The most recent edition of Forbes (Sept. 20) has a cover story on securities class action litigation. The authors are sharply critical of the effectiveness of public pension funds as lead plaintiffs.
Quote of note: “All told, public and union pension funds were lead plaintiffs in 28% of investor class actions last year; in 1996 they led just 3% of cases, says PricewaterhouseCoopers. Yet they have done nothing to improve shareholder recoveries or reduce significantly the lawyers’ cut. ‘We have a system where the courts consistently allow law firms to file cases on behalf of figureheads,’ complains University of Arizona law professor Elliott Weiss. Translation: The lawyers still run the show. It is a pointed criticism, for Weiss did the research on class action settlements that helped shape the reform act.”
