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Who Cares?, Adam C. Pritchard
Who Cares?, Adam C. Pritchard
Articles
Jim Cox and Randall Thomas have identified an interesting phenomenon in their contribution to this symposium: institutional investors seem to be systematically "leaving money on the table" in securities fraud class actions. For someone who approaches legal questions from an economic perspective, the initial response to this claim is disbelief. As the joke goes, economists do not bend over to pick up twenty-dollar bills on the street. The economist knows that the twenty dollars must be an illusion. In a world of rational actors, someone else already would have picked up that twenty-dollar bill, so the effort spent bending over …
Leaving Money On The Table: Do Institutional Investors Fail To File Claims In Securities Class Actions?, Randall Thomas, James D. Cox
Leaving Money On The Table: Do Institutional Investors Fail To File Claims In Securities Class Actions?, Randall Thomas, James D. Cox
Vanderbilt Law School Faculty Publications
In this paper, we examine the role of institutional investors in securities fraud class actions. We begin by surveying the first five years of experience with the Lead Plaintiff provision of the Private Securities Litigation Reform Act (PSLRA). In particular, we look at those cases where the lead plaintiff position has been contested and the outcome of those disputes. We find that institutional investors have been very successful in obtaining the position of lead plaintiff where they have sought it, but that there are a number of cases where they were unsuccessful. In part two of the paper, we dissect …