The U.S. Chamber Institute for Legal Reform has sponsored this interesting study on securities class action litigation that it released today at its 6th Annual Legal Reform Summit. It is a lengthy study that I plan to read and discuss in the future, but as summarized in this press release, the Institute for Legal Reform argues that

“The average American investor gets the short end of the stick in the securities class action system as compared to large institutional investors,” said ILR President Lisa Rickard. “The stock holdings of individual investors are generally too few in number to offset losses in stock value that follow allegations of securities fraud.”

The study was conducted for ILR by Navigant Consulting to determine if private securities class actions are serving the best interests of all investors. It revealed that most institutional investors don’t simply break even from securities class action settlements; many benefit, accumulating the gains of stock prices inflated by alleged fraud and also receiving compensation for losses suffered as a result of disclosure of the alleged fraud."