ROANOKE TIMES
Copyright (c) 1995, Roanoke Times
DATE: Saturday, December 23, 1995 TAG: 9512250033
SECTION: BUSINESS PAGE: A-8 EDITION: METRO
DATELINE: WASHINGTON
SOURCE: Associated Press|
Overriding President Clinton's veto for the first time, Congress enacted legislation Friday limiting stockholders' ability to sue for fraud.
The measure, which alters rules put in place during the Great Depression to discourage stock manipulation, became law after the Senate voted 68-30 to overcome Clinton's veto.
Twenty Senate Democrats joined 48 Republicans to muster more than the two-thirds required to buck the president. The House took the same action Wednesday by a lopsided 319-100 margin that included 89 Democrats.
A coalition of accounting firms, high-technology companies and stockbrokers said the measure will help eliminate frivolous lawsuits. But opponents, including consumer groups, lawyers and managers of state pension funds, said small investors will suffer.
Despite the charged politics surrounding the debate - Clinton's critics accused him of aiding big-donor trial lawyers - some analysts said the measure's impact has been overstated.
``Consumers have a misperception of what's going on. The bill still keeps companies on their toes,'' said David Keyko, a New York City lawyer who supports the law.
The measure was condemned by Ralph Nader, who called it a victory for ``crooks and swindlers'' and said it would make it more difficult, if not impossible. for many genuine lawsuits to prevail.
The measure will:
Make it easier for a company to defend against a lawsuit when the company fails to live up to optimistic projections.
Limit attorney fees and permit the award of fees and costs to the winning party in the event of a meritless or frivolous suit.
Bar a plaintiff who alleges fraud from recovering damages unrelated to the fraud.
Give judges power to sanction attorneys who make court filings the judges deem frivolous, and prohibit individuals being named in more than five class-action suits in a three-year period.
The White House expressed only mild disappointment and said that Clinton supports reforms to reduce meritless lawsuits.
The president ``hopes that the unintended effects of the legislation actually do not occur and, if they do, that Congress will act to make some of the very narrow corrections they will have to make,'' said White House spokeswoman Mary Ellen Glynn.
LENGTH: Medium: 57 linesby CNB