by 
        the willful failure of an opposing party to comply with 
        paragraph (2) may apply to the court for an order awarding 
        appropriate sanctions.

    ``(c) Sanctions for Abusive Litigation.--

[[Page 109 STAT. 742]]

            ``(1) Mandatory review by court. <<NOTE: Records.>> --In any 
        private action arising under this title, upon final adjudication 
        of the action, the court shall include in the record specific 
        findings regarding compliance by each party and each attorney 
        representing any party with each requirement of Rule 11(b) of 
        the Federal Rules of Civil Procedure as to any complaint, 
        responsive pleading, or dispositive motion.
            ``(2) Mandatory sanctions.--If the court makes a finding 
        under paragraph (1) that a party or attorney violated any 
        requirement of Rule 11(b) of the Federal Rules of Civil 
        Procedure as to any complaint, responsive pleading, or 
        dispositive motion, the court shall impose sanctions on such 
        party or attorney in accordance with Rule 11 of the Federal 
        Rules of Civil Procedure. Prior to making a finding that any 
        party or attorney has violated Rule 11 of the Federal Rules of 
        Civil Procedure, the court shall give such party or attorney 
        notice and an opportunity to respond.
            ``(3) Presumption in favor of attorneys' fees and costs.--
                    ``(A) In general.--Subject to subparagraphs (B) and 
                (C), for purposes of paragraph (2), the court shall 
                adopt a presumption that the appropriate sanction--
                          ``(i) for failure of any responsive pleading 
                      or dispositive motion to comply with any 
                      requirement of Rule 11(b) of the Federal Rules of 
                      Civil Procedure is an award to the opposing party 
                      of the reasonable attorneys' fees and other 
                      expenses incurred as a direct result of the 
                      violation; and
                          ``(ii) for substantial failure of any 
                      complaint to comply with any requirement of Rule 
                      11(b) of the Federal Rules of Civil Procedure is 
                      an award to the opposing party of the reasonable 
                      attorneys' fees and other expenses incurred in the 
                      action.
                    ``(B) Rebuttal evidence.--The presumption described 
                in subparagraph (A) may be rebutted only upon proof by 
                the party or attorney against whom sanctions are to be 
                imposed that--
                          ``(i) the award of attorneys' fees and other 
                      expenses will impose an unreasonable burden on 
                      that party or attorney and would be unjust, and 
                      the failure to make such an award would not impose 
                      a greater burden on the party in whose favor 
                      sanctions are to be imposed; or
                          ``(ii) the violation of Rule 11(b) of the 
                      Federal Rules of Civil Procedure was de minimis.
                    ``(C) Sanctions.--If the party or attorney against 
                whom sanctions are to be imposed meets its burden under 
                subparagraph (B), the court shall award the sanctions 
                that the court deems appropriate pursuant to Rule 11 of 
                the Federal Rules of Civil Procedure.

    ``(d) Defendant's Right to Written Interrogatories.--In any private 
action arising under this title in which the plaintiff may recover money 
damages only on proof that a defendant acted with a particular state of 
mind, the court shall, when requested by a defendant, submit to the jury 
a written interrogatory on the issue of each such defendant's state of 
mind at the time the alleged violation occurred.''.

[[Page 109 STAT. 743]]

    (b) Securities Exchange Act of 1934.--Title I of the Securities 
Exchange Act of 1934 (78a et seq.) is amended by inserting after section 
21C the following new section:

``SEC. 21D. <<NOTE: 15 USC 78u-4.>> PRIVATE SECURITIES LITIGATION.

    ``(a) Private Class Actions.--
            ``(1) In general.--The provisions of this subsection shall 
        apply in each private action arising under this title that is 
        brought as a plaintiff class action pursuant to the Federal 
        Rules of Civil Procedure.
            ``(2) Certification filed with complaint.--
                    ``(A) In general.--Each plaintiff seeking to serve 
                as a representative party on behalf of a class shall 
                provide a sworn certification, which shall be personally 
                signed by such plaintiff and filed with the complaint, 
                that--
                          ``(i) states that the plaintiff has reviewed 
                      the complaint and authorized its filing;
                          ``(ii) states that the plaintiff did not 
                      purchase the security that is the subject of the 
                      complaint at the direction of plaintiff's counsel 
                      or in order to participate in any private action 
                      arising under this title;
                          ``(iii) states that the plaintiff is willing 
                      to serve as a representative party on behalf of a 
                      class, including providing testimony at deposition 
                      and trial, if necessary;
                          ``(iv) sets forth all of the transactions of 
                      the plaintiff in the security that is the subject 
                      of the complaint during the class period specified 
                      in the complaint;
                          ``(v) identifies any other action under this 
                      title, filed during the 3-year period preceding 
                      the date on which the certification is signed by 
                      the plaintiff, in which the plaintiff has sought 
                      to serve as a representative party on behalf of a 
                      class; and
                          ``(vi) states that the plaintiff will not 
                      accept any payment for serving as a representative 
                      party on behalf of a class beyond the plaintiff's 
                      pro rata share of any recovery, except as ordered 
                      or approved by the court in accordance with 
                      paragraph (4).
                    ``(B) Nonwaiver of attorney-client privilege.--The 
                certification filed pursuant to subparagraph (A) shall 
                not be construed to be a waiver of the attorney-client 
                privilege.
            ``(3) Appointment of lead plaintiff.--
                    ``(A) Early notice to class members.-- 
                <<NOTE: Publication.>> 
                          ``(i) In general.--Not later than 20 days 
                      after the date on which the complaint is filed, 
                      the plaintiff or plaintiffs shall cause to be 
                      published, in a widely circulated national 
                      business-oriented publication or wire service, a 
                      notice advising members of the purported plaintiff 
                      class--
                                    ``(I) of the pendency of the action, 
                                the claims asserted therein, and the 
                                purported class period; and
                                    ``(II) that, not later than 60 days 
                                after the date on which the notice is 
                                published, any member of the purported 
                                class may move the court to serve as 
                                lead plaintiff of the purported class.

[[Page 109 STAT. 744]]

                          ``(ii) Multiple actions.--If more than one 
                      action on behalf of a class asserting 
                      substantially the same claim or claims arising 
                      under this title is filed, only the plaintiff or 
                      plaintiffs in the first filed action shall be 
                      required to cause notice to be published in 
                      accordance with clause (i).
                          ``(iii) Additional notices may be required 
                      under federal rules.--Notice required under clause 
                      (i) shall be in addition to any notice required 
                      pursuant to the Federal Rules of Civil Procedure.
                    ``(B) Appointment of lead plaintiff.--
                          ``(i) In general.--Not later than 90 days 
                      after the date on which a notice is published 
                      under subparagraph (A)(i), the court shall 
                      consider any motion made by a purported class 
                      member in response to the notice, including any 
                      motion by a class member who is not individually 
                      named as a plaintiff in the complaint or 
                      complaints, and shall appoint as lead plaintiff 
                      the member or members of the purported plaintiff 
                      class that the court determines to be most capable 
                      of adequately representing the interests of class 
                      members (hereafter in this paragraph referred to 
                      as the `most adequate plaintiff') in accordance 
                      with this subparagraph.
                          ``(ii) Consolidated actions.--If more than one 
                      action on behalf of a class asserting 
                      substantially the same claim or claims arising 
                      under this title has been filed, and any party has 
                      sought to consolidate those actions for pretrial 
                      purposes or for trial, the court shall not make 
                      the determination required by clause (i) until 
                      after the decision on the motion to consolidate is 
                      rendered. As soon as practicable after such 
                      decision is rendered, the court shall appoint the 
                      most adequate plaintiff as lead plaintiff for the 
                      consolidated actions in accordance with this 
                      paragraph.
                          ``(iii) Rebuttable presumption.--
                                    ``(I) In general.--Subject to 
                                subclause (II), for purposes of clause 
                                (i), the court shall adopt a presumption 
                                that the most adequate plaintiff in any 
                                private action arising under this title 
                                is the person or group of persons that--
                                            ``(aa) has either filed the 
                                        complaint or made a motion in 
                                        response to a notice under 
                                        subparagraph (A)(i);
                                            ``(bb) in the determination 
                                        of the court, has the largest 
                                        financial interest in the relief 
                                        sought by the class; and
                                            ``(cc) otherwise satisfies 
                                        the requirements of Rule 23 of 
                                        the Federal Rules of Civil 
                                        Procedure.
                                    ``(II) Rebuttal evidence.--The 
                                presumption described in subclause (I) 
                                may be rebutted only upon proof by a 
                                member of the purported plaintiff class 
                                that the presumptively most adequate 
                                plaintiff--
                                            ``(aa) will not fairly and 
                                        adequately protect the interests 
                                        of the class; or

[[Page 109 STAT. 745]]

                                            ``(bb) is subject to unique 
                                        defenses that render such 
                                        plaintiff incapable of 
                                        adequately representing the 
                                        class.
                          ``(iv) Discovery.--For purposes of this 
                      subparagraph, discovery relating to whether a 
                      member or members of the purported plaintiff class 
                      is the most adequate plaintiff may be conducted by 
                      a plaintiff only if the plaintiff first 
                      demonstrates a reasonable basis for a finding that 
                      the presumptively most adequate plaintiff is 
                      incapable of adequately representing the class.
                          ``(v) Selection of lead counsel.--The most 
                      adequate plaintiff shall, subject to the approval 
                      of the court, select and retain counsel to 
                      represent the class.
                          ``(vi) Restrictions on professional 
                      plaintiffs.--Except as the court may otherwise 
                      permit, consistent with the purposes of this 
                      section, a person may be a lead plaintiff, or an 
                      officer, director, or fiduciary of a lead 
                      plaintiff, in no more than 5 securities class 
                      actions brought as plaintiff class actions 
                      pursuant to the Federal Rules of Civil Procedure 
                      during any 3-year period.
            ``(4) Recovery by plaintiffs.--The share of any final 
        judgment or of any settlement that is awarded to a 
        representative party serving on behalf of a class shall be 
        equal, on a per share basis, to the portion of the final 
        judgment or settlement awarded to all other members of the 
        class. Nothing in this paragraph shall be construed to limit the 
        award of reasonable costs and expenses (including lost wages) 
        directly relating to the representation of the class to any 
        representative party serving on behalf of a class.
            ``(5) Restrictions on settlements under seal.--The terms and 
        provisions of any settlement agreement of a class action shall 
        not be filed under seal, except that on motion of any party to 
        the settlement, the court may order filing under seal for those 
        portions of a settlement agreement as to which good cause is 
        shown for such filing under seal. For purposes of this 
        paragraph, good cause shall exist only if publication of a term 
        or provision of a settlement agreement would cause direct and 
        substantial harm to any party.
            ``(6) Restrictions on payment of attorneys' fees and 
        expenses.--Total attorneys' fees and expenses awarded by the 
        court to counsel for the plaintiff class shall not exceed a 
        reasonable percentage of the amount of any damages and 
        prejudgment interest actually paid to the class.
            ``(7) Disclosure of settlement terms to class members.--Any 
        proposed or final settlement agreement that is published or 
        otherwise disseminated to the class shall include each of the 
        following statements, along with a cover page summarizing the 
        information contained in such statements:
                    ``(A) Statement of plaintiff recovery.--The amount 
                of the settlement proposed to be distributed to the 
                parties to the action, determined in the aggregate and 
                on an average per share basis.
                    ``(B) Statement of potential outcome of case.--
                          ``(i) Agreement on amount of damages.--If the 
                      settling parties agree on the average amount of 
                      dam

[[Page 109 STAT. 746]]

                      ages per share that would be recoverable if the 
                      plaintiff prevailed on each claim alleged under 
                      this title, a statement concerning the average 
                      amount of such potential damages per share.
                          ``(ii) Disagreement on amount of damages.--If 
                      the parties do not agree on the average amount of 
                      damages per share that would be recoverable if the 
                      plaintiff prevailed on each claim alleged under 
                      this title, a statement from each settling party 
                      concerning the issue or issues on which the 
                      parties disagree.
                          ``(iii) Inadmissibility for certain 
                      purposes.--A statement made in accordance with 
                      clause (i) or (ii) concerning the amount of 
                      damages shall not be admissible in any Federal or 
                      State judicial action or administrative 
                      proceeding, other than an action or proceeding 
                      arising out of such statement.
                    ``(C) Statement of attorneys' fees or costs 
                sought.--If any of the settling parties or their counsel 
                intend to apply to the court for an award of attorneys' 
                fees or costs from any fund established as part of the 
                settlement, a statement indicating which parties or 
                counsel intend to make such an application, the amount 
                of fees and costs that will be sought (including the 
                amount of such fees and costs determined on an average 
                per share basis), and a brief explanation supporting the 
                fees and costs sought. Such information shall be clearly 
                summarized on the cover page of any notice to a party of 
                any proposed or final settlement agreement.
                    ``(D) Identification of lawyers' representatives.--
                The name, telephone number, and address of one or more 
                representatives of counsel for the plaintiff class who 
                will be reasonably available to answer questions from 
                class members concerning any matter contained in any 
                notice of settlement published or otherwise disseminated 
                to the class.
                    ``(E) Reasons for settlement.--A brief statement 
                explaining the reasons why the parties are proposing the 
                settlement.
                    ``(F) Other information.--Such other information as 
                may be required by the court.
            ``(8) Security for payment of costs in class actions.--In 
        any private action arising under this title that is certified as 
        a class action pursuant to the Federal Rules of Civil Procedure, 
        the court may require an undertaking from the attorneys for the 
        plaintiff class, the plaintiff class, or both, or from the 
        attorneys for the defendant, the defendant, or both, in such 
        proportions and at such times as the court determines are just 
        and equitable, for the payment of fees and expenses that may be 
        awarded under this subsection.
            ``(9) Attorney conflict of interest.--If a plaintiff class 
        is represented by an attorney who directly owns or otherwise has 
        a beneficial interest in the securities that are the subject of 
        the litigation, the court shall make a determination of whether 
        such ownership or other interest constitutes a conflict of 
        interest sufficient to disqualify the attorney from representing 
        the plaintiff class.

    ``(b) Requirements for Securities Fraud Actions.--

[[Page 109 STAT. 747]]

            ``(1) Misleading statements and omissions.--In any private 
        action arising under this title in which the plaintiff alleges 
        that the defendant--
                    ``(A) made an untrue statement of a material fact; 
                or
                    ``(B) omitted to state a material fact necessary in 
                order to make the statements made, in the light of the 
                circumstances in which they were made, not misleading;

        the complaint shall specify each statement alleged to have been 
        misleading, the reason or reasons why the statement is 
        misleading, and, if an allegation regarding the statement or 
        omission is made on information and belief, the complaint shall 
        state with particularity all facts on which that belief is 
        formed.
            ``(2) Required state of mind.--In any private action arising 
        under this title in which the plaintiff may recover money 
        damages only on proof that the defendant acted with a particular 
        state of mind, the complaint shall, with respect to each act or 
        omission alleged to violate this title, state with particularity 
        facts giving rise to a strong inference that the defendant acted 
        with the required state of mind.
            ``(3) Motion to dismiss; stay of discovery.--
                    ``(A) Dismissal for failure to meet pleading 
                requirements.--In any private action arising under this 
                title, the court shall, on the motion of any defendant, 
                dismiss the complaint if the requirements of paragraphs 
                (1) and (2) are not met.
                    ``(B) Stay of discovery.--In any private action 
                arising under this title, all discovery and other 
                proceedings shall be stayed during the pendency of any 
                motion to dismiss, unless the court finds upon the 
                motion of any party that particularized discovery is 
                necessary to preserve evidence or to prevent undue 
                prejudice to that party.
                    ``(C) Preservation of evidence.--
                          ``(i) In general.--During the pendency of any 
                      stay of discovery pursuant to this paragraph, 
                      unless otherwise ordered by the court, any party 
                      to the action with actual notice of the 
                      allegations contained in the complaint shall treat 
                      all documents, data compilations (including 
                      electronically recorded or stored data), and 
                      tangible objects that are in the custody or 
                      control of such person and that are relevant to 
                      the allegations, as if they were the subject of a 
                      continuing request for production of documents 
                      from an opposing party under the Federal Rules of 
                      Civil Procedure.
                          ``(ii) Sanction for willful violation.--A 
                      party aggrieved by the willful failure of an 
                      opposing party to comply with clause (i) may apply 
                      to the court for an order awarding appropriate 
                      sanctions.
            ``(4) Loss causation.--In any private action arising under 
        this title, the plaintiff shall have the burden of proving that 
        the act or omission of the defendant alleged to violate this 
        title caused the loss for which the plaintiff seeks to recover 
        damages.

    ``(c) Sanctions for Abusive Litigation.--
            ``(1) Mandatory review by court. <<NOTE: Records.>> --In any 
        private action arising under this title, upon final adjudication 
        of the action,

[[Page 109 STAT. 748]]

        the court shall include in the record specific findings 
        regarding compliance by each party and each attorney 
        representing any party with each requirement of Rule 11(b) of 
        the Federal Rules of Civil Procedure as to any complaint, 
        responsive pleading, or dispositive motion.
            ``(2) Mandatory sanctions.--If the court makes a finding 
        under paragraph (1) that a party or attorney violated any 
        requirement of Rule 11(b) of the Federal Rules of Civil 
        Procedure as to any complaint, responsive pleading, or 
        dispositive motion, the court shall impose sanctions on such 
        party or attorney in accordance with Rule 11 of the Federal 
        Rules of Civil Procedure. Prior to making a finding that any 
        party or attorney has violated Rule 11 of the Federal Rules of 
        Civil Procedure, the court shall give such party or attorney 
        notice and an opportunity to respond.
            ``(3) Presumption in favor of attorneys' fees and costs.--
                    ``(A) In general.--Subject to subparagraphs (B) and 
                (C), for purposes of paragraph (2), the court shall 
                adopt a presumption that the appropriate sanction--
                          ``(i) for failure of any responsive pleading 
                      or dispositive motion to comply with any 
                      requirement of Rule 11(b) of the Federal Rules of 
                      Civil Procedure is an award to the opposing party 
                      of the reasonable attorneys' fees and other 
                      expenses incurred as a direct result of the 
                      violation; and
                          ``(ii) for substantial failure of any 
                      complaint to comply with any requirement of Rule 
                      11(b) of the Federal Rules of Civil Procedure is 
                      an award to the opposing party of the reasonable 
                      attorneys' fees and other expenses incurred in the 
                      action.
                    ``(B) Rebuttal evidence.--The presumption described 
                in subparagraph (A) may be rebutted only upon proof by 
                the party or attorney against whom sanctions are to be 
                imposed that--
                          ``(i) the award of attorneys' fees and other 
                      expenses will impose an unreasonable burden on 
                      that party or attorney and would be unjust, and 
                      the failure to make such an award would not impose 
                      a greater burden on the party in whose favor 
                      sanctions are to be imposed; or
                          ``(ii) the violation of Rule 11(b) of the 
                      Federal Rules of Civil Procedure was de minimis.
                    ``(C) Sanctions.--If the party or attorney against 
                whom sanctions are to be imposed meets its burden under 
                subparagraph (B), the court shall award the sanctions 
                that the court deems appropriate pursuant to Rule 11 of 
                the Federal Rules of Civil Procedure.

    ``(d) Defendant's Right to Written Interrogatories.--In any private 
action arising under this title in which the plaintiff may recover money 
damages, the court shall, when requested by a defendant, submit to the 
jury a written interrogatory on the issue of each such defendant's state 
of mind at the time the alleged violation occurred.
    ``(e) Limitation on Damages.--
            ``(1) In general.--Except as provided in paragraph (2), in 
        any private action arising under this title in which the

[[Page 109 STAT. 749]]

        plaintiff seeks to establish damages by reference to the market 
        price of a security, the award of damages to the plaintiff shall 
        not exceed the difference between the purchase or sale price 
        paid or received, as appropriate, by the plaintiff for the 
        subject security and the mean trading price of that security 
        during the 90-day period beginning on the date on which the 
        information correcting the misstatement or omission that is the 
        basis for the action is disseminated to the market.
            ``(2) Exception.--In any private action arising under this 
        title in which the plaintiff seeks to establish damages by 
        reference to the market price of a security, if the plaintiff 
        sells or repurchases the subject security prior to the 
        expiration of the 90-day period described in paragraph (1), the 
        plaintiff's damages shall not exceed the difference between the 
        purchase or sale price paid or received, as appropriate, by the 
        plaintiff for the security and the mean trading price of the 
        security during the period beginning immediately after 
        dissemination of information correcting the misstatement or 
        omission and ending on the date on which the plaintiff sells or 
        repurchases the security.
            ``(3) Definition.--For purposes of this subsection, the 
        `mean trading price' of a security shall be an average of the 
        daily trading price of that security, determined as of the close 
        of the market each day during the 90-day period referred to in 
        paragraph (1).''.

SEC. 102. SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS.

    (a) Amendment to the Securities Act of 1933.--Title I of the 
Securities Act of 1933 (15 U.S.C. 77a et seq.) is amended by inserting 
after section 27 (as added by this Act) the following new section:

``SEC. 27A. <<NOTE: 15 USC 77z-2.>> APPLICATION OF SAFE HARBOR FOR 
            FORWARD-LOOKING STATEMENTS.

    ``(a) Applicability.--This section shall apply only to a forward-
looking statement made by--
            ``(1) an issuer that, at the time that the statement is 
        made, is subject to the reporting requirements of section 13(a) 
        or section 15(d) of the Securities Exchange Act of 1934;
            ``(2) a person acting on behalf of such issuer;
            ``(3) an outside reviewer retained by such issuer making a 
        statement on behalf of such issuer; or
            ``(4) an underwriter, with respect to information provided 
        by such issuer or information derived from information provided 
        by the issuer.

    ``(b) Exclusions.--Except to the extent otherwise specifically 
provided by rule, regulation, or order of the Commission, this section 
shall not apply to a forward-looking statement--
            ``(1) that is made with respect to the business or 
        operations of the issuer, if the issuer--
                    ``(A) during the 3-year period preceding the date on 
                which the statement was first made--
                          ``(i) was convicted of any felony or 
                      misdemeanor described in clauses (i) through (iv) 
                      of section 15(b)(4)(B) of the Securities Exchange 
                      Act of 1934; or

[[Page 109 STAT. 750]]

                          ``(ii) has been made the subject of a judicial 
                      or administrative decree or order arising out of a 
                      governmental action that--
                                    ``(I) prohibits future violations of 
                                the antifraud provisions of the 
                                securities laws;
                                    ``(II) requires that the issuer 
                                cease and desist from violating the 
                                antifraud provisions of the securities 
                                laws; or
                                    ``(III) determines that the issuer 
                                violated the antifraud provisions of the 
                                securities laws;
                    ``(B) makes the forward-looking statement in 
                connection with an offering of securities by a blank 
                check company;
                    ``(C) issues penny stock;
                    ``(D) makes the forward-looking statement in 
                connection with a rollup transaction; or
                    ``(E) makes the forward-looking statement in 
                connection with a going private transaction; or
            ``(2) that is--
                    ``(A) included in a financial statement prepared in 
                accordance with generally accepted accounting 
                principles;
                    ``(B) contained in a registration statement of, or 
                otherwise issued by, an investment company;
                    ``(C) made in connection with a tender offer;
                    ``(D) made in connection with an initial public 
                offering;
                    ``(E) made in connection with an offering by, or 
                relating to the operations of, a partnership, limited 
                liability company, or a direct participation investment 
                program; or
                    ``(F) made in a disclosure of beneficial ownership 
                in a report required to be filed with the Commission 
                pursuant to section 13(d) of the Securities Exchange Act 
                of 1934.

    ``(c) Safe Harbor.--
            ``(1) In general.--Except as provided in subsection (b), in 
        any private action arising under this title that is based on an 
        untrue statement of a material fact or omission of a material 
        fact necessary to make the statement not misleading, a person 
        referred to in subsection (a) shall not be liable with respect 
        to any forward-looking statement, whether written or oral, if 
        and to the extent that--
                    ``(A) the forward-looking statement is--
                          ``(i) identified as a forward-looking 
                      statement, and is accompanied by meaningful 
                      cautionary statements identifying important 
                      factors that could cause actual results to differ 
                      materially from those in the forward-looking 
                      statement; or
                          ``(ii) immaterial; or
                    ``(B) the plaintiff fails to prove that the forward-
                looking statement--
                          ``(i) if made by a natural person, was made 
                      with actual knowledge by that person that the 
                      statement was false or misleading; or
                          ``(ii) if made by a business entity; was--
                                    ``(I) made by or with the approval 
                                of an executive officer of that entity, 
                                and
                                    ``(II) made or approved by such 
                                officer with actual knowledge by that 
                                officer that the statement was false or 
                                misleading.

[[Page 109 STAT. 751]]

            ``(2) Oral forward-looking statements.--In the case of an 
        oral forward-looking statement made by an issuer that is subject 
        to the reporting requirements of section 13(a) or section 15(d) 
        of the Securities Exchange Act of 1934, or by a person acting on 
        behalf of such issuer, the requirement set forth in paragraph 
        (1)(A) shall be deemed to be satisfied--
                    ``(A) if the oral forward-looking statement is 
                accompanied by a cautionary statement--
                          ``(i) that the particular oral statement is a 
                      forward-looking statement; and
                          ``(ii) that the actual results could differ 
                      materially from those projected in the forward-
                      looking statement; and
                    ``(B) if--
                          ``(i) the oral forward-looking statement is 
                      accompanied by an oral statement that additional 
                      information concerning factors that could cause 
                      actual results to differ materially from those in 
                      the forward-looking statement is contained in a 
                      readily available written document, or portion 
                      thereof;
                          ``(ii) the accompanying oral statement 
                      referred to in clause (i) identifies the document, 
                      or portion thereof, that contains the additional 
                      information about those factors relating to the 
                      forward-looking statement; and
                          ``(iii) the information contained in that 
                      written document is a cautionary statement that 
                      satisfies the standard established in paragraph 
                      (1)(A).
            ``(3) Availability.--Any document filed with the Commission 
        or generally disseminated shall be deemed to be readily 
        available for purposes of paragraph (2).
            ``(4) Effect on other safe harbors.--The exemption provided 
        for in paragraph (1) shall be in addition to any exemption that 
        the Commission may establish by rule or regulation under 
        subsection (g).

    ``(d) Duty To Update.--Nothing in this section shall impose upon any 
person a duty to update a forward-looking statement.
    ``(e) Dispositive Motion.--On any motion to dismiss based upon 
subsection (c)(1), the court shall consider any statement cited in the 
complaint and cautionary statement accompanying the forward-looking 
statement, which are not subject to material dispute, cited by the 
defendant.
    ``(f) Stay Pending Decision on Motion.--In any private action 
arising under this title, the court shall stay discovery (other than 
discovery that is specifically directed to the applicability of the 
exemption provided for in this section) during the pendency of any 
motion by a defendant for summary judgment that is based on the grounds 
that--
            ``(1) the statement or omission upon which the complaint is 
        based is a forward-looking statement within the meaning of this 
        section; and
            ``(2) the exemption provided for in this section precludes a 
        claim for relief.

    ``(g) Exemption Authority.--In addition to the exemptions provided 
for in this section, the Commission may, by rule or regulation, provide 
exemptions from or under any provision of this title, including with 
respect to liability that is based on a statement or that is based on 
projections or other forward-looking information,

[[Page 109 STAT. 752]]

if and to the extent that any such exemption is consistent with the 
public interest and the protection of investors, as determined by the 
Commission.
    ``(h) Effect on Other Authority of Commission.--Nothing in this 
section limits, either expressly or by implication, the authority of the 
Commission to exercise similar authority or to adopt similar rules and 
regulations with respect to forward-looking statements under any other 
statute under which the Commission exercises rulemaking authority.
    ``(i) Definitions.--For purposes of this section, the following 
definitions shall apply:
            ``(1) Forward-looking statement.--The term `forward-looking 
        statement' means--
                    ``(A) a statement containing a projection of 
                revenues, income (including income loss), earnings 
                (including earnings loss) per share, capital 
                expenditures, dividends, capital structure, or other 
                financial items;
                    ``(B) a statement of the plans and objectives of 
                management for future operations, including plans or 
                objectives relating to the products or services of the 
                issuer;
                    ``(C) a statement of future economic performance, 
                including any such statement contained in a discussion 
                and analysis of financial condition by the management or 
                in the results of operations included pursuant to the 
                rules and regulations of the Commission;
                    ``(D) any statement of the assumptions underlying or 
                relating to any statement described in subparagraph (A), 
                (B), or (C);
                    ``(E) any report issued by an outside reviewer 
                retained by an issuer, to the extent that the report 
                assesses a forward-looking statement made by the issuer; 
                or
                    ``(F) a statement containing a projection or 
                estimate of such other items as may be specified by rule 
                or regulation of the Commission.
            ``(2) Investment company.--The term `investment company' has 
        the same meaning as in section 3(a) of the Investment Company 
        Act of 1940.
            ``(3) Penny stock.--The term `penny stock' has the same 
        meaning as in section 3(a)(51) of the Securities Exchange Act of 
        1934, and the rules and regulations, or orders issued pursuant 
        to that section.
            ``(4) Going private transaction.--The term `going private 
        transaction' has the meaning given that term under the rules or 
        regulations of the Commission issued pursuant to section 13(e) 
        of the Securities Exchange Act of 1934.
            ``(5) Securities laws.--The term `securities laws' has the 
        same meaning as in section 3 of the Securities Exchange Act of 
        1934.
            ``(6) Person acting on behalf of an issuer.--The term 
        `person acting on behalf of an issuer' means an officer, 
        director, or employee of the issuer.
            ``(7) Other terms.--The terms `blank check company', `rollup 
        transaction', `partnership', `limited liability company', 
        `executive officer of an entity' and `direct participation 
        investment program', have the meanings given those terms by rule 
        or regulation of the Commission.''.

[[Page 109 STAT. 753]]

    (b) Amendment to the Securities Exchange Act of 1934.--The 
Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is amended by 
inserting after section 21D (as added by this Act) the following new 
section:

``SEC. 21E. <<NOTE: 15 USC 78u-5.>> APPLICATION OF SAFE HARBOR FOR 
            FORWARD-LOOKING STATEMENTS.

    ``(a) Applicability.--This section shall apply only to a forward-
looking statement made by--
            ``(1) an issuer that, at the time that the statement is 
        made, is subject to the reporting requirements of section 13(a) 
        or section 15(d);
            ``(2) a person acting on behalf of such issuer;
            ``(3) an outside reviewer retained by such issuer making a 
        statement on behalf of such issuer; or
            ``(4) an underwriter, with respect to information provided 
        by such issuer or information derived from information provided 
        by such issuer.

    ``(b) Exclusions.--Except to the extent otherwise specifically 
provided by rule, regulation, or order of the Commission, this section 
shall not apply to a forward-looking statement--
            ``(1) that is made with respect to the business or 
        operations of the issuer, if the issuer--
                    ``(A) during the 3-year period preceding the date on 
                which the statement was first made--
                          ``(i) was convicted of any felony or 
                      misdemeanor described in clauses (i) through (iv) 
                      of section 15(b)(4)(B); or
                          ``(ii) has been made the subject of a judicial 
                      or administrative decree or order arising out of a 
                      governmental action that--
                                    ``(I) prohibits future violations of 
                                the antifraud provisions of the 
                                securities laws;
                                    ``(II) requires that the issuer 
                                cease and desist from violating the 
                                antifraud provisions of the securities 
                                laws; or
                                    ``(III) determines that the issuer 
                                violated the antifraud provisions of the 
                                securities laws;
                    ``(B) makes the forward-looking statement in 
                connection with an offering of securities by a blank 
                check company;
                    ``(C) issues penny stock;
                    ``(D) makes the forward-looking statement in 
                connection with a rollup transaction; or
                    ``(E) makes the forward-looking statement in 
                connection with a going private transaction; or
            ``(2) that is--
                    ``(A) included in a financial statement prepared in 
                accordance with generally accepted accounting 
                principles;
                    ``(B) contained in a registration statement of, or 
                otherwise issued by, an investment company;
                    ``(C) made in connection with a tender offer;
                    ``(D) made in connection with an initial public 
                offering;
                    ``(E) made in connection with an offering by, or 
                relating to the operations of, a partnership, limited 
                liability company, or a direct participation investment 
                program; or

[[Page 109 STAT. 754]]

                    ``(F) made in a disclosure of beneficial ownership 
                in a report required to be filed with the Commission 
                pursuant to section 13(d).

    ``(c) Safe Harbor.--
            ``(1) In general.--Except as provided in subsection (b), in 
        any private action arising under this title that is based on an 
        untrue statement of a material fact or omission of a material 
        fact necessary to make the statement not misleading, a person 
        referred to in subsection (a) shall not be liable with respect 
        to any forward-looking statement, whether written or oral, if 
        and to the extent that--
                    ``(A) the forward-looking statement is--
                          ``(i) identified as a forward-looking 
                      statement, and is accompanied by meaningful 
                      cautionary statements identifying important 
                      factors that could cause actual results to differ 
                      materially from those in the forward-looking 
                      statement; or
                          ``(ii) immaterial; or
                    ``(B) the plaintiff fails to prove that the forward-
                looking statement--
                          ``(i) if made by a natural person, was made 
                      with actual knowledge by that person that the 
                      statement was false or misleading; or
                          ``(ii) if made by a business entity; was--
                                    ``(I) made by or with the approval 
                                of an executive officer of that entity; 
                                and
                                    ``(II) made or approved by such 
                                officer with actual knowledge by that 
                                officer that the statement was false or 
                                misleading.
            ``(2) Oral forward-looking statements.--In the case of an 
        oral forward-looking statement made by an issuer that is subject 
        to the reporting requirements of section 13(a) or section 15(d), 
        or by a person acting on behalf of such issuer, the requirement 
        set forth in paragraph (1)(A) shall be deemed to be satisfied--
                    ``(A) if the oral forward-looking statement is 
                accompanied by a cautionary statement--
                          ``(i) that the particular oral statement is a 
                      forward-looking statement; and
                          ``(ii) that the actual results might differ 
                      materially from those projected in the forward-
                      looking statement; and
                    ``(B) if--
                          ``(i) the oral forward-looking statement is 
                      accompanied by an oral statement that additional 
                      information concerning factors that could cause 
                      actual results to materially differ from those in 
                      the forward-looking statement is contained in a 
                      readily available written document, or portion 
                      thereof;
                          ``(ii) the accompanying oral statement 
                      referred to in clause (i) identifies the document, 
                      or portion thereof, that contains the additional 
                      information about those factors relating to the 
                      forward-looking statement; and
                          ``(iii) the information contained in that 
                      written document is a cautionary statement that 
                      satisfies the standard established in paragraph 
                      (1)(A).

[[Page 109 STAT. 755]]

            ``(3) Availability.--Any document filed with the Commission 
        or generally disseminated shall be deemed to be readily 
        available for purposes of paragraph (2).
            ``(4) Effect on other safe harbors.--The exemption provided 
        for in paragraph (1) shall be in addition to any exemption that 
        the Commission may establish by rule or regulation under 
        subsection (g).

    ``(d) Duty To Update.--Nothing in this section shall impose upon any 
person a duty to update a forward-looking statement.
    ``(e) Dispositive Motion.--On any motion to dismiss based upon 
subsection (c)(1), the court shall consider any statement cited in the 
complaint and any cautionary statement accompanying the forward-looking 
statement, which are not subject to material dispute, cited by the 
defendant.
    ``(f) Stay Pending Decision on Motion.--In any private action 
arising under this title, the court shall stay discovery (other than 
discovery that is specifically directed to the applicability of the 
exemption provided for in this section) during the pendency of any 
motion by a defendant for summary judgment that is based on the grounds 
that--
            ``(1) the statement or omission upon which the complaint is 
        based is a forward-looking statement within the meaning of this 
        section; and
            ``(2) the exemption provided for in this section precludes a 
        claim for relief.

    ``(g) Exemption Authority.--In addition to the exemptions provided 
for in this section, the Commission may, by rule or regulation, provide 
exemptions from or under any provision of this title, including with 
respect to liability that is based on a statement or that is based on 
projections or other forward-looking information, if and to the extent 
that any such exemption is consistent with the public interest and the 
protection of investors, as determined by the Commission.
    ``(h) Effect on Other Authority of Commission.--Nothing in this 
section limits, either expressly or by implication, the authority of the 
Commission to exercise similar authority or to adopt similar rules and 
regulations with respect to forward-looking statements under any other 
statute under which the Commission exercises rulemaking authority.
    ``(i) Definitions.--For purposes of this section, the following 
definitions shall apply:
            ``(1) Forward-looking statement.--The term `forward-looking 
        statement' means--
                    ``(A) a statement containing a projection of 
                revenues, income (including income loss), earnings 
                (including earnings loss) per share, capital 
                expenditures, dividends, capital structure, or other 
                financial items;
                    ``(B) a statement of the plans and objectives of 
                management for future operations, including plans or 
                objectives relating to the products or services of the 
                issuer;
                    ``(C) a statement of future economic performance, 
                including any such statement contained in a discussion 
                and analysis of financial condition by the management or 
                in the results of operations included pursuant to the 
                rules and regulations of the Commission;

[[Page 109 STAT. 756]]

                    ``(D) any statement of the assumptions underlying or 
                relating to any statement described in subparagraph (A), 
                (B), or (C);
                    ``(E) any report issued by an outside reviewer 
                retained by an issuer, to the extent that the report 
                assesses a forward-looking statement made by the issuer; 
                or
                    ``(F) a statement containing a projection or 
                estimate of such other items as may be specified by rule 
                or regulation of the Commission.
            ``(2) Investment company.--The term `investment company' has 
        the same meaning as in section 3(a) of the Investment Company 
        Act of 1940.
            ``(3) Going private transaction.--The term `going private 
        transaction' has the meaning given that term under the rules or 
        regulations of the Commission issued pursuant to section 13(e).
            ``(4) Person acting on behalf of an issuer.--The term 
        `person acting on behalf of an issuer' means any officer, 
        director, or employee of such issuer.
            ``(5) Other terms.--The terms `blank check company', `rollup 
        transaction', `partnership', `limited liability company', 
        `executive officer of an entity' and `direct participation 
        investment program', have the meanings given those terms by rule 
        or regulation of the Commission.''.

SEC. 103. ELIMINATION OF CERTAIN ABUSIVE PRACTICES.

    (a) Prohibition of Referral Fees.--Section 15(c) of the Securities 
Exchange Act of 1934 (15 U.S.C. 78o(c)) is amended by adding at the end 
the following new paragraph:
            ``(8) Prohibition of referral fees.--No broker or dealer, or 
        person associated with a broker or dealer, may solicit or 
        accept, directly or indirectly, remuneration for assisting an 
        attorney in obtaining the representation of any person in any 
        private action arising under this title or under the Securities 
        Act of 1933.''.

    (b) Prohibition of Attorneys' Fees Paid From Commission Disgorgement 
Funds.--
            (1) Securities act of 1933.--Section 20 of the Securities 
        Act of 1933 (15 U.S.C. 77t) is amended by adding at the end the 
        following new subsection:

    ``(f) Prohibition of Attorneys' Fees Paid From Commission 
Disgorgement Funds.--Except as otherwise ordered by the court upon 
motion by the Commission, or, in the case of an administrative action, 
as otherwise ordered by the Commission, funds disgorged as the result of 
an action brought by the Commission in Federal court, or as a result of 
any Commission administrative action, shall not be distributed as 
payment for attorneys' fees or expenses incurred by private parties 
seeking distribution of the disgorged funds.''.
            (2) Securities exchange act of 1934.--Section 21(d) of the 
        Securities Exchange Act of 1934 (15 U.S.C. 78u(d)) is amended by 
        adding at the end the following new paragraph:
            ``(4) Prohibition of attorneys' fees paid from commission 
        disgorgement funds.--Except as otherwise ordered by the court 
        upon motion by the Commission, or, in the case of an 
        administrative action, as otherwise ordered by the Commission, 
        funds disgorged as the result of an action brought

[[Page 109 STAT. 757]]

        by the Commission in Federal court, or as a result of any 
        Commission administrative action, shall not be distributed as 
        payment for attorneys' fees or expenses incurred by private 
        parties seeking distribution of the disgorged funds.''.

SEC. 104. AUTHORITY OF COMMISSION TO PROSECUTE AIDING AND ABETTING.

    Section 20 of the Securities Exchange Act of 1934 (15 U.S.C. 78t) is 
amended--
            (1) by striking the section heading and inserting the 
        following:

    ``liability of controlling persons and persons who aid and abet 
                              violations'';

        and
            (2) by adding at the end the following new subsection:

    ``(f) Prosecution of Persons Who Aid and Abet Violations.--For 
purposes of any action brought by the Commission under paragraph (1) or 
(3) of section 21(d), any person that knowingly provides substantial 
assistance to another person in violation of a provision of this title, 
or of any rule or regulation issued under this title, shall be deemed to 
be in violation of such provision to the same extent as the person to 
whom such assistance is provided.''.

SEC. 105. LOSS CAUSATION.

    Section 12 of the Securities Act of 1933 (15 U.S.C. 77l) is 
amended--
            (1) by inserting ``(a) In General.--'' before ``Any 
        person'';
            (2) by inserting ``, subject to subsection (b),'' after 
        ``shall be liable''; and
            (3) by adding at the end the following:

    ``(b) Loss Causation.--In an action described in subsection (a)(2), 
if the person who offered or sold such security proves that any portion 
or all of the amount recoverable under subsection (a)(2) represents 
other than the depreciation in value of the subject security resulting 
from such part of the prospectus or oral communication, with respect to 
which the liability of that person is asserted, not being true or 
omitting to state a material fact required to be stated therein or 
necessary to make the statement not misleading, then such portion or 
amount, as the case may be, shall not be recoverable.''.

SEC. 106. STUDY AND REPORT ON PROTECTIONS FOR SENIOR CITIZENS AND 
            QUALIFIED RETIREMENT PLANS.

    (a) In General.--Not later than 180 days after the date of enactment 
of this Act, the Securities and Exchange Commission shall--
            (1) determine whether investors that are senior citizens or 
        qualified retirement plans require greater protection against 
        securities fraud than is provided in this Act and the amendments 
        made by this Act;
            (2) determine whether investors that are senior citizens or 
        qualified retirement plans have been adversely impacted by 
        abusive or unnecessary securities fraud litigation, and whether 
        the provisions in this Act or amendments made by

[[Page 109 STAT. 758]]

        this Act are sufficient to protect their investments from such 
        litigation; and
            (3) <<NOTE: Reports.>> if so, submit to the Congress a 
        report containing recommendations on protections from securities 
        fraud and abusive or unnecessary securities fraud litigation 
        that the Commission determines to be appropriate to thoroughly 
        protect such investors.

    (b) Definitions.--For purposes of this section--
            (1) the term ``qualified retirement plan'' has the same 
        meaning as in section 4974(c) of the Internal Revenue Code of 
        1986; and
            (2) the term ``senior citizen'' means an individual who is 
        62 years of age or older as of the date of the securities 
        transaction at issue.

SEC. 107. AMENDMENT TO RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS 
            ACT.

    Section 1964(c) of title 18, United States Code, is amended by 
inserting before the period ``, except that no person may rely upon any 
conduct that would have been actionable as fraud in the purchase or sale 
of securities to establish a violation of section 1962. The exception 
contained in the preceding sentence does not apply to an action against 
any person that is criminally convicted in connection with the fraud, in 
which case the statute of limitations shall start to run on the date on 
which the conviction becomes final''.

SEC. 108. <<NOTE: 15 USC 77l note.>> APPLICABILITY.

    The amendments made by this title shall not affect or apply to any 
private action arising under title I of the Securities Exchange Act of 
1934 or title I of the Securities Act of 1933, commenced before and 
pending on the date of enactment of this Act.

               TITLE II--REDUCTION OF COERCIVE SETTLEMENTS

SEC. 201. PROPORTIONATE LIABILITY.

    (a) Amendment to Securities and Exchange Act of 1934.--Section 21D 
of the Securities Exchange Act of 1934 (as added by this Act) <<NOTE: 15 
USC 78u-4.>> is amended by adding at the end the following new 
subsection:

    ``(g) Proportionate Liability.--
            ``(1) Applicability.--Nothing in this subsection shall be 
        construed to create, affect, or in any manner modify, the 
        standard for liability associated with any action arising under 
        the securities laws.
            ``(2) Liability for damages.--
                    ``(A) Joint and several liability.--Any covered 
                person against whom a final judgment is entered in a 
                private action shall be liable for damages jointly and 
                severally only if the trier of fact specifically 
                determines that such covered person knowingly committed 
                a violation of the securities laws.
                    ``(B) Proportionate liability.--
                          ``(i) In general.--Except as provided in 
                      paragraph (1), a covered person against whom a 
                      final judgment

[[Page 109 STAT. 759]]

                      is entered in a private action shall be liable 
                      solely for the portion of the judgment that 
                      corresponds to the percentage of responsibility of 
                      that covered person, as determined under paragraph 
                      (3).
                          ``(ii) Recovery by and costs of covered 
                      person.--In any case in which a contractual 
                      relationship permits, a covered person that 
                      prevails in any private action may recover the 
                      attorney's fees and costs of that covered person 
                      in connection with the action.
            ``(3) Determination of responsibility.--
                    ``(A) In general.--In any private action, the court 
                shall instruct the jury to answer special 
                interrogatories, or if there is no jury, shall make 
                findings, with respect to each covered person and each 
                of the other persons claimed by any of the parties to 
                have caused or contributed to the loss incurred by the 
                plaintiff, including persons who have entered into 
                settlements with the plaintiff or plaintiffs, 
                concerning--
                          ``(i) whether such person violated the 
                      securities laws;
                          ``(ii) the percentage of responsibility of 
                      such person, measured as a percentage of the total 
                      fault of all persons who caused or contributed to 
                      the loss incurred by the plaintiff; and
                          ``(iii) whether such person knowingly 
                      committed a violation of the securities laws.
                    ``(B) Contents of special interrogatories or 
                findings.--The responses to interrogatories, or 
                findings, as appropriate, under subparagraph (A) shall 
                specify the total amount of damages that the plaintiff 
                is entitled to recover and the percentage of 
                responsibility of each covered person found to have 
                caused or contributed to the loss incurred by the 
                plaintiff or plaintiffs.
                    ``(C) Factors for consideration.--In determining the 
                percentage of responsibility under this paragraph, the 
                trier of fact shall consider--
                          ``(i) the nature of the conduct of each 
                      covered person found to have caused or contributed 
                      to the loss incurred by the plaintiff or 
                      plaintiffs; and
                          ``(ii) the nature and extent of the causal 
                      relationship between the conduct of each such 
                      person and the damages incurred by the plaintiff 
                      or plaintiffs.
            ``(4) Uncollectible share.--
                    ``(A) In general.--Notwithstanding paragraph (2)(B), 
                upon motion made not later than 6 months after a final 
                judgment is entered in any private action, the court 
                determines that all or part of the share of the judgment 
                of the covered person is not collectible against that 
                covered person, and is also not collectible against a 
                covered person described in paragraph (2)(A), each 
                covered person described in paragraph (2)(B) shall be 
                liable for the uncollectible share as follows:
                          ``(i) Percentage of net worth.--Each covered 
                      person shall be jointly and severally liable for 
                      the uncollectible share if the plaintiff 
                      establishes that--
                                    ``(I) the plaintiff is an individual 
                                whose recoverable damages under the 
                                final judgment are

[[Page 109 STAT. 760]]

                                equal to more than 10 percent of the net 
                                worth of the plaintiff; and
                                    ``(II) the net worth of the 
                                plaintiff is equal to less than 
                                $200,000.
                          ``(ii) Other plaintiffs.--With respect to any 
                      plaintiff not described in subclauses (I) and (II) 
                      of clause (i), each covered person shall be liable 
                      for the uncollectible share in proportion to the 
                      percentage of responsibility of that covered 
                      person, except that the total liability of a 
                      covered person under this clause may not exceed 50 
                      percent of the proportionate share of that covered 
                      person, as determined under paragraph (3)(B).
                          ``(iii) Net worth.--For purposes of this 
                      subparagraph, net worth shall be determined as of 
                      the date immediately preceding the date of the 
                      purchase or sale (as applicable) by the plaintiff 
                      of the security that is the subject of the action, 
                      and shall be equal to the fair market value of 
                      assets, minus liabilities, including the net value 
                      of the investments of the plaintiff in real and 
                      personal property (including personal residences).
                    ``(B) Overall limit.--In no case shall the total 
                payments required pursuant to subparagraph (A) exceed 
                the amount of the uncollectible share.
                    ``(C) Covered persons subject to contribution.--A 
                covered person against whom judgment is not collectible 
                shall be subject to contribution and to any continuing 
                liability to the plaintiff on the judgment.
            ``(5) Right of contribution.--To the extent that a covered 
        person is required to make an additional payment pursuant to 
        paragraph (4), that covered person may recover contribution--
                    ``(A) from the covered person originally liable to 
                make the payment;
                    ``(B) from any covered person liable jointly and 
                severally pursuant to paragraph (2)(A);
                    ``(C) from any covered person held proportionately 
                liable pursuant to this paragraph who is liable to make 
                the same payment and has paid less than his or her 
                proportionate share of that payment; or
                    ``(D) from any other person responsible for the 
                conduct giving rise to the payment that would have been 
                liable to make the same payment.
            ``(6) Nondisclosure to jury.--The standard for allocation of 
        damages under paragraphs (2) and (3) and the procedure for 
        reallocation of uncollectible shares under paragraph (4) shall 
        not be disclosed to members of the jury.
            ``(7) Settlement discharge.--
                    ``(A) In general.--A covered person who settles any 
                private action at any time before final verdict or 
                judgment shall be discharged from all claims for 
                contribution brought by other persons. Upon entry of the 
                settlement by the court, the court shall enter a bar 
                order constituting the final discharge of all 
                obligations to the plaintiff of the settling covered 
                person arising out of the action. The order

[[Page 109 STAT. 761]]

                shall bar all future claims for contribution arising out 
                of the action--
                          ``(i) by any person against the settling 
                      covered person; and
                          ``(ii) by the settling covered person against 
                      any person, other than a person whose liability 
                      has been extinguished by the settlement of the 
                      settling covered person.
                    ``(B) Reduction.--If a covered person enters into a 
                settlement with the plaintiff prior to final verdict or 
                judgment, the verdict or judgment shall be reduced by 
                the greater of--
                          ``(i) an amount that corresponds to the 
                      percentage of responsibility of that covered 
                      person; or
                          ``(ii) the amount paid to the plaintiff by 
                      that covered person.
            ``(8) Contribution.--A covered person who becomes jointly 
        and severally liable for damages in any private action may 
        recover contribution from any other person who, if joined in the 
        original action, would have been liable for the same damages. A 
        claim for contribution shall be determined based on the 
        percentage of responsibility of the claimant and of each person 
        against whom a claim for contribution is made.
            ``(9) Statute of limitations for contribution.--In any 
        private action determining liability, an action for contribution 
        shall be brought not later than 6 months after the entry of a 
        final, nonappealable judgment in the action, except that an 
        action for contribution brought by a covered person who was 
        required to make an additional payment pursuant to paragraph (4) 
        may be brought not later than 6 months after the date on which 
        such payment was made.
            ``(10) Definitions.--For purposes of this subsection--
                    ``(A) a covered person `knowingly commits a 
                violation of the securities laws'--
                          ``(i) with respect to an action that is based 
                      on an untrue statement of material fact or 
                      omission of a material fact necessary to make the 
                      statement not misleading, if--
                                    ``(I) that covered person makes an 
                                untrue statement of a material fact, 
                                with actual knowledge that the 
                                representation is false, or omits to 
                                state a fact necessary in order to make 
                                the statement made not misleading, with 
                                actual knowledge that, as a result of 
                                the omission, one of the material 
                                representations of the covered person is 
                                false; and
                                    ``(II) persons are likely to 
                                reasonably rely on that 
                                misrepresentation or omission; and
                          ``(ii) with respect to an action that is based 
                      on any conduct that is not described in clause 
                      (i), if that covered person engages in that 
                      conduct with actual knowledge of the facts and 
                      circumstances that make the conduct of that 
                      covered person a violation of the securities laws;
                    ``(B) reckless conduct by a covered person shall not 
                be construed to constitute a knowing commission of a 
                violation of the securities laws by that covered person;

[[Page 109 STAT. 762]]

                    ``(C) the term `covered person' means--
                          ``(i) a defendant in any private action 
                      arising under this title; or
                          ``(ii) a defendant in any private action 
                      arising under section 11 of the Securities Act of 
                      1933, who is an outside director of the issuer of 
                      the securities that are the subject of the action; 
                      and
                    ``(D) the term `outside director' shall have the 
                meaning given such term by rule or regulation of the 
                Commission.''.

    (b) Amendments to the Securities Act of 1933.--Section 11(f) of the 
Securities Act of 1933 (12 U.S.C. 77k(f)) <<NOTE: 15 USC 77k.>> is 
amended--
            (1) by striking ``All'' and inserting ``(1) Except as 
        provided in paragraph (2), all''; and
            (2) by adding at the end the following new paragraph:

    ``(2)(A) The liability of an outside director under subsection (e) 
shall be determined in accordance with section 38 of the Securities 
Exchange Act of 1934.
    ``(B) For purposes of this paragraph, the term `outside director' 
shall have the meaning given such term by rule or regulation of the 
Commission .''.

SEC. 202. <<NOTE: 15 USC 77k note.>> APPLICABILITY.

    The amendments made by this title shall not affect or apply to any 
private action arising under the securities laws commenced before and 
pending on the date of enactment of this Act.

SEC. 203. <<NOTE: 15 USC 78j-1 note.>> RULE OF CONSTRUCTION.

    Nothing in this Act or the amendments made by this Act shall be 
deemed to create or ratify any implied private right of action, or to 
prevent the Commission, by rule or regulation, from restricting or 
otherwise regulating private actions under the Securities Exchange Act 
of 1934.

            TITLE III--AUDITOR DISCLOSURE OF CORPORATE FRAUD

SEC. 301. FRAUD DETECTION AND DISCLOSURE.

    (a) In General.--The Securities Exchange Act of 1934 (15 U.S.C. 78a 
et seq.) is amended by inserting immediately after section 10 the 
following new section:

``SEC. 10A. <<NOTE: 15 USC 78j-1.>> AUDIT REQUIREMENTS.

    ``(a) In General.--Each audit required pursuant to this title of the 
financial statements of an issuer by an independent public accountant 
shall include, in accordance with generally accepted auditing standards, 
as may be modified or supplemented from time to time by the Commission--
            ``(1) procedures designed to provide reasonable assurance of 
        detecting illegal acts that would have a direct and material 
        effect on the determination of financial statement amounts;
            ``(2) procedures designed to identify related party 
        transactions that are material to the financial statements or 
        otherwise require disclosure therein; and
            ``(3) an evaluation of whether there is substantial doubt 
        about the ability of the issuer to continue as a going concern 
        during the ensuing fiscal year.

[[Page 109 STAT. 763]]

    ``(b) Required Response To Audit Discoveries.--
            ``(1) Investigation and report to management.--If, in the 
        course of conducting an audit pursuant to this title to which 
        subsection (a) applies, the independent public accountant 
        detects or otherwise becomes aware of information indicating 
        that an illegal act (whether or not perceived to have a material 
        effect on the financial statements of the issuer) has or may 
        have occurred, the accountant shall, in accordance with 
        generally accepted auditing standards, as may be modified or 
        supplemented from time to time by the Commission--
                    ``(A)(i) determine whether it is likely that an 
                illegal act has occurred; and
                    ``(ii) if so, determine and consider the possible 
                effect of the illegal act on the financial statements of 
                the issuer, including any contingent monetary effects, 
                such as fines, penalties, and damages; and
                    ``(B) as soon as practicable, inform the appropriate 
                level of the management of the issuer and assure that 
                the audit committee of the issuer, or the board of 
                directors of the issuer in the absence of such a 
                committee, is adequately informed with respect to 
                illegal acts that have been detected or have otherwise 
                come to the attention of such accountant in the course 
                of the audit, unless the illegal act is clearly 
                inconsequential.
            ``(2) Response to failure to take remedial action.--If, 
        after determining that the audit committee of the board of 
        directors of the issuer, or the board of directors of the issuer 
        in the absence of an audit committee, is adequately informed 
        with respect to illegal acts that have been detected or have 
        otherwise come to the attention of the accountant in the course 
        of the audit of such accountant, the independent public 
        accountant concludes that--
                    ``(A) the illegal act has a material effect on the 
                financial statements of the issuer;
                    ``(B) the senior management has not taken, and the 
                board of directors has not caused senior management to 
                take, timely and appropriate remedial actions with 
                respect to the illegal act; and
                    ``(C) the failure to take remedial action is 
                reasonably expected to warrant departure from a standard 
                report of the auditor, when made, or warrant resignation 
                from the audit engagement;
        the independent public accountant shall, as soon as practicable, 
        directly report its conclusions to the board of directors.
            ``(3) Notice to commission; response to failure to notify.--
        An issuer whose board of directors receives a report under 
        paragraph (2) shall inform the Commission by notice not later 
        than 1 business day after the receipt of such report and shall 
        furnish the independent public accountant making such report 
        with a copy of the notice furnished to the Commission. If the 
        independent public accountant fails to receive a copy of the 
        notice before the expiration of the required 1-business-day 
        period, the independent public accountant shall--
                    ``(A) resign from the engagement; or
                    ``(B) furnish to the Commission a copy of its report 
                (or the documentation of any oral report given) not 
                later than 1 business day following such failure to 
                receive notice.

[[Page 109 STAT. 764]]

            ``(4) Report after resignation.--If an independent public 
        accountant resigns from an engagement under paragraph (3)(A), 
        the accountant shall, not later than 1 business day following 
        the failure by the issuer to notify the Commission under 
        paragraph (3), furnish to the Commission a copy of the 
        accountant's report (or the documentation of any oral report 
        given).

    ``(c) Auditor Liability Limitation.--No independent public 
accountant shall be liable in a private action for any finding, 
conclusion, or statement expressed in a report made pursuant to 
paragraph (3) or (4) of subsection (b), including any rule promulgated 
pursuant thereto.
    ``(d) Civil Penalties in Cease-and-Desist Proceedings.--If the 
Commission finds, after notice and opportunity for hearing in a 
proceeding instituted pursuant to section 21C, that an independent 
public accountant has willfully violated paragraph (3) or (4) of 
subsection (b), the Commission may, in addition to entering an order 
under section 21C, impose a civil penalty against the independent public 
accountant and any other person that the Commission finds was a cause of 
such violation. The determination to impose a civil penalty and the 
amount of the penalty shall be governed by the standards set forth in 
section 21B.
    ``(e) Preservation of Existing Authority.--Except as provided in 
subsection (d), nothing in this section shall be held to limit or 
otherwise affect the authority of the Commission under this title.
    ``(f) Definition.--As used in this section, the term `illegal act' 
means an act or omission that violates any law, or any rule or 
regulation having the force of law.''.
    (b) <<NOTE: 15 USC 78j-1 note.>> Effective Dates.--The amendment 
made by subsection (a) shall apply to each annual report--
            (1) for any period beginning on or after January 1, 1996, 
        with respect to any registrant that is required to file selected 
        quarterly financial data pursuant to the rules or regulations of 
        the Securities and Exchange Commission; and
            (2) for any period beginning on or after January 1, 1997, 
        with respect to any other registrant.

Newt Gingrich

Speaker of the House of Representatives.

Strom Thurmond

President of the Senate pro tempore.

                  IN THE HOUSE OF REPRESENTATIVES, U.S.

December 20, 1995.

  The House of Representatives having proceeded to reconsider the bill 
(H.R. 1058) entitled ``An Act to reform Federal securities litigation, 
and for other purposes'', returned by the President of the United States 
with his objections, to the House of Representatives, in which it 
originated, it was

[[Page 109 STAT. 765]]

  Resolved, That the said bill pass, two-thirds of the House of 
Representatives agreeing to pass the same.

Robin H. Carle

Clerk.

   I certify that this Act originated in the House of Representatives.

Robin H. Carle

Clerk.

                   IN THE SENATE OF THE UNITED STATES,

December 22, 1995.

  The Senate having proceeded to reconsider the bill (H.R. 1058) 
entitled ``An Act to reform Federal securities litigation, and for other 
purposes'', returned by the President of the United States with his 
objections, to the House of Representatives, in which it originated, and 
passed by the House of Representatives on reconsideration of the same, 
it was
  Resolved, That the said bill pass, two-thirds of the Senators present 
having voted in the affirmative.
  
  Attest:

Kelly P. Johnston

Secretary.

      

LEGISLATIVE HISTORY--H.R. 1058 (S. 240):
---------------------------------------------------------------------------

HOUSE REPORTS: No. 104-369 (Comm. of Conference).
SENATE REPORTS: No. 104-98 accompanying S. 240 (Comm. on Banking, 
Housing, and Urban Affairs).
CONGRESSIONAL RECORD, Vol. 141 (1995):
            Mar. 7, 8, considered and passed House.
            June 22, 23, 26-28, considered and passed Senate, amended, 
                in lieu of S. 240.
            Dec. 5, Senate agreed to conference report.
            Dec. 6, House agreed to conference report.
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 31 (1995):
            Dec. 19, Presidential veto message.
CONGRESSIONAL RECORD, Vol. 141 (1995):
            Dec. 20, House overrode veto.
            Dec. 22, Senate overrode veto.

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