Lead Plaintiffs and Their Lawyers: Mission Accomplished, or More to Be Done?

20 Pages Posted: 5 May 2017 Last revised: 20 May 2017

Stephen J. Choi

New York University School of Law

Adam C. Pritchard

University of Michigan Law School

Date Written: May 3, 2017

Abstract

This chapter, written for the Research Handbook on Shareholder Litigation, surveys empirical work studying the lead plaintiff provision of the Private Securities Litigation Reform Act (PSLRA). That work finds that the lead plaintiff provision has encouraged institutional investors to participate in securities class actions, and that those institutional investors have negotiated lower attorneys' fees. Those benefits from the lead plaintiff provision are undercut, however, by political contributions made by plaintiffs' lawyers. We suggest additional reforms to promote transparency and competition among lawyers for lead plaintiffs. We also suggest reforms to the lead plaintiff provision intended to enhance the screening effect of the PSLRA.

Keywords: Securities fraud class actions, lead plaintiffs, lawyers

JEL Classification: K22, K41

Suggested Citation

Choi, Stephen J. and Pritchard, Adam C., Lead Plaintiffs and Their Lawyers: Mission Accomplished, or More to Be Done? (May 3, 2017). Research Handbook on Shareholder Litigation, Elgar Publishing, Forthcoming; NYU Law and Economics Research Paper No. 17-11; U of Michigan Law & Econ Research Paper No. 17-006; U of Michigan Public Law Research Paper No. 554. Available at SSRN: https://ssrn.com/abstract=2962630 or http://dx.doi.org/10.2139/ssrn.2962630

Stephen J. Choi

New York University School of Law ( email )

40 Washington Square South
New York, NY 10012-1099
United States

Adam C. Pritchard (Contact Author)

University of Michigan Law School ( email )

625 South State Street
Ann Arbor, MI 48109-1215
United States
734-647-4048 (Phone)
734-647-7349 (Fax)

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