Lead Plaintiffs and Their Lawyers: Mission Accomplished, or More to Be Done?
Research Handbook on Shareholder Litigation, Elgar Publishing, Forthcoming
20 Pages Posted: 5 May 2017 Last revised: 20 May 2017
Date Written: May 3, 2017
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: Suggested Citation