Posted on 08/02/2002 4:36:26 AM PDT by GotDangGenius
The Clinton corporate ponzi scheme has cost America dearly.
It was in the 90s that Clinton, working with Democrat Senator Dodd (Conn.) passed legislation that relaxed accounting standards for accounting firms. As the no earnings dot.com stocks went public, CEOs and accountants warned the administration that while it was politically difficult to hold corporations to account for cooking the books under the Clinton Administrations lax enforcement of accounting practices and SEC filings, the bubble would one day burst when fund managers and investment banks learned that the inflated stock market was based on nothing but fluff- that the stocks werent worth the going price, that earnings were being hidden and would continue to be hidden- they warned the Clinton Administration that the market, especially the new economy stocks were in reality a house of cards because of the Administrations acquiescence in relaxing accounting standards under the Dodd legislation.
When the Bush Administration took power, it quietly signaled to Wall Street insiders that the ponzi scheme was no longer acceptable- that it was not fair or good for the long term economic health of the nation to allow the continuation of the Clinton Administration's corporate ponzi scheme under the Dodd Act would have come to light without the Bush Administration signaling tough enforcement of accurate accounting reporting standards. Sooner or later the lone voices crying in the wilderness who had warned the Clinton Administration of exactly these results if the Dodd bill were to be enacted, were suddenly and abruptly the responsible analysts as brokers and investment banks began asking for the "real earnings" numbers of corporations and not the "Clinton numbers" that allowed corporate malfeasance.
How many times in the 90s did we hear analysts say What on earth is this stock price based on trading at 100 times earnings when there are no standard accounting earnings that the public can actually see or accurately rely on to make sound investment decisions.? When that occurred, the Clinton Administration tried to shut them up- literally. The SEC started investigating brokers who were calling the Clinton Administration to the mat on relaxing the accounting standards. It was like sicking the IRS on a rouge Congressperson- something the Clinton Administration was adept at- just shut them up was the Clinton reaction, with calculating consistency.
So, here we sit, like after a party where you have a horrible hangover and say- Well, it was fun while it lasted and we should have left earlier, but we didnt and now we pay the price.
That seems to be the legacy of the Clintons through and through screw the public so the party is seen as having good hosts. Sure there were some great chips and dip, but man does not live on potato chips alone.
...and the Clintons even tried to steal the publics silverware when the party was over
Imagine that.
And the dems already have no compunction about blaming this latest series of WorldComs,Enrons, etc., on republicans.
So I say hit the Clintons with both barrels on this. Give those geese a littler tit for tat.
Anybody know any specifics, like what legislation and when it passed?
A few more years of playing this good cop-bad cop game and we won't have a nation left to worry about
I was thinking about the same thing earlier today. Follow along. Every person loves a hero. But in order to have a hero there is one unavoidable prerequisite. ... A villain. In politics, party loyalists are the heroes of their party and the opposing party loyalists are the villains. For both parties, sometimes they win, other times they lose.
In a politicized society the back and forth hero-villain relationship is secondary. In a politicized society the real hero is government and the real villain is the citizen and their employers/businesses.
However, whether it's a politicized society or a free market society the only real, valid heroes are the creative market entrepreneurs and their productive working-class employees. Neither a politicized society or a market society could prosper let alone survive without job-creating market entrepreneurs and productive working glass.
To the extent that politicians and bureaucrats -- aided by a complicit media and academia -- have been allowed to politicize society is the extent that job-creating entrepreneurs and a productive working class people have permitted themselves and the fruits of their labor to be sacrificed to support parasitical politicians and self-serving bureaucrats.
It's long overdue that we drive a separating wedge between the real valid, heroes and the compassion hoaxing villains.
When I was a kid a friend's father, Mr. Brown used to jokingly say to us neighborhood kids, "Which do you want, a fat lip or a busted eyebrow?" That was not lost on me. From Democrats you get one, from Republicans you get the other. Voting for the lesser of evils still begets evil.
Stop playing by their rules. Stop playing their Hobson's choice "game". Stop voting against yourself. Politics is not the answer, it's the problem.
In a show of bipartisan support by the end of 1995, both the U.S. House of Representatives and the Senate overrode a presidential veto to pass the Congressional conference committee's report on H.R.1058, a long-sought measure to favorably reform the laws governing federal class action lawsuits in securities cases. The AICPA and the leadership of many state societies were actively engaged in this multi-year effort, working closely with member volunteers and the Accountants Coalition, a group formed by the six largest CPA firms, to help achieve the profession's liability reform goals.
The conference report on H.R.1058 was a blended version of the Securities Litigation Reform Act of 1995 (H.R.1058) and The Private Securities Reform Act of '95 (S.240) which overwhelmingly passed each respective house of Congress in the first half of 1995.
Summary of H.R.1058 Provisions
<> Establishes Proportionate Liability: Joint and several liability is retained only for those who engage in "knowing" securities fraud. Defendants whose liability is premised on lesser grounds-that is, recklessness-would be responsible only for their proportionate share of the damages. The legal standard for recklessness is established.
<> Prevents Abusive Practices: Bounty payments to named plaintiffs are eliminated, "professional plaintiffs" are limited to five class-actions every three years, and plaintiff referral fees are banned. Attorneys owning securities at issue in a case are prohibited from participating in a suit.
<> Creates a Safe-Harbor: A safe-harbor for forward-looking statements is established that will encourage the voluntary disclosure of more information to investors.
<> Increases Investors' Control Over Cases: Court appointed guardians or plaintiffs' steering committees are established to ensure that plaintiffs, and not their lawyers, control 10(b)5 class action lawsuits. Settlement terms must be disclosed to class members so that they are fully informed about proposed settlements and can raise questions or objections.
<> Provides for Awards of Attorneys' Fees: At the court's discretion, the losing party can be required to pay the prevailing party's attorneys' fees if the court finds thatthe party's position was not substantially justified. The burden of proof is on the prevailing party.
<> Requires Lawyers to Plead Specific Facts: Plaintiffs must allege specific facts in their complaint demonstrating the state of mind of each defendant at the time the alleged violation occurred, and must specify each statement made by the defendant alleged to have been misleading.
<> Adopts "Fraud on the Market" Theory: Writes into law the current "fraud on the market" theory as a means of proving reliance. Plaintiffs must prove that the market as a whole was defrauded by a company's illegal statement, and that the fraudulent information was reflected in the price of the stock. Eliminates "fraud on the market" in thinly-traded markets-markets in which the price of the stock does not reflect the illegal statements.
<>Codifies Current SEC Fraud and Disclosure Requirements: Requires rapid notification by public auditors to the SEC of illegal acts that have not been properly addressed by management. This provision is based on the "Wyden bill." The Reform Act puts into law certain aspects of GAAS and gives the SEC the authority to modify them.
<> Prohibits Use of RICO: Violations of 10(b)5 cannot serve as the basis for an action under the Racketeer Influenced and Corrupt Organizations (RICO) Act.
Pick up a companys annual report or earnings statement these days and chances are good youll see a disclaimer like this one, by Humana: "This release contains forward looking information ... statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995."
These disclaimers are a signal to the investor that the company cant be held liable for predictions it makes about future earnings. They are also one of the most visible results of the new securities litigation reform bill passed by the 104th Congress. The bill gave companies a "safe harbor" from liability as long as they make these disclaimers, and contained other provisions designed to discourage lawsuits by unhappy investors.
Meanwhile, its clear that the accounting, securities, and high-tech industries count the new law as a big win. Burned by lawsuits that investors filed as a result of the S&L crisis of the 1980s, the "Big Six" accounting firms, represented by the American Institute of Certified Public Accountants, and securities firms, represented by the Securities Industry Association, pushed for six years to get the legislation. On the other side were trial lawyers, whose clients include disgruntled investors, as well as groups such as Consumers Union and state and local governments. They argued that the courts provide wronged investors with a way to hold companies responsible for fraud. They cite such events as Orange Countys 1994 bankruptcy as a case in point. In that case, several lawsuits were filed against Merrill Lynch, which had invested county funds in risky derivatives.
Trial lawyers are generous campaign contributors, but the money trail is difficult to follow since they tend to give through large individual contributions rather than PACs. One of the most identifiable trial lawyers who lobbied against securities litigation reform is William Lerach, a partner with Milberg, Weiss, Bershad, Haynes & Lerach. The firm is involved in about one quarter of all securities class action suits filed in the U.S., and earned an estimated $75 million from lawsuit settlements in 1994.(23) Lerach, his wife, and the firms employees gave more than $550,000 to federal candidates and national parties during the 1996 election cycle.
After Congress passed securities litigation reform, Lerach turned his lobbying fight to California, where he organized a ballot initiative, Proposition 211. The initiative proposed to undo many of the new federal standards for investors filing lawsuits in the state of California. By election time, trial lawyers reportedly had spent $12 million, of which $4.4 million came from Lerachs firm, Milberg, Weiss. Opponents had meantime spent $36 million, including more than $500,000 from the nations stock exchanges and $3 million from the "Big Six" accounting firms.(24) These amounts, which are not even the final numbers, make the initiative Californias most expensive in history. In November 1996, Californians voted against the initiative, 74 percent to 26 percent.
Sen. Christopher J. Dodd (D-Conn) wont be up for reelection until November 1998, but hes already cashing in on championing the new securities litigation reform law. "During the battle that led to the passage of the Private Securities Litigation Reform Act last year, Sen. Chris Dodd stood as the Senates foremost supporter of the bill. Now he needs our help," reads a letter from Benjamin M. Vandegrift, the lobbyist for the Securities Litigation Reform Coalition. Vandegrift himself gave $500 to Dodd in May 1995.
Action. The Securities Litigation Reform Act became Public Law No. 104-67 on Dec. 22, 1995. President Clinton had vetoed the bill on Dec. 19, 1995, but Congress overrode his veto.
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