Earlier this week, ILR released a new edition of ILR Briefly: Courting Confusion: Federal Securities Class Actions Don’t Belong In State Courts. This paper has become the subject of a blog on the D&O Diary, where author Kevin LaCroix argues in favor of the reforms proposed in the report.
“From my perspective, there are no valid arguments against the reforms proposed. None. The continued presence of parallel state and federal ’33 Act liability actions is an abominable result contrary to what Congress intended when it enacted SLUSA in 1998. The whole point of SLUSA was to consolidate all federal securities class actions in federal court. The result in Cyan, which, despite SLUSA, confirmed the continued existence of concurrent state court jurisdiction for ’33 Act liability actions, was the result of poor statutory draftsmanship in connection with SLUSA; it was absolutely 100% not the result Congress intended.” LaCroix writes. “The inexcusable wastefulness and inefficiency that has resulted is indefensible; it benefits no one except a very small group of plaintiffs’ lawyers but imposes enormous costs on companies, shareholders, courts, and insurers.”