,,ii #aaeth ,,congress #b;d ,session ,s4 #cdba ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,september #f1 #bjah,mr4 ,perdue introduced the following bill2 which was read twice and referred to the ,committee on the ,judiciary ,a ,,bill ,to provide for exclusive ,federal jurisdiction over certain civil securities fraud actions1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,blue ,sky ,harmonization ,act4 #b4 ,findings ,congress finds the following3 7#a7 ,companies that are engaged in interstate commerce and publicly traded on national exchanges face unique challenges1 often operating in every ,united ,states jurisdiction under a variety of civil securities fraud statutes 7commonly known as blue sky laws7 that can overlap or contradict each other and ,federal law4 7#b7 ,civil and criminal fraud have inherent differences in affect and burden of proof4 ,states have a unique interest in prosecuting criminal fraud that should be maintained4 7#c7 ,imposing differing ,state regulatory requirements for civil securities fraud on national markets increases risk1 creates inefficiencies1 raises costs1 and can harm the efficient operation of those critical markets without providing material investor protection benefits4 7#d7 ,complying with dual regulatory regimes places public companies in the ,united ,states at a unique competitive disadvantage in an increasingly global marketplace4 7#e7 ,reputational risk for ,united ,states publicly traded companies accused of civil fraud in ,state civil enforcement actions1 often based on ,state law standards that differ from ,federal law that otherwise governs those national markets1 can cause immediate and irreparable financial harm to shareholders and an unnecessary loss of jobs1 even after those allegations are later found to be baseless4 7#f7 ,as of ,june #bjag1 there were #e1gcd public companies in the ,united ,states1 few more than in #aihb1 when the economy of the ,united ,states was less than #a_/b of its size as of the date of enactment of this ,act4 ,the lack of a uniform standard for public companies is a contributing factor to the declining interest in the ,united ,states public market1 harming the economy of the ,united ,states and reducing investment opportunities for the public in the ,united ,states4 7#g7 ,article ,i1 section #h1 clause #c of the ,constitution of the ,united ,states 7commonly known as the ,commerce ,clause7 explicitly states that ,congress shall have power ,to regulate ,commerce with foreign ,nations1 and among the several ,states1 and with the ,indian ,tribes4 ,the regulation of interstate commerce is an explicitly ,federal responsibility and companies actively engaging in commerce across ,state lines and raising capital on national markets should be primarily regulated by the uniform anti-fraud standard of the ,federal ,government4 7#h7 ,in the past1 ,congress has exercised this authority in regards to ,state securities preemption with both the ,private ,securities ,litigation ,reform ,act of #aiie 7,public ,law #ajd-fg2 #aji ,stat4 #gcg71 which was designed to curb abusive ,federal class actions1 and the ,national ,securities ,markets ,improvement ,act of #aiif 7,public ,law #ajd-bij2 #aaj ,stat4 #cdaf7 to ensure that ,states could not impose their own views of what should or should not be included in registration statements filed in connection with nationally traded securities4 7#i7 ,it is in the public interest to establish preemption of ,federal regulators and courts over civil securities fraud1 eliminating concurrent ,federal and ,state jurisdiction over the specific companies covered by this ,act4 #c4 ,federal jurisdiction over securities fraud 7a7 ,securities ,exchange ,act of #aicd ,the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gh;a et seq47 is amended by inserting after section #ba;,f 7#ae ,u4,s4,c4 #ghu-#f7 the following3 #ba;,g4 ,federal jurisdiction over securities fraud 7a7 ,definitions ,in this section3 7#a7 ,covered security ,the term covered security means a security that is-- 7,a7 7i7 listed1 or authorized for listing1 on the ,new ,york ,stock ,exchange or the ,national ,market ,system of the ,nasdaq ,stock ,market 7or any successor to either such entity72 7ii7 listed1 or authorized for listing1 on a national securities exchange 7or a tier or segment of a national securities exchange7 that has listing standards that the ,commission determines by rule 7upon its own initiative or upon the basis of a petition7 are substantially similar to the listing standards applicable to a security described in clause 7i72 or 7iii7 a security of the same issuer that is equal in seniority1 or that is a senior security1 to a security described in clause 7i7 or 7ii72 and 7,b7 issued by a company that is engaged in interstate commerce4 7#b7 ,securities fraud ,the term securities fraud means any misrepresentation1 omission1 or manipulative or deceptive conduct knowingly or unknowingly made or engaged in in connection with a covered security or transaction of a covered security4 7b7 ,preemption ,no law1 rule1 regulation1 judgment1 agreement1 order1 or other action of any ,state1 or political subdivision of a ,state1 may regulate securities fraud with respect to an issuer4 7c7 ,original jurisdiction for ,federal courts ,the district courts of the ,united ,states shall have original jurisdiction over any civil action alleging securities fraud with respect to an issuer and any such action brought in any ,state court may be removed to the ,federal district court for the district in which the action is pending4 7d7 ,preservation of ,state authority ,consistent with this section1 the securities commission 7or agency or office performing like functions7 of any ,state shall retain jurisdiction under the laws of that ,state to investigate and bring-- 7#a7 a civil enforcement action with respect to fraud1 deceit1 or unlawful conduct in connection with securities or securities transactions other than in connection with a covered security or transactions of a covered security2 and 7#b7 a criminal enforcement action with respect to fraud1 deceit1 or unlawful conduct in connection with a covered security or transactions of a covered security if that enforcement action complies in all respects with the legal requirements for securities fraud under ,federal law4 7e7 ,effect ,this section shall be effective notwithstanding any other provision of law and shall supersede any previously enacted conflicting provision4 4 7b7 ,securities ,act of #aicc ,the ,securities ,act of #aicc 7#ae ,u4,s4,c4 #gg;a et seq47 is amended by inserting after section #bh 7#ae ,u4,s4,c4 #ggz-#c7 the following3 #bi4 ,federal jurisdiction over securities fraud 7a7 ,definitions ,in this section3 7#a7 ,covered security ,the term covered security means a security that is-- 7,a7 7i7 listed1 or authorized for listing1 on the ,new ,york ,stock ,exchange or the ,national ,market ,system of the ,nasdaq ,stock ,market 7or any successor to either such entity72 7ii7 listed1 or authorized for listing1 on a national securities exchange 7or a tier or segment of a national securities exchange7 that has listing standards that the ,commission determines by rule 7upon its own initiative or upon the basis of a petition7 are substantially similar to the listing standards applicable to a security described in clause 7i72 or 7iii7 a security of the same issuer that is equal in seniority1 or that is a senior security1 to a security described in clause 7i7 or 7ii72 and 7,b7 issued by a company that is engaged in interstate commerce4 7#b7 ,securities fraud ,the term securities fraud means any misrepresentation1 omission1 or manipulative or deceptive conduct knowingly or unknowingly made or engaged in in connection with a covered security or transaction of a covered security4 7b7 ,preemption ,no law1 rule1 regulation1 judgment1 agreement1 order1 or other action of any ,state1 or political subdivision of a ,state1 may regulate securities fraud with respect to an issuer4 7c7 ,original jurisdiction for ,federal courts ,the district courts of the ,united ,states shall have original jurisdiction over any civil action alleging securities fraud with respect to an issuer and any such action brought in any ,state court may be removed to the ,federal district court for the district in which the action is pending4 7d7 ,preservation of ,state authority ,consistent with this section1 the securities commission 7or agency or office performing like functions7 of any ,state shall retain jurisdiction under the laws of that ,state to investigate and bring-- 7#a7 a civil enforcement action with respect to fraud1 deceit1 or unlawful conduct in connection with securities or securities transactions other than in connection with a covered security or transactions of a covered security2 and 7#b7 a criminal enforcement action with respect to fraud1 deceit1 or unlawful conduct in connection with a covered security or transactions of a covered security if that enforcement action complies in all respects with the legal requirements for securities fraud under ,federal law4 7e7 ,effect ,this section shall be effective notwithstanding any other provision of law and shall supersede any previously enacted conflicting provision4 4