What does it mean to be a lead plaintiff in a federal securities class action?
A lead plaintiff is a person or a small group of persons (typically 3-5 class members) that represents the class and supervises counsel. The lead plaintiff gives the class a face, humanizing the victims of securities fraud. The lead plaintiff chooses lead counsel, subject to the court’s approval, and is the primary client to whom the lead counsel reports. Importantly, the lead plaintiff also gets to vote on how the case resolves. Both the lead plaintiff and the lead counsel serve in a fiduciary capacity and must act in the best interests of the class they represent. The lead plaintiff must demonstrate that it lost money due to the securities fraud at issue and that it is adequate and typical. We are happy to discuss these requirements with you in more depth and explain how the court selects a lead plaintiff.
