How does the court determine who will serve as lead plaintiff?
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UPDATED: May 2, 2012
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The Private Securities Litigation Reform Act of 1995 provides that the most adequate Lead Plaintiff is the person or group of persons who, in the determination of the court, has the largest financial interest in the relief sought by the class. The “largest financial interest” can be determined by courts in a variety of ways. Some courts appoint the Lead Plaintiff based on the dollar amount of the loss due to the securities law violations alleged, and some base this decision on the percentage of net worth lost. Also, depending on the circumstances, several individuals may be appointed to serve jointly as Lead Plaintiffs.