,i  #aae? ,,congress  #b;d ,session  ,h4
 ,r4 #ejcg  ,,9 ,,! ,,h\se ,,(          
,,repres5tatives  ,febru>y #ae1         
#bjah,mr4 ,mac,arthur 7= himself1 ,mr4  
,davidson1 ,ms4 ,t5ney1 & ,mr4          
,mc,henry7 introduc$ ! foll[+ bill2 :i* 
0 ref]r$ to ! ,committee on ,f9ancial   
,s]vices  ,a ,,bill  ,to provide =      
exclusive ,f$]al jurisdiction ov] civil 
securities fraud actions1 & = o!r       
purposes4  #a4 ,%ort title ,?is ,act may
 be cit$ z ! ,securities ,fraud ,act (  
#bjah4  #b4 ,f9d+s ,congress f9ds !     
foll[+3  7#a7 ,companies engag$ 9       
int]/ate comm]ce & publicly trad$ on    
national ex*anges face unique *all5ges1 
op]at+ (t5 9 e ,unit$ ,/ates            
jurisdiction1 "u a v>iety ( civil       
securities fraud /atutes 7blue sky laws7
 t c ov]lap or contradict ea* o!r &     
,f$]al law4  7#b7 ,civil & crim9al fraud
 h inh]5t diff]5ces 9 affect & burd5 (  
pro(4 ,/ates h a unique int]e/ 9        
prosecut+ crim9al fraud t %\ld be       
ma9ta9$4  7#c7 ,impos+ diff]+ ,/ate     

regulatory requirem5ts = civil          
securities fraud on national m>kets     
increases risk1 creates ineffici5cies1  
raises co/s1 & c h>m ! effici5t op]ation
 ( ^! critical m>kets1 )\t provid+      
mat]ial inve/or protection b5efits4     
7#d7 ,comply+ ) dual regulatory regimes 
places ,am]ica's public companies at a  
unique competitive disadvantage 9 an    
increas+ global m>ketplace4  7#e7       
,reputational risk = ,unit$ ,/ates      
publicly trad$ companies accus$ ( civil 
fraud 9 ,/ate civil en=cem5t actions1   
(t5 bas$ on ,/ate law /&>ds t diff] f   
,f$]al law t o!rwise gov]ns ^! national 
m>kets1 c cause imm$iate & irrep>able   
f9ancial h>m to %>ehold]s & unnecess>y  
loss ( jobs1 ev5 aft] su* allegations   
are lat] f\nd to be baseless4  7#f7 ,z (
 ,june #bjag1 !re 7 #e1gcd public       
companies1 little m ?an 9 #aihb1 :5 !   
economy 0 less ?an half its curr5t size4
 ,! lack ( a uni=m /&>d = public        
companies is a contribut+ factor to !   
decl9+ int]e/ 9 ! ,unit$ ,/ates public  

m>ket1 h>m+ ! ,unit$ ,/ates economy &   
r$uc+ inve/m5t opportunities = ! ,unit$ 
,/ates public4  7#g7 ,! ,comm]ce        
,clause1 f\nd 9 article ,i1 section #h1 
clause #c ( ! ,con/itution1 explicitly  
/ates t ! ,unit$ ,/ates ,congress %all h
 p[] ,to regulate ,comm]ce ) =eign      
,nations1 & among ! sev]al ,/ates1 & ) !
 ,indian ,tribes4 ,int]/ate ,comm]ce is 
an explicitly ,f$]al responsibility1 &  
companies actively engag+ 9 comm]ce     
across ,/ate l9es & rais+ capital on    
national m>kets %\ld be prim>ily        
regulat$ by ! ,f$]al ,gov]nm5t's uni=m  
anti-fraud /&>d4  7#h7 ,9 ! pa/1        
,congress has ex]cis$ ?is au?ority 9    
reg>ds to ,/ate securities preemption ) 
bo? ! ,private ,securities ,litigation  
,re=m ,act 7,,pslra71 :i* 0 design$ to  
curb abusive ,f$]al class actions       
7,public ,law #ajd-fg71 & ! ,national   
,securities ,m>kets ,improvem5ts ,act   
7,,nsmia7 to ensure t ,/ates c\ld n     
impose _! own views ( :at %\ld or %\ld n
 be includ$ 9 regi/ration /atem5ts fil$ 

9 connection ) nationally trad$         
securities 7,public ,law #ajd-bij74     
7#i7 ,x is 9 ! public int]e/ to e/abli% 
preemption ( ,f$]al regulators & c\rts  
ov] civil securities fraud1 elim9at+    
concurr5t ,f$]al & ,/ate jurisdiction   
ov] ! specific companies cov]$ by ?is   
,act4  #c4 ,f$]al jurisdiction ov]      
securities fraud  7a7 ,securities       
,ex*ange ,act ( #aicd ,! ,securities    
,ex*ange ,act ( #aicd is am5d$ by ins]t+
 aft] section #ba;,f 7#ae ,u4,s4,c4     
#ghu-#f7 ! foll[+3  #ba;,g4 ,f$]al      
jurisdiction ov] securities fraud  7a7  
,9 g5]al ,no law1 rule1 regulation1     
judgm5t1 agreem5t1 ord]1 or o!r action (
 any ,/ate or political subdivision     
!re(1 %all regulate securities fraud )  
respect to an issu]4  7b7 ,actions      
br\ght exclusively 9 ,f$]al c\rt ,!     
di/rict c\rts ( ! ,unit$ ,/ates %all h  
orig9al & exclusive jurisdiction ov] any
 civil action alleg+ securities fraud ) 
respect to an issu]1 & any su* action   
br\ght 9 any ,/ate c\rt %all be         

removable to ! ,f$]al di/rict c\rt = !  
di/rict 9 :i* ! action is p5d+4  7c7    
,pres]vation ( ,/ate au?ority ,consi/5t 
) ?is section1 ! securities commission  
7or ag5cy or (fice p]=m+ l functions7 ( 
any ,/ate %all reta9 jurisdiction "u !  
laws ( su* ,/ate to inve/igate & br+--  
7#a7 civil en=cem5t actions ) respect to
 fraud or deceit1 or unlawful conduct 9 
connection ) securities or securities   
transactions o!r ?an 9 connection ) a   
cov]$ security or transactions ( a cov]$
 security2 &  7#b7 crim9al en=cem5t     
actions ) respect to fraud or deceit1 or
 unlawful conduct 9 connection ) a cov]$
 security or transactions ( a cov]$     
security provid$ su* ,/ate crim9al      
en=cem5t actions %all comply 9 all      
respects ) ! legal requirem5ts =        
securities fraud "u ,f$]al law4  7d7    
,effect ,^! provisions %all be effective
 not)/&+ any o!r provision ( law & %all 
sup]s$e any previ\sly enact$ conflict+  
provisions4  7e7 ,def9itions ,9 ?is     
section-- 7#a7 ,securities fraud ,! t]m 

securities fraud means any              
misrepres5tation1 omission1 or          
manipulative or deceptive conduct kn[+ly
 or unkn[+ly made or engag$ 9 connection
 ) a cov]$ security or transaction ( a  
cov]$ security4  7#b7 ,cov]$ security ,a
 security is a cov]$ security if su*    
security is-- 7,a7 7i7 li/$1 or au?oriz$
 = li/+1 on ! ,new ,york ,/ock ,ex*ange 
or ! ,national ,m>ket ,sy/em ( ! ,nasdaq
 ,/ock ,m>ket 7or any successor to su*  
entities72  7ii7 li/$1 or au?oriz$ =    
li/+1 on a national securities ex*ange  
7or ti] or segm5t !re(7 t has li/+ /&>ds
 t ! ,commission det]m9es by rule 7on   
its own initiative or on ! basis ( a    
petition7 are sub/antially simil> to !  
li/+ /&>ds applicable to securities     
describ$ 9 subp>agraph 7,a72 or  7iii7 a
 security ( ! same issu] t is equal 9   
s5iority or t is a s5ior security to a  
security describ$ 9 subp>agraph 7,a7 or 
7,b72 &  7,b7 issu$ by a company engag$ 
9 int]/ate comm]ce4  4  7b7 ,securities 
,act ( #aicc ,! ,securities ,act ( #aicc

 is am5d$ by ins]t+ aft] section #bh    
7#ae ,u4,s4,c4 #ggz-#c7 ! foll[+ new    
section3  #bi4 ,f$]al jurisdiction ov]  
securities fraud  7a7 ,9 g5]al ,no law1 
rule1 regulation1 judgm5t1 agreem5t1    
ord]1 or o!r action ( any ,/ate or      
political subdivision !re(1 %all        
regulate securities fraud ) respect to  
an issu]4  7b7 ,actions br\ght          
exclusively 9 ,f$]al c\rt ,! di/rict    
c\rts ( ! ,unit$ ,/ates %all h orig9al &
 exclusive jurisdiction ov] any civil   
action alleg+ securities fraud ) respect
 to an issu]1 & any su* action br\ght 9 
any ,/ate c\rt %all be removable to !   
,f$]al di/rict c\rt = ! di/rict 9 :i* ! 
action is p5d+4  7c7 ,pres]vation (     
,/ate au?ority ,consi/5t ) ?is section1 
! securities commission 7or ag5cy or    
(fice p]=m+ l functions7 ( any ,/ate    
%all reta9 jurisdiction "u ! laws ( su* 
,/ate to inve/igate & br+--  7#a7 civil 
en=cem5t actions ) respect to fraud or  
deceit1 or unlawful conduct 9 connection
 ) securities or securities transactions

 o!r ?an 9 connection ) a cov]$ security
 or transactions ( a cov]$ security2 &  
7#b7 crim9al en=cem5t actions ) respect 
to fraud or deceit1 or unlawful conduct 
9 connection ) a cov]$ security or      
transactions ( a cov]$ security provid$ 
su* ,/ate crim9al en=cem5t actions %all 
comply 9 all respects ) ! legal         
requirem5ts = securities fraud "u ,f$]al
 law4  7d7 ,effect ,^! provisions %all  
be effective not)/&+ any o!r provision (
 law & %all sup]s$e any previ\sly enact$
 conflict+ provisions4  7e7 ,def9itions 
,9 ?is section-- 7#a7 ,securities fraud 
,! t]m securities fraud means any       
misrepres5tation1 omission1 or          
manipulative or deceptive conduct kn[+ly
 or unkn[+ly made or engag$ 9 connection
 ) a cov]$ security or transaction ( a  
cov]$ security4  7#b7 ,cov]$ security ,a
 security is a cov]$ security if su*    
security is-- 7,a7 7i7 li/$1 or au?oriz$
 = li/+1 on ! ,new ,york ,/ock ,ex*ange 
or ! ,national ,m>ket ,sy/em ( ! ,nasdaq
 ,/ock ,m>ket 7or any successor to su*  

entities72  7ii7 li/$1 or au?oriz$ =    
li/+1 on a national securities ex*ange  
7or ti] or segm5t !re(7 t has li/+ /&>ds
 t ! ,commission det]m9es by rule 7on   
its own initiative or on ! basis ( a    
petition7 are sub/antially simil> to !  
li/+ /&>ds applicable to securities     
describ$ 9 subp>agraph 7,a72 or  7iii7 a
 security ( ! same issu] t is equal 9   
s5iority or t is a s5ior security to a  
security describ$ 9 subp>agraph 7,a7 or 
7,b72 &  7,b7 issu$ by a company engag$ 
9 int]/ate comm]ce4  4