Securities Litigation Reform

Private securities class actions are lawsuits filed on behalf of shareholders against publicly traded companies alleged to have defrauded their investors. Supporters of these cases claim they are necessary to compensate shareholders and stop corporate transgressions. However, plaintiffs’ lawyers are the real beneficiaries of securities class actions, not investors. Read More...

There is enormous pressure on companies to settle these cases because of the cost of going to trial, the burden they inflict on management, and the risk of a runaway verdict. This typically results in settlements even in cases where the merit of the claim is questionable. The individuals responsible for wrongdoing rarely make a significant contribution, and those whom the securities class action system is supposed to protect—small, individual retail investors—are the ones who, in fact, benefit the least.

These cases threaten the health of the U.S. economy by imposing huge costs on American businesses, investors, and employees, while hurting the global competiveness of the U.S. securities markets. Companies actively question whether they want to access the U.S. securities markets and expose themselves to the problematic liability our current system imposes. The number of publicly registered American companies is now roughly half of what it was approximately 20 years ago and the fact that nearly one-in-ten public companies will be hit with a securities class action this year, could certainly dissuade companies from going public.

To curb securities litigation abuses, and improve the health of the U.S. economy, Congress, the courts and the Securities and Exchange Commission should consider commonsense reforms that would expose relationships between securities class action attorneys and plaintiffs, limit the lottery aspect of securities litigation and drive out meritless cases from the courts.

01/01/2019

Suggested Resources

Research
  • ILR Briefly COVID-19 Series: Federal Liability Problems and Solutions

    ILR Briefly COVID-19 Series: Federal Liability Problems and Solutions

    May 07, 2020

    As the public health and economic consequences of COVID-19 continue to mount, plaintiffs' lawyers are looking for ways to expand upon their legal theories and bring opportunistic litigation. This edition of ILR Briefly explores four projected hot spots of COVID-19 litigation: exposure liability, product liability, medical malpractice, and securities litigation. The paper goes on to recommend targeted federal legislative and administrative solutions to combat abusive lawsuits in these areas and protect the economic recovery. Read More

  • ILR Briefly COVID-19 Series: Liability Overview

    ILR Briefly COVID-19 Series: Liability Overview

    April 23, 2020

    As Americans and businesses of all sizes are working together to get through the COVID-19 health crisis, plaintiffs' lawyers have already begun filing COVID-19-related lawsuits. Limiting litigation abuse is essential to making available the tools and resources needed to combat the virus, and ultimately to spurring economic recovery once the immediate health crisis has been resolved. This edition of ILR Briefly explores the current and anticipated types of litigation coming out of the COVID-19 pandemic. Read More

All Results for Securities Litigation Reform

  1. In the News Today - September 19, 2019

    September 19, 2019 | News

    ILR COO Harold Kim on WGN Radio To Talk About Illinois' Lawsuit Climate Ranking; Average Number of Lawsuits Per Merger Rose In 2018... Read More

  2. Another Judge Rejects Merger Objection Securities Lawsuit

    September 06, 2019 | News

    A Delaware federal judge rejected a merger objection lawsuit because it wouldn't have created a "substantial benefit" to the shareholders, D&O Diary reports.... Read More

  3. Securities Class Action Filings Remain at High Tide

    September 03, 2019 | News

    The first half of 2019 continued the heightened pace of federal court securities class actions with 199 cases filed, signaling a year-end total of around 400 such lawsuits... Read More

  4. Securities Class Action Filings At "Near-Record Pace"

    August 01, 2019 | News

    A new report from Cornerstone Research shows that securities class action lawsuit filings were at a "near-record pace," D&O Diary reports.... Read More

  5. New Securities Litigation Report Exposes the Plaintiffs' Bar's Game of Padding its Pocketbook with Investors' Money

    July 26, 2019 | Blogs

    A securities plaintiffs' lawyer could hit it big by buying a lottery ticket, but the odds of a win are long. A new study suggests they're better off filing as many suits as they can and creating unnecessary work to defend massive fee requests. It turns out the odds of a windfall there are as sure-fire as Derek Jeter making the Hall of Fame. ... Read More

  6. In the News Today - July 25, 2019

    July 25, 2019 | News

    Plaintiffs' Firms Fight For Top Spot In Boeing Securities Case... Read More

  7. UK Becoming a "Preferred Jurisdiction" For Securities Litigation

    July 24, 2019 | News

    Two Dechert law firm partners wrote in The Times of London that the United Kingdom is quickly becoming a "preferred jurisdiction" for third party funding-fueled securities litigation.... Read More

  8. New Report: Securities Plaintiffs' Attorneys May Be Inflating Hours

    July 19, 2019 | News

    A new report released by three law professors found that plaintiffs' attorneys in securities class actions may be incentivized to inflate their billable hours to justify large fee awards, Law360 reports.... Read More

  9. In the News Today - July 16, 2019

    July 16, 2019 | News

    "Collective Investor Actions" On The Rise... Read More

  10. In The News Today - July 3, 2019

    July 03, 2019 | News

    "The M&A Class Action Racket: An End in Sight?"... Read More