Can Congress protect investors?James Chanos, head of a leading New York short-selling firm, testified to a House committee last February that the 1995 Securities Litigation Reform Act, which shields companies from certain stockholder lawsuits, “has probably harmed more investors than any other piece of recent legislation. That statute, in my opinion, has emboldened dishonest managements to lie with impunity, by relieving them of concern that those to whom they lie will have legal recourse.”
Urged on by computer, biotech and other firms, Congress enacted the law by bipartisan margins in both houses, over-riding President Clinton’s veto.
"White House spokesman Michael McCurry neatly summed up the president's dilemma when he said, "Some of our friends support this [the bill] and some of our friends oppose it; and we will stand by our friends."
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