"Ain't No Glory in Pain": How the 1994 Republican Revolution and the Private Securities Litigation Reform Act Contributed to the Collapse of the United States Capital Markets

I. Introduction . . . . . 980 A. Deregulation and Reform Hysteria . . . . . 984 B. Market Collapse . . . . . 989 II. The Private Securities Litigation Reform Act . . . . . 1004 A. How the PSLRA Amended Securities Fraud Pleading Requirements . . . . . 1007 1. The “Super Heightened” Pleading Standard . . . . . 1009 2. Super Heightened Pleading Standard Unnecessary . . . . . 1015 B. How the PSLRA Amended the Federal Securities Laws . . . . . 1018 C. Securities Litigation Uniform Standards Act of 1998 . . . . . 1028 D. The Effect of the PSLRA on the Securities Industry . . . . . 1028 E. Examination of Legislative History in Opposition to the PSLRA . . . . . 1033 III. Other 1990s Deregulation . . . . . 1040 A. The 1996 Telecommunications Act . . . . . 1040 B. The Commodities Futures Modernization Act of 2000 . . . . . 1041 IV. Is Deregulation Responsible for the Stock Market Collapse of 2002? . . . . . 1044 A . Enron . . . . . 1044 B . El Paso . . . . . 1049 C. W orldCom . . . . . 1051 D. Adelphia . . . . . 1054 E. Global Crossing . . . . . 1056 F. Qw est . . . . . 1058 V. Did the Sarbanes-Oxley Act Recapture Any Lost Protections? . . . . . 1059 VI. Proposals for Re-regulation . . . . . 1064 A. Re-regulation Must Occur To Protect Investors and Ensure the Integrity of the Capital Markets . . . . . 1065 B. To Those that Reject Federal Regulation as a Solution . . . . . 1069 C. Specific Regulations Must Be Adopted . . . . . 1070 VII. Conclusion . . . . . 1071