SLUSA Splits And Class Action Trials

Two interesting articles on securities fraud issues:

(1) This month’s issue of the Wall Street Lawyer (Vol. 9, No. 2 – July 2005) has an article on two circuit splits concerning the Securities Litigation Uniform Standards Act of 1998 (“SLUSA”). In “Showdown Over SLUSA,” the authors (Greg Harris and Christian Word) discuss the splits between the Second Circuit and Seventh Circuit over: (a) whether SLUSA preempts “holder” cases in which the plaintiff class consists entirely of investors who neither bought nor sold securities during the alleged class period; and (b) whether a district court’s decision to remand an action removed to federal court under SLUSA is appealable. The authors speculate that this double-split “raises the prospect of Supreme Court intervention and the high court’s first decision addressing SLUSA.” (The 10b-5 Daily’s discussion of the splits can be found here and here.)

(2) This month’s issue of the Securities Reform Act Litigation Reporter (Vol. 19, No. 4 – July 2005) has an article providing an overview of the securities class actions that have gone to trial since the enactment of the PSLRA. In “Ten Years After the Reform Act: Trends in Securities Class Action Trials,” the author (Michael Tu) finds that a total of seven cases have been brought to a trial verdict during this period, with only four cases involving claims based on post-Reform Act conduct. The Securities Litigation Watch has been following this issue closely and has both a handy list of the cases and a link to the article.

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