Private Securities Litigation and the Courts: Positive Political Theory and Evidence

Abstract:     
This paper incorporates insights from Positive Political Theory to examine the role of legislative reform on judicially created legal doctrines relating to private securities litigation. The study bears on the general question of how Congress can influence the use of legal doctrines within a judicial hierarchy. Specifically, we examine the effect of the Private Securities Litigation Reform Act of 1995 on the use of the "Group Pleading Doctrine" and "Fraud on the Market" theory - two doctrines that assisted plaintiff-investors in overcoming the strict federal pleading requirements for bringing their claims in federal court.

Number of Pages in PDF File: 29

Keywords: Positive Political Theory, judicial politics, judicial hierarchy, securities, fraud on the market, group pleading

working papers series