How does the court determine who will serve as Lead Plaintiff?
The most adequate Lead Plaintiff is the person or group of persons who, in the determination of the court, has the “largest financial interest” in the relief sought by the class. The determination of the largest financial interest can be made using the dollar amount of the loss due to the securities law violations alleged or the percentage of net worth lost.
In securities fraud class actions, the most adequate Lead Plaintiff is the person or group of persons who, in the determination of the court, has the “largest financial interest” in the relief sought by the class. The determination of the largest financial interest can be made using the dollar amount of the loss due to the securities law violations alleged or the percentage of net worth lost. In consumer class actions, the court must review multiple factors, including the person’s commitment to the case and the ability of his or her lawyers.
The Private Securities Act of 1995 provides that the most adequate Lead Plaintiff is the person or group of persons who, in the determination of the court, has the largest financial interest in the relief sought by the class. The “largest financial interest” can be determined by courts in a variety of ways. Some courts appoint the Lead Plaintiff based on the dollar amount of the loss due to the securities law violations alleged, and some base this decision on the percentage of net worth loss. Also, depending on the circumstances, several entities and/or individuals may be appointed to serve a “co-lead” Plaintiffs.
The Private Securities Litigation Reform Act of l995 provides that the most adequate Lead Plaintiff is the person or group of persons who, in the determination of the court, has the largest financial interest in the relief sought by the class. The “largest financial interest” can be determined by courts in a variety of ways. Some courts appoint the Lead Plaintiff based on the dollar amount of the loss due to the securities law violations alleged, and some base this decision on the percentage of net worth lost. Also, depending on the circumstances, several individuals may be appointed to serve jointly as Lead Plaintiffs.
