Musto said the Pennsylvania Securities Act currently requires the plaintiff in a security fraud suit to prove that he relied directly upon statements by the seller to engage in transactions that proved to be bogus and financially damaging.

"Unless you get the conversation on tape, how can you prove that you acted directly upon the words of your broker," Musto questioned. "Many people who lost money because they were acting directly on fraudulent advise, also lost in court because they simply couldn’t meet the requirements of the law to prove their case," he said.

Musto’s bill (SB 1347) would change Pennsylvania’s law to recognize the "fraud on the market" theory. Adopted by federal courts to relieve some of the burden of proof, the theory is that a plaintiff need only show that he purchased stock on the open market, and that defendant made misrepresentations regarding the

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security of the stock which, in turn, made its price rise.

"In the wake of Enron, it’s vitally important that the Commonwealth close any loopholes in the law that might prohibit the recovery of an individual’s retirement," Musto noted.

"Simply, this legislation would provide greater protection to the men and women who have worked hard for their money, but maybe need the advise of professionals to make that money work for them. If that advice causes great harm to the investor, it should be easier to prove it," Musto said.

Other highlights of the 8 bill Democratic package include strengthening criminal penalties for certain violations of the Securities Act, and doubling the amount courts can award in civil assessments.

For more information contact Mike Cotter @ 1-800-280-4277 or mcotter@dem.pasen.gov