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.