In an article in the November 16, 2006, New York Law Journal, Prof. John Coffee writes that notwithstanding what he labels some "dubious reporting" by the New York Times, he has not recommended to the Paulson Committee that "any private cause of action under Rule 10b-5 could and should be eliminated by SEC rule-making." He writes that his proposal (which is set forth in detail in this October 2006 law review article) actually is far more modest:
But the boldest and most fundamental of the reforms that I would recommend asks the SEC to adopt an exemptive rule under § 36 of the Securities Exchange Act of 1934 that would shield a non-trading public corporation from liability for monetary damages under Rule 10b-5. This would not eliminate a private cause of action under Rule 10b-5, but it would force the plaintiff's bar to sue and settle with corporate officers and agents--i.e., auditors, underwriters, and law firms--instead of treating the corporate entity as the deep pocket that paid everything. Such litigation is entirely feasible, as shown by the fact that in the Enron and WorldCom cases, which are the two largest settlements in securities class action history, the bankrupt corporate entity was not sued, yet record recoveries were obtained.
He also notes that § 36 could be used to "recast securities litigation" in another way, by providing auditors with a partial exemption in the form of a ceiling against catastrophic liability.