Question

What the goal behind The Securities Litigation Uniform Standards Act of 1998 legislation and analyze its most significant provisions?

Answer 1

The goal behind the Securities Litigation Uniform Standards Act(SUSLA) of 1998 legislation was to ensure that federal court is the one and only venue for majority of securities class actions. Thus it was enacted to prevent accusers to take the undue protections which the Federal law provides in opposition to abusive litigations by filing law suits in the respective state courts, instead of the Federal court.

The most significant provision of SLUSA was:

CLASS ACTION LIMITATIONS which says that no covered class action can be taken based upon the common/statutory State law , thus the accuser cannot file a lawsuit in any State or Federal court by alleging --

(A) An omission or misrepresentation of a material fact related to the sale or purchase of a covered security

or

(B) that the defendant employed or used any manipulation or deception related to sale or purchase of a covered security

Another key provision mandated that covered class actions which are filed in state court to be removed to federal court.