The New York Law Journal has had two recent columns on securities litigation topics.
(1) In “Revisiting the Limitations Period For Securities Fraud” (June 10 edition), the authors discuss the Supreme Court’s decision to hear the Merck case.
Quote of note: “Doing away with inquiry notice entirely would solve much, if not all, of the existing confusion. However, the Supreme Court’s view of the competing policy issues is likely to inform its decisions regarding whether to keep inquiry notice and, if so, in what form, and whether to impose upon investors an actual duty to investigate and if so, what consequences follow a failure to do so. Reading the tea leaves, the Court is likely to reaffirm that the limitations period commences only after actual or imputed discovery of the facts, and may well formulate broad guidance for inquiry notice that provides an incentive to investigate fraud at an early stage, and imposes a duty to investigate, failing which imputed knowledge would bar claims.”
(2) In “Pay-to-Play Reform: What, How and Why?” (May 21 edition), the author examines alleged abuses in the retention of plaintiffs’ counsel in securities class actions. Among other items, he notes the recent judicial criticism of “portfolio monitoring.”
Quote of note: “Ultimately, the dividing line here probably should be between institutional investors that have an active in-house counsel and those that do not. In the latter case, the law firm effectively controls the client, and thus the problems that the PSLRA sought to end with its lead plaintiff reform resurface again. But when there is a competent house counsel who makes the litigation decisions, the provision of monitoring services should not be viewed as questionable or disqualifying.”