(1) Scheme liability continues to be the topic of the moment, with a New York Law Journal column (posted July 20 – subscrip. req’d) declaring Parmalat to be the best S.D.N.Y. securities litigation decision of the past year. The column, by Professor John Coffee, also discusses the recent Ninth Circuit opinion on the scope of scheme liability.
Quote of note: “[T]he new “scheme to defraud” case law could significantly extend the private reach of Rule 10b-5 against persons who only a year ago appeared immune as mere aiders and abettors. One can agree or disagree about the desirability of this result, but the Parmalat decision is carried off with style and authority.”
(2) The National Law Journal has an article (posted July 20 – subscrip. req’d) on the recent Congressional hearing for a proposed securities litigation reform bill. The article focuses on the issue of whether it is appropriate to auction off the role of lead counsel in securities class actions.
Quote of note: “Judge Walker testified recently before the House of Representatives subcommittee on capital markets that not only should Bill H.R. 5491 allow judges the option of competitive bidding as a means of selecting lead counsel, but also that competition among law firms should be more intense. ‘If anything, this provision should be made even stronger by providing that the court shall not permit a securities class action to proceed unless and until the lead plaintiff has demonstrated that the lead plaintiff has evaluated competing proposals for representation of the class,’ Judge Walker said in prepared testimony. “