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cited above. Commentators have noted that these provisions demonstrate that Congress "clearly anticipated the continued liability of secondary defendants." J. Fisch, In Search of Liability Standards for Secondary Defendants, 99 Col. L. Rev. 1293, 1313 (1999). These provisions would be "of limited importance unless the general standard of liability holds collateral defendants responsible" for their own fraudulent conduct. Id'.
F. THE EIGHTH CIRCUIT’S ANALYSIS WILL DAMAGE THE INTEGRITY OF THE MARKETPLACE
If the Eighth Circuit’s decision is upheld, there will be serious negative consequences for the financial markets and investors. Investor confidence would be undermined, which would itself lead to a downturn in and flight from the capital markets. Congress expressly recognized the importance of private securities litigation—which it deemed an "indispensable tool"—in helping to "’promote public and global confidence in our capital markets" by helping to deter wrongdoing. Conference Report on Securities Litigation Reform, H.R. Rep. No. 369, 104th Cong., 1st Sess. 31 (1995). The Court has stated that private securities actions "provide 'a most effective weapon in the enforcement' of the securities laws and are ’a necessary supplement to Commission action.'" Bateman Eichler, Hill Richards, lnc. v. Berner, 472 U.S. 299, 310 (1985) (quoting J.I Case Co. v. Borak, 377 U.S. 426, 432 (1964)); see also Lampf v. Gilbertson, 501 U.S. 350, 374 (1991) (Kennedy, J., dissenting ("private § 10(b) suits constitute ’an essential tool for enforcement of the 1934 Act’s requirements’") (quoting Basic lnc. v. Levinson, 485 U.S. 224, 231 (1988)).
