Financial Reform Conferees Adopts Levin's Gustafson Fix

Last week, during the conference committee negotiations on the financial reform legislation, Senator Carl Levin introduced an amendment that he describes as a "Gustafson fix."  It would, in his words, 

address the effects of a 1995 Supreme Court ruling, in the Gustafson case, that has left investors in private securities offerings without protection from material misstatements or omissions in the security’s prospectus. The Gustafson ruling interpreted the securities laws as depriving purchasers in private offerings of the same protections against material misstatements or omissions that apply to public offerings. Our amendment would restore Congressional intent and close that loophole
 

Jim Hamilton's blog reports that, in fact, the conferees accepted the Levin amendment.