Let the Money Do the Monitoring: How Institutional Investors Can Reduce Agency Costs in Securities Class Actions

Seeking rents through class actions and legislative lobbying: a comparison

“…Also dealing with a better control of lawyers in the field of securities class actions, the US Private Securities Litigation Reform Act (P.S.L.R.A.) of 1995 introduced the lead plaintiff provision that encourages the monitoring of lawyers by financial institutions, for the profit of all class members (Choi and Thompson 2006;Weiss and Beckerman 1995). The bet behind the P.S.L.R.A.…”

The Role of Auditor Culpability in Naming Auditor Defendants in United States Securities Class Actions

“…In the absence of statistical inference based on a large sample, an assertion is only conjecture. In addition, Alexan-( ) der 1991 is fatally flawed by other, highly significant, methodological ( shortcomings Simon & Dato, 1996;Weiss & Beckerman, 1995;Cox, ) 1997;Seligman, 1994 . As discussed above, the Reform Act debate was comprised of two separate but related subsidiary debates. First, Reform Act proponents asserted that management generally was not culpable and therefore many of the lawsuits should not have been filed.…”

Efficient market hypothesis and fraud on the market theory a new perspective for class actions

“…In theory, '[a]ny showing that severs the link between the alleged misrepresentation and either the price received (or paid) by the plaintiff or his decision to trade at a fair market price will be sufficient to rebut the presumption of reliance' (Basic, 248). However, in practice it was almost impossible for defendants to successfully rebut the presumption (Weiss andBeckerman 1995, 2077). Milton Friedman argued in 1953 that '[T]he relevant question to ask about the "assumptions" of a theory is not whether they are descriptively "realistic," for they never are, but whether they are sufficiently good approximations for the purpose in hand.…”