Who files securities class actions?
The Private Securities Litigation Reform Act of 1995 (PSLRA) provides an incentive for institutional investors to serve as lead plaintiffs in securities fraud class actions and creates a presumption that such investors are best equipped to serve in that capacity. Indeed, studies have shown that cases in which institutional investors are lead plaintiffs tend to result in significantly higher recoveries. In 2007, the median settlement in securities class actions filed by institutional investors was $18 million, verses $6 million in cases with other kinds of lead plaintiffs.
