How do courts determine who will serve as Lead Plaintiff?
The Private Securities Litigation Reform Act of 1995 (the “PSLRA”) provides that the most adequate lead plaintiff is the person or group of persons who has the largest financial interest in the relief sought by the class. Courts apply several economic models (absolute dollar loss or percentage-of-net-worth loss) in determining the lead plaintiff and may appoint co-lead plaintiffs in their discretion to achieve the PSLRA’s mandate.
