President Clinton, in a surprise blow to Silicon Valley allies, vetoed a bill Tuesday night that would have restricted securities fraud class actions by investors.
White House spokesman David Johnson said the bill would have erected unacceptable procedural hurdles for bringing security fraud lawsuits.
It was a no-win decision for Clinton.
High-technology companies and accounting firms had lobbied hard for the bill. And many high-tech executives are major political contributors crucial to Clinton’s reelection strategy, particularly in California.
But Clinton listened to traditional Democratic constituencies who described the bill, initially part of the Republicans’ “Contract With America,” as a blow to investor rights.