Five
years after it was enacted, provisions of the Private
Securities Litigation Reform Act are prompting
district-level judges to take a more active role
in selecting lead plaintiffs and lead plaintiffs'
counsel.
The
judges for two cases, both arising from the Northern
District of California, have appointed individual
investors as lead plaintiff instead of institutional
investors or some mish-mash of plaintiffs organized
by wannabe lead plaintiffs' counsel.
"The
whole point of the reform was to install a lead plaintiff
with substantive decision-making ability and authority," wrote
Judge William H. Alsup in a 28-page opinion. But
that's not what is happening. The Nov. 28, 1999 order
denied several law firms' efforts to pool investors
together into a lead plaintiffs' group in a case
against Network Associates Inc., a Santa Clara-based
company that makes software to fight computer viruses.
Robert
A. Vatuone, who had lost about $28,500 during a months-long
dive in Network Associates' stock price, was eventually
appointed lead plaintiff by Judge Alsup, held a beauty
contest of his own and appointed San Francisco's
Lieff Cabraser Heimann & Bernstein as his lawyers.
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