Co-written by Neil A Steiner
Originally published in New York Law Journal, February 11, 2002
Securities Defense May Challenge Certification When Multiple Investors Are Made Lead Plaintiff
One of the principal objectives of the Private Securities Litigation Reform Act of 1995 (the "Reform Act") was to restore control of securities class action litigation to the allegedly defrauded investors. Indeed, in the years prior to the Reform Act, securities class actions were widely perceived as "lawyer driven litigation" that primarily benefited class counsel – who were often awarded substantial contingency fees – rather than the class members who recovered only a small fraction of their losses. But, as a practical matter, the Reform Act’s goal largely has not been achieved because of the mechanics surrounding the appointment of lead plaintiff and the class certification process.
