• Aggregation...Do Too Many Cooks Spoil the Broth?
  • September 18, 2009
  • Law Firm: Bernstein Litowitz Berger & Grossmann LLP - New York Office
  • In the first issue of this publication, we explored Congress' rationale behind the lead plaintiff provisions of the Private Securities Litigation Reform Act of 1995 (the "PSLRA"). See "Institutional Investors As Lead Plaintiffs: Is There A New And Changing Landscape?" on page 1 of Institutional Investor Advocate, Volume 1. That article discussed how Congress sought to ensure more effective representation of investors by encouraging a shareholder with a substantial stake in the litigation -- preferably a large institutional investor -- to step up to the plate and take control of the litigation as lead plaintiff. These lead plaintiff provisions were intended to take control of shareholder litigation away from lawyers (who in pre-PSLRA cases often had more financial interest in a case's outcome that the nominal plaintiff) and shift it to substantial and sophisticated investors who were capable of exercising control over counsel.