Securities Litigation Uniform Standards Resolution Exposed
The Securities Litigation Uniform Standards Resolution does not include adoption or approval information. ALEC has attempted to distance itself from this piece of legislation after the launch of ALECexposed.org in 2011, but it has done nothing to get it repealed in the states where it previously pushed for it to be made into law.
ALEC Resolution Text
ALEC’s Model Securities Litigation Uniform Standards Resolution recognizes that public companies that trade stock on national securities markets are engaging in interstate commerce and that US. capital markets and investors would benefit from uniform standards governing securities class action litigation involving nationally-traded securities.
WHEREAS, securities fraud class actions have implications for national securities markets and directly affect interstate commerce;
WHEREAS, securities fraud class actions that were traditionally brought in federal court under federal laws are now being brought in state court under state law, thus circumventing the anti-abuse provisions of the Private Securities Litigation Reform Act;
WHEREAS, public companies are reluctant to disclose forward-looking information to investors for fear of being sued in state court under state law;
WHEREAS, the lack of securities litigation uniform standards harms America’s economy, particularly job-creating, growth and high-technology companies.
WHEREAS, individual state legislation has been able to address only a small portion of this problem because securities flow in interstate commerce, and various state legislative schemes offer conflicting standards of liability and cannot give nationwide predictability and protections to issuers and investors.
WHEREAS, the securities laws of most states already recognize that nationally-traded securities should be protected from conflicting state civil liability standards, and/or should be exempt from state blue sky registration or qualification requirements.
THEREFORE, BE IT RESOLVED that it is the sense of this legislature that reasonable, fair, and balanced federal securities litigation legislation should be enacted; that, in enacting such legislation, representatives of the federal legislature should cooperate with representatives of the state legislatures; that the state legislature should work with the Congress to prevent state courts from being improperly utilized to circumvent the goals and principles of the Private Securities Litigation Reform Act, including delegating to the federal legislature the power to regulate private securities litigation in state court involving issues of nationally traded securities; and that federal legislation should subject all such issuers to uniform national standards for securities class action litigation, maintain the authority of state officials to hiring securities enforcement actions, and provide for the removal of securities fraud class actions involving nationally-traded securities brought in state court to federal court.