June 27, 2006

Here Comes Congress

As a consequence of the Milberg Weiss indictment, several Congressmen have introduced a bill (H.R. 5491) that would amend the Private Securities Litigation Reform Act.

The legislation, entitled the "Securities Litigation Attorney Accountability and Transparency Act," would:

(1) allow a prevailing defendant to argue to the court that the plaintiff's attorney should pay the prevailing defendant's fees and expenses because the "position of the plaintiff was not substantially justified;"

(2) require disclosure to the court of any conflict of interest between a plaintiff and his attorney and permit the court to disqualify the attorney if necessary; and

(3) permit courts to approve lead counsel in securities class actions through "alternative means," including a competitive bidding process.

A hearing on the legislation will take place before the Subcommitte on Capital Markets, Insurance, and Government Sponsored Enterprises of the House Committee on Financial Services tomorrow morning. The witnesses list can be found here. Thanks to Point of Law for the link.

Posted by Lyle Roberts at June 27, 2006 7:16 PM | TrackBack
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