Tomayto, Tomahto
A few quick follow ups to some recent blog posts are in order, and both involve the Tellabs case, currently pending before the Supreme Court.
First, in the "everything is related somehow category," in researching our recent whitepaper, Accountability Goes Global: International Investors and U.S. Securities Class Actions, we learned that the lead plaintiff in the Tellabs litigation, Makor Issues & Rights Ltd., is an Israeli institutional investor. We apologize for not plugging our hard work earlier.
Second, last week, we discussed the semantic debate that references to short form names for the Private Securities Litigation Reform Act engendered.
Our intent, here at SLW World Headquarters, was to poke gentle fun at the issue, along the lines of the George Gershwin song, Let's Call The Whole Thing Off. For those 7 readers that may not recall the song, the song is most well known for verses such as "you say tomayto and I like tomahto," that compare different regional dialects. Lyrics can be found here.
An alert reader pointed us to this essay by DLA Piper partner David Priebe, which vociferously argues that the preferred defense firm terminology ("The Reform Act") was not simply the only choice, but that the preferred plaintiff firm terminology ("PSLRA") was in fact Orwellian Newspeak.
Quote of note:
Referring to the Reform Act as "PSLRA" is squelching political speech and political thought. Good defense lawyers - and, I submit, the most honest objective observers - should always make certain that the name by which the statute is referred reflects and displays its reformist nature.
I consider myself both honest and objective (who doesn't?) but I can't bring myself to be forced to call a statute by the preferred terminology someone else has chosen for me, particularly when the argument is premised on a novel revolving around a totalitarian and dystopian future.
After finding our dog-eared copy of 1984, and remembering that we also owned Aldous Huxley's Brave New World, and Ray Bradbury's Fahrenheit 451, we decided that the official word of the day will be dystopia.
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May 22, 2007 |
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Australian Class Action Firm First Law Firm to Go Public
The Australian based class action law firm Slater & Gordon became the first law firm in the world to go public yesterday, as shares began trading on the Australian Stock Exchange.
According to an article from The Legal Times:
The IPO is the first for a law firm following new legislation in Australia that allows firms to raise funds on the public markets and allows non-lawyers to invest.
The IPO received extensive press coverage in Australia, with articles from the Sydney Morning Herald, The Australian, and The Brisbane Times, among others.
The Legal Times also notes that "a similar bill is under consideration in the United Kingdom," and the Times of London has a story here, on the Slater Gordon IPO and an in depth examination of the possibility of similar public offerings in the UK.
A copy of the Slater Gordon prospectus is available here.
Quote of note:
Lawyers have a primary duty to the courts and a secondary duty to their clients. These duties are paramount given the nature of the Company’s business as an Incorporated Legal Practice. There could be circumstances in which the lawyers of Slater & Gordon are required to act in accordance with these duties and contrary to other corporate responsibilities and against the interests of Shareholders or the short-term profitability of the Company.
Update: Both The D&O Diary and Best in Class have posts on the Slater Gordon IPO.
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May 21, 2007 |
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The Check Should Be in the Mail, Soon
Turn back the clock to 2002.
Congress had just enacted the Sarbanes-Oxley Act, which created the "Fair Funds" concept through which penalties and disgorgements in SEC cases can be returned directly to injured investors.
Over the next three years, the SEC disbursed funds recovered under the Fair Funds program to investors in only a handful of cases.
From 2005 to the present, the pace quickened, with the SEC returning more than $1.7 billion to injured investors, in cases such as WorldCom, Bristol-Myers Squibb, and the New York Stock Exchange Specialists litigation.
But last week, SEC Chairman Christopher Cox indicated that the floodgates are about to open, and none to soon.
According to the Securities Class Action Services Settlement Pipeline, which measures the sum of all pending or tentatively announced settlements for which the claim deadline has not passed, there is nearly $6 billion in pending SEC settlements, including more than $3.4 billion collected to compensate investors victimized by mutual-fund trading scandals.
Chairman Cox's remarks, delivered before the Senate Subcommittee on Financial Services as part of his testimony concerning the SEC's 2008 appropriations request, indicated that he has:
ordered the creation of a new office that will focus the efforts of all of the SEC's offices around the country, and work full-time to return these funds to wronged investors. The creation of this specialized function within the SEC will ensure that investors' money is returned as quickly as possible, while minimizing the costs of the distributions.
The goal of this new office will be to:
develop consistent practices, and to routinize the execution of the Fair Funds function. Too much money is still undisbursed because of the complexities of the process, leaving investors uncompensated.
Chairman Cox also indicated that the SEC would begin working with the Bureau of the Public Debt to invest Fair Funds money in interest-bearing accounts prior to distribution.
His prepared remarks can be downloaded here and you can watch the full hearing here.
Update: Best In Class has a post on the SEC's announcement, here.
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May 18, 2007 |
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The Smallest Victory?
No one has ever suggested that I could read tea leaves, so I'll leave the prognosticating for others.
But in reviewing the transcript from the Tellabs argument earlier this week, I was again reminded of something that struck me as interesting at the time.
During the course of the oral argument, Chief Justice Roberts always referred to the Private Securities Litigation Reform Act of 1995 as the "PSLRA."
While Carter Phillips, counsel for the Defendant-Petitioners and Assistant Solicitor General Kannon Shanmugam called it the "Reform Act," not one of the justices chose to adopt that nomenclature.
This semantic distinction reminded me of the fierce battle that was waged after the enactment of the PSLRA, when defense attorneys would insist on describing the statute as the "Reform Act," while plaintiffs' attorneys would insist on calling the statute the PSLRA.
It truly was a distinction without much of a difference, but it was fun to watch the pitched battles.
As a mostly disinterested observer at this point, I found the Chief Justice's characterization as curious, but I'll leave the prognosticating to the oddsmakers in Vegas.
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May 8, 2007 |
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Accountability Goes Global: Part Deux
The companion paper to our upcoming webcast is now available for public consumption here.
Some key findings:
- The first instance we were able to find of an international institutional investor seeking to serve as a lead plaintiff was in 1999, in the Network Associates litigation.
- Every year since then has seen at least one international institutional investor seeking to serve as a lead plaintiff in a class action.
- International institutional investors sought to serve as lead plaintiffs 182 times in 98 different cases during that period.
- The cases where these investors were involved were not limited to those involving non-US companies - Prominent examples included Delphi, Coca Cola, General Motors, and Dell.
- The international institutional investors that filed lead plaintiff motions were from 17 different countries. Germany, Canada, and Israel were the countries with the largest number of movants.
- The lead plaintiff movants were represented by 23 different law firms. The law firm that represented international institutional investors most often – Milberg Weiss, followed by Schiffrin Barroway Topaz & Kessler, Bernstein Litowitz, Berger & Grossman, and Grant & Eisenhofer.
We hope to update this research on an annual basis, so stay tuned...
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Accountability Goes Global: International Investors and U.S. Securities Class Actions
First order of business - apologies for the recent radio silence. We are back and will be publishing regularly again.
Second order of business, to invite readers to a webcast that I will be moderating, Accountability Goes Global: International Investors and U.S. Securities Class Actions on Wednesday, May 9 at 9:30 am EDT (GMT -4).
The webcast will complement a soon to be published companion paper examining the increasing role that international institutional investors are playing in US Securities Class Actions.
You can register for the free webcast using the following link:
http://www.issproxy.com/globalaccountability/index.jsp
Hope to see you there.
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