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‘‘(5) OTHER INFORMATION.—Such other infor-
mation as may be required by the court.
‘‘(o) CONTRIBUTION IN ACTIONS BROUGHT UNDER
SECTION 10(b).—
‘‘(1) RIGHT
TO
CONTRIBUTION.—Any person
who becomes jointly and severally liable for damages
under section 10(b) of this title may recover con-
tribution.
‘‘(2) SETTLEMENT
DISCHARGE.—Any defend-
ant who, in good faith, settles an action brought
under section 10(b) of this title at any time before
verdict or judgment shall be discharged from all
claims for contribution brought by other persons.
Upon the determination by the court that the settle-
ment was entered into in good faith, the court shall
enter a bar order constituting the final discharge of
all obligations to the plaintiff of the settling defend-
ant arising out of the action. The order shall bar
both 
(A) 
future 
claims 
for 
contribution 
by
nonsettling persons against the settling defendant
and (B) future claims for contribution by the set-
tling defendant against any nonsettling defendants.
‘‘(3) APPORTIONMENT OF LIABILITY.—Liability
shall be apportioned as follows:
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‘‘(A) In addition to determining the total
dollar amount of damages, the trier of fact shall
determine the percentage of responsibility for
those damages of each defendant (including de-
fendants who have entered into settlements with
the plaintiff). Where the trier of fact is a jury,
the court shall instruct the jury, in accordance
with the Federal Rules of Civil Procedure, to
answer interrogatories and prepare the appro-
priate forms for a verdict, specifically indicating
each defendant’s percentage of responsibility for
the damages.
‘‘(B) If one or more defendants has or
have settled an action prior to verdict or judg-
ment, the remaining defendants as a whole
shall be jointly and severally liable for the per-
centage of damages allocated to them under
subparagraph (A).
‘‘(C) The amount of contribution to which
a nonsettling defendant is entitled shall be no
more than the excess paid over and above such
defendant’s share as allocated in subparagraph
(A); except that no nonsettling defendant shall
be required to contribute an amount greater
than the unpaid portion, if any, of such defend-
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ant’s share as allocated in subparagraph (A),
plus such defendant’s proportionate share of
any wholly uncollectible portion of another
nonsettling defendant’s share.
‘‘(4) EFFECT ON PENDING ACTIONS.—This sub-
section shall apply to all actions pending on or com-
menced on or after the date of its enactment.
‘‘(5) STATUTE
OF
LIMITATIONS.—Once judg-
ment has been rendered in an action determining li-
ability, no action for contribution may be brought
after one year after that judgment becomes final.’’.
SEC. 102. SPECIAL REQUIREMENTS FOR CLASS ACTION
COMPLAINTS; MULTIPLE SECURITIES CLASS
ACTIONS; PROCEDURE FOR SELECTING LEAD
COUNSEL IN CLASS ACTIONS; EARLY EVALUA-
TION PROCEDURE.
(a) SPECIAL REQUIREMENTS
FOR CLASS ACTION
COMPLAINTS.—The Securities Exchange Act of 1934 is
amended by inserting after section 27A (15 U.S.C. 78aa–
1) the following new section:
‘‘SEC. 27B. SPECIAL PROVISIONS FOR CLASS ACTIONS.
‘‘(a) CERTIFICATION OF COMPLAINTS.—
‘‘(1) IN GENERAL.—In an implied private ac-
tion arising under this title that is filed as a class
action pursuant to the Federal Rules of Civil Proce-
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dure, each plaintiff seeking to serve as a class rep-
resentative shall provide a certification personally
signed by the plaintiff to be filed with the complaint
that—
‘‘(A) states that the plaintiff has reviewed
the complaint and authorized its filing;
‘‘(B) states that the plaintiff did not pur-
chase the security that is the subject of the
complaint with the intent of commencing litiga-
tion;
‘‘(C) states that the plaintiff did not pur-
chase the security that is the subject of the
complaint at the direction of plaintiff’s counsel;
‘‘(D) states that the plaintiff is willing to
serve as a class representative, including provid-
ing testimony at deposition and trial, if nec-
essary;
‘‘(E) sets forth all the plaintiffs’ trans-
actions in the security that is the subject of the
complaint during the class period specified in
the complaint;
‘‘(F) identifies all suits under this title
which the plaintiff has filed as a class action in
the prior 12 months; and
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‘‘(G) states that the plaintiff will not ac-
cept any payment for serving as class represent-
ative beyond the plaintiff’s pro rata share of
any recovery, except as ordered by the court.
‘‘(2) NON-WAIVER OF ATTORNEY-CLIENT PRIVI-
LEGE.—The certification filed pursuant to para-
graph (1) of this subsection shall not waive the at-
torney-client privilege.
‘‘(b) MULTIPLE SECURITIES CLASS ACTIONS.—
‘‘(1) IN GENERAL.—If more than one implied
private action arising under this title out of substan-
tially the same transaction or occurrence is filed in
one or more Federal courts, and any person or en-
tity is named as defendant in more than one such
action, each action shall be deemed a multiple secu-
rities class action, and the actions shall be deemed
a group of multiple securities class actions.
‘‘(2) 
CONSOLIDATION.—The 
parties 
shall
promptly call to the attention of each court in which
multiple securities class actions are filed the other
actions in the group of multiple securities class ac-
tions. All the actions in the group of multiple securi-
ties class actions shall be transferred or consolidated
(or both) in the most convenient forum before one
judge as promptly as possible. The Judicial Panel on
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Multi-District Litigation shall give expedited treat-
ment to proceedings involving multiple securities
class actions to facilitate their transfer to one dis-
trict as promptly as possible.
‘‘(3) SELECTION
OF
LEAD
COUNSEL.—When
multiple securities class actions are filed, plaintiffs’
counsel shall promptly organize themselves and se-
lect lead counsel to direct the prosecution of the ac-
tions, subject to the approval of the court. If plain-
tiffs’ counsel do not organize themselves, the court
shall promptly designate lead counsel, in no event
later than 45 days after the filing of the first mul-
tiple securities class action. In selecting or designat-
ing lead counsel, plaintiffs’ counsel and the court
shall not give undue weight to the order of filing the
multiple securities class actions.
‘‘(4) LATER-FILED CASES.—Any multiple secu-
rities class action filed after the case organization
period shall be subject to the decisions taken during
the case organization period.
‘‘(c) EARLY EVALUATION PROCEDURE.—
‘‘(1) IN GENERAL.—In an implied private ac-
tion that is filed as a class action pursuant to the
Federal Rules of Civil Procedure, if the class rep-
resentatives and each of the other parties to the ac-
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tion agree, and any party so requests, within 60
days after the filing of the class action, the court
shall order an early evaluation procedure. The period
of the early evaluation procedure shall not extend
beyond 150 days after the filing of the first com-
plaint subject to the procedure.
‘‘(2) REQUIREMENTS.—During the early eval-
uation procedure—
‘‘(A) defendants shall not be required to
answer or otherwise respond to any complaint;
‘‘(B) plaintiffs may file a consolidated or
amended complaint at any time and may dis-
miss the action or actions at any time without
sanction;
‘‘(C) unless otherwise ordered by the court,
no formal discovery shall occur, except that par-
ties may propound discovery requests to third
parties to preserve evidence, and upon receipt
of such a discovery request, a third party shall
not willfully destroy any documents, data com-
pilations (including any electronically stored
data) or tangible things that a reasonable per-
son would consider responsive to the discovery
request;
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‘‘(D) the parties shall evaluate the merits
of the action under the supervision of a person
(the ‘mediator’) (i) agreed upon by them, or (ii)
designated by the court in the absence of agree-
ment, which person may be another district
court judge, any magistrate-judge or a special
master; and each side shall have one peremp-
tory challenge of a mediator designated by the
court by filing a written notice of challenge
within five days of receipt of an order designat-
ing the mediator;
‘‘(E) the parties shall promptly provide ac-
cess to or exchange all nonprivileged documents
relating to the allegations in the complaint or
complaints; and any documents withheld on the
grounds of privilege shall be sufficiently identi-
fied so as to permit the mediator to determine
if they are, in fact, privileged; and
‘‘(F) the parties shall exchange damage
studies and such other expert reports as may be
helpful to an evaluation of the action on the
merits, which materials shall be treated as pre-
pared and used in the context of settlement ne-
gotiations.
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‘‘(3) FAILURE TO PRODUCE DOCUMENTS.—Any
party that fails to produce documents relevant to the
allegations of the complaint or complaints during the
early evaluation procedure may be sanctioned by the
court pursuant to the Federal Rules of Civil Proce-
dure. Notwithstanding paragraph (2) of this sub-
section, subject to review by the court, the mediator
shall have the authority to order the production of
evidence by any party and, to the extent necessary
properly to evaluate the case, may permit discovery
of nonparties and depositions of parties for good
cause shown.
‘‘(4) EVALUATION BY THE MEDIATOR.—
‘‘(A) IN GENERAL.—If, at the end of the
early evaluation procedure, the action has not
been voluntarily dismissed or settled, the medi-
ator shall evaluate the action as being:
‘‘(i) clearly frivolous, such that it can
only be further maintained in bad faith; or
‘‘(ii) clearly meritorious, such that it
can only be further defended in bad faith;
or
‘‘(iii) described by neither clause (i)
nor clause (ii) of this subparagraph.
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‘‘(B) WRITTEN
EVALUATION.—A written
evaluation with respect to the claims against
and defenses of each defendant shall be issued
within 10 days after the end of the early eval-
uation procedure and provided to the parties.
The evaluation shall not be admissible in the
action.
‘‘(5) SANCTIONS.—If the action is evaluated
under paragraph (4)(A)(i) of this subsection and
final judgment is entered against the plaintiff, plain-
tiff or plaintiff’s counsel shall be liable to defendant
for sanctions as awarded by the court, if the court
agrees, based on the entire record, that the action
was frivolous when filed and maintained in bad
faith. If the action is evaluated under paragraph
(4)(A)(ii) of this subsection and final judgment is
entered against the defendant, defendant or defend-
ant’s counsel shall be liable to plaintiff for sanctions
as awarded by the court, if the court agrees, based
on the entire record, that the action was meritorious
and defended in bad faith.
‘‘(6) EXTENSION OF EARLY EVALUATION PE-
RIOD.—The period of the early evaluation procedure
may be extended by stipulation of all parties. At the
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conclusion of the period, the action shall proceed in
accordance with Federal Rules of Civil Procedure.
‘‘(7) FEES.—Each side shall bear equally the
reasonable fees and expenses of the mediator if he
is not a judicial officer.’’.
SEC. 103. RESTORATION OF AIDING AND ABETTING LIABIL-
ITY.
(a) SECURITIES ACT OF 1933.—Section 20 of the Se-
curities Act of 1933 (15 U.S.C. 77t) is amended by adding
at the end the following new subsection:
‘‘(f) PROSECUTION OF PERSONS WHO AID OR ABET
VIOLATIONS.—For purposes of subsections (b) and (d),
any person who knowingly or recklessly provides substan-
tial assistance to another person in the violation of a provi-
sion of this title, or of any rule or regulation hereunder,
shall be deemed to violate such provision to the same ex-
tent as the person to whom such assistance is provided.
No person shall be liable under this subsection based on
an omission or failure to act unless such omission or fail-
ure constituted a breach of a duty owed by such person.’’.
(b) SECURITIES EXCHANGE ACT OF 1934.—Section
20 of the Securities Exchange Act of 1934 (15 U.S.C. 78t)
is amended—
(1) by striking the heading of such section and
inserting the following:
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‘‘LIABILITY OF CONTROLLING PERSONS AND PERSONS
WHO AID OR ABET VIOLATIONS’’; and
(2) by adding at the end the following new sub-
section:
‘‘(e) PROSECUTION OF PERSONS WHO AID OR ABET
VIOLATIONS.—For purposes of subsections (d)(1) and
(d)(3) of section 21, or an action by a self-regulatory orga-
nization, or an express or implied private right of action
under this title, any person who knowingly or recklessly
provides substantial assistance to another person in the
violation of a provision of this title, or of any rule or regu-
lation thereunder, shall be deemed to violate such provi-
sion and shall be liable to the same extent as the person
to whom such assistance is provided. No person shall be
liable under this subsection based on an omission or fail-
ure to act unless such omission or failure constituted a
breach of a duty owed by such person.’’.
(c) INVESTMENT COMPANY ACT OF 1940.—Section
42 of the Investment Company Act of 1940 (15 U.S.C.
80a–41) is amended by adding at the end the following
new subsection:
‘‘(f) PROSECUTION OF PERSONS WHO AID OR ABET
VIOLATIONS.—For purposes of subsections (d) and (e),
any person who knowingly or recklessly provides substan-
tial assistance to another person in the violation of a provi-
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sion of this title, or of any rule, regulation, or order here-
under, shall be deemed to violate such provision to the
same extent as the person to whom such assistance is pro-
vided. No person shall be liable under this subsection
based on an omission or failure to act unless such omission
or failure constituted a breach of a duty owed by such
person.’’.
(d) INVESTMENT ADVISERS ACT OF 1940.—Section
209(d) of the Investment Advisers Act of 1940 (15 U.S.C.
80b–9) is amended—
(1) in subsection (d)—
(A) by striking ‘‘or that any person has
aided, abetted, counseled, commanded, induced,
or procured, is aiding, abetting, counseling,
commanding, inducing, or procuring, or is
about to aid, abet, counsel, command, induce,
or procure such a violation,’’; and
(B) by striking ‘‘or in aiding, abetting,
counseling, commanding, inducing, or procuring
any such act or practice’’; and
(2) by adding at the end the following new sub-
section:
‘‘(f) PROSECUTION OF PERSONS WHO AID OR ABET
VIOLATIONS.—For purposes of subsections (d) and (e),
any person who knowingly or recklessly provides substan-
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tial assistance to another person in the violation of a provi-
sion of this title, or of any rule, regulation, or order here-
under, shall be deemed to violate such provision to the
same extent as the person to whom such assistance is pro-
vided. No person shall be liable under this subsection
based on an omission or failure to act unless such omission
or failure constituted a breach of duty owed by such per-
son.’’.
SEC. 104. SAFE HARBOR FOR FORWARD-LOOKING STATE-
MENTS.
(a) RULEMAKING.—Not later than 12 months after
the enactment of this Act, the Commission shall adopt
rules with respect to forward-looking statements concern-
ing the future economic performance of an issuer of secu-
rities registered under section 12 of the Act. Such rules
shall specify—
(1) the criteria the Commission determines to
be necessary and appropriate in the public interest
and for the protection of investors by which forward-
looking statements concerning the future economic
performance of an issuer of securities registered
under section 12 of the Act will be deemed not to
be in violation of section 10(b) of the Act; and
(2) the limits to liability for forward-looking
statements, and how such rules shall incorporate
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and reflect the scienter requirements applicable to
implied private actions under section 10(b).
(b) REPORT.—Within 30 days following adoption of
the rules described in subsection (a), the Commission shall
submit a report to the House Committee on Commerce
and the Senate Committee on Banking describing the
rules the Commission has prescribed pursuant to sub-
section (a). Such report shall also—
(1) describe the procedures which shall be fol-
lowed for making a summary determination of the
applicability of any Commission rule for forward-
looking statements early in a judicial proceeding to
limit litigation and discovery and for promoting
timely dismissal of claims against such issuers of se-
curities based on such forward-looking statements if
such statements are in accordance with any rules
and regulations adopted by the Commission;
(2) what steps the Commission is undertaking
to provide clear guidance to issuers of securities and
the judiciary regarding the rules prescribed pursuant
to subsection (a); and
(3) any legislative recommendations relating to
forward-looking statements which the Commission
determines to be appropriate.
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(c) SECURITIES EXCHANGE ACT AMENDMENT.—The
Securities and Exchange Act of 1934 (15 U.S.C. 78a et
seq.), is amended by adding at the end the following new
section:
‘‘SEC. 40. APPLICATION OF SAFE HARBOR FOR FORWARD-
LOOKING STATEMENTS.
‘‘(a) IN GENERAL.—In any implied private action
arising under this title that alleges that a forward-looking
statement concerning the future economic performance of
an issuer registered under section 12 was materially false
or misleading, if a party making a motion in accordance
with subsection (b) requests a stay of discovery concerning
the claims or defenses related to such statement of that
party, the court shall grant such a stay until it has ruled
on any such motion.
‘‘(b) SUMMARY JUDGMENT MOTIONS.—Subsection
(a) shall apply to any motion for summary judgment made
by a defendant asserting that the forward-looking state-
ment was within the coverage of any rule which the Com-
mission may have adopted concerning such predictive
statements, if such motion is made not less than 60 days
after the plaintiff commences discovery in the action.
‘‘(c) DILATORY CONDUCT; DUPLICATIVE DISCOV-
ERY.—Notwithstanding subsection (a) or (b), the time
permitted for a plaintiff to conduct discovery under sub-
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section (b) may be extended, or a stay of the proceedings
may be denied, if the court finds that—
‘‘(1) the defendant making a motion described
in subsection (b) engaged in dilatory or obstructive
conduct in taking or opposing any discovery; or
‘‘(2) a stay of discovery pending a ruling on a
motion under subsection (b) would be substantially
unfair to the plaintiff or other parties to the ac-
tion.’’.
SEC. 105. LIMITATIONS PERIOD FOR IMPLIED PRIVATE
RIGHTS OF ACTION.
The Securities Exchange Act of 1934 (15 U.S.C. 78a
et seq.) is amended by adding at the end the following
new section:
‘‘SEC. 37. LIMITATIONS PERIOD FOR IMPLIED PRIVATE
RIGHTS OF ACTION.
‘‘(a) IN GENERAL.—Except as otherwise provided in
this title, an implied private right of action arising under
this title shall be brought not later than the earlier of—
‘‘(1) 5 years after the date on which the alleged
violation occurred; or
‘‘(2) 3 years after the date on which the alleged
violation was discovered.
‘‘(b) EFFECTIVE DATE.—The limitations period pro-
vided by this section shall apply to all proceedings pending
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on or commenced after the date of enactment of this sec-
tion.’’.
SEC. 106. FINANCIAL FRAUD DETECTION AND DISCLOSURE.
(a) AMENDMENTS TO THE SECURITIES EXCHANGE
ACT OF 1934.—The Securities Exchange Act of 1934 is
amended by inserting after section 13 (15 U.S.C. 78m)
the following new section:
‘‘SEC. 13A. FRAUD DETECTION AND DISCLOSURE.
‘‘(a) AUDIT REQUIREMENTS.—Each audit required
pursuant to this title of an issuer’s financial statements
by an independent public accountant shall include, in ac-
cordance with generally accepted auditing standards, as
may be modified or supplemented from time to time by
the Commission, the following:
‘‘(1) procedures designed to provide reasonable
assurance of detecting illegal acts that would have a
direct and material effect on the determination of fi-
nancial statement amounts;
‘‘(2) procedures designed to identify related
party transactions which are material to the finan-
cial statements or otherwise require disclosure there-
in; and
‘‘(3) an evaluation of whether there is substan-
tial doubt about the issuer’s ability to continue as a
going concern over the ensuing fiscal year.