What are the advantages of serving as lead plaintiff?
There are several advantages to serving as lead plaintiff for the class. Critical decisions are made by the lead plaintiff that can affect a fund’s interest. First, the lead plaintiff plays a role in determining what claims can be alleged and how the class will be defined. The definition of the class circumscribes the time period covered by the class action. Second, the lead plaintiff has the responsibility, and the prerogative of choosing the attorneys who will act for the class. The primary question here is whether the investor believes that its interests will be better protected by being involved in a litigation, particularly where substantial losses have occurred, rather than allow another party, with their attorneys, to prosecute and settle the case. Third, the allocation of proceeds of a recovery is typically crafted by lead counsel and lead plaintiff, making the ability to draft the plan of allocation an important element of lead plaintiff position.
