January 22, 2007


Bloomberg Pushes Lawsuit Cap: New York's Future as Financial Capital at Risk, Report Says (JILL GARDINER, January 22, 2007, NY Sun)

Warning that New York's status as the world's financial capital is in jeopardy, Mayor Bloomberg and Senator Schumer today will recommend ways to stop the loss of finance jobs here and to ensure Wall Street's dominance in the global business market. [...]

Messrs. Bloomberg and Schumer, who first teamed up on the subject in November when they co-authored an opinion piece in the Wall Street Journal, are now calling on Congress to consider a number of actions.

The recommendations include capping punitive damages in securities lawsuits, increasing the number of visas for skilled immigrants, and recognizing international accounting standards so that foreign companies don't have to comply with two sets of standards.

Their report also says instructions for complying with the post-Enron Sarbanes-Oxley Act need to be clearer and calls on the federal government to revise guidelines for the so-called "Section 404," which has emerged as the most controversial part of the law regulating publicly traded companies. Many American and foreign businesses have viewed Section 404 as prohibitively expensive and burdensome for doing business here.

The report zeroes in on easing the regulatory environment, tamping down the litigious business atmosphere, and making regulations easier to comply with.

It notes that in Britain there is just one entity dictating regulations, while navigating regulations here is far more cumbersome. It also says that that legal realities in Britain make for far fewer frivolous lawsuits. America logged $10 billion in class action settlements in 2005, a record that some say is scaring away foreign investment here.

Senior staffers for the senator and mayor -- who briefed reporters yesterday on the McKinsey report yesterday on the condition that the report was not discussed with anyone until today -- said that if the actions outlined are implemented America's financial service sector could add between $15 billion and $30 billion in incremental revenue in 2011. That translates into 30,000 to 60,000 jobs.

While the Senator is trying to protect his hometown industry the rest can just fold damage caps for everyone into the bill.

Posted by Orrin Judd at January 22, 2007 12:11 PM

No mention of Eliot Spitzer.

Posted by: jim hamlen at January 22, 2007 12:29 PM