Federal Laws Addressing Liability

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Private Securities Litigation Reform Act of 1995

The Private Securities Litigation Reform Act of 1995, Pub. L. No. 104-67, placed limits on private lawsuits brought under the Securities Act of 1933 and the Securities Exchange Act of 1934. Investors' securities-fraud lawsuits against public companies and accounting firms were deterring companies from voluntarily disclosing information to their investors or shareholders. Additionally, these suits were resulting in loss of productivity and jobs. The legislation was vetoed by President Clinton and passed on a veto override.