Law and Finance: The Future of Securities Fraud Litigation



Friday, February 8, 2008

The Claremont Colleges
Claremont, California

Organized by the Financial Economics Institute at Claremont McKenna College and
The LRN-RAND Center on Corporate Ethics, Law and Governance RAND Corporation


To bring together academics, policymakers, and practitioners to discuss the law and economics of securities fraud litigation, with a particular emphasis on how recent changes in financial markets and in the law are likely to impact the future of securities fraud litigation.  The conference will feature a keynote address, presentations of accepted papers, panel presentations by practitioners, and a discussion format for participants.

Recent events raise questions about the future of securities fraud litigation, including: court decisions that have increased the threshold for bringing suits and certifying classes; the Department of Justice investigation of payments to class representatives by plaintiff law firms; a reduction in securities class action filings; and dramatic changes in capital markets and participants since the l980s when the courts adopted the fraud-on-the-market theory, which underlies securities fraud litigation.

The developments have been controversial. Groups like the Committee on Capital Market Regulation have argued that the threat of securities litigation is damaging competitiveness of US capital markets; at the same time, in the aftermath of recent accounting fraud and option backdating scandals, others argue that it is not the time to limit legal recourse for investors. These disagreements indicate the need for a critical review of securities fraud litigation in the US. The goal of the conference is to help frame public policy issues and to set forth objective criteria for determining the efficacy of the current approach.


     Please submit pdf versions of papers via email:


     or send hard copies to either:

     CONTACT:       Prof. Eric Helland
                                 RAND Corporation
                                 1776 Main Street
                                 Santa Monica, CA 90407
     CONTACT:       Prof. Janet Kiholm Smith
                                 Claremont McKenna College
                                 Department of Economics
                                 500 E. Ninth Street
                                 Claremont, CA 91711

     The submission deadline is November 1, 2007.

     Authors of papers accepted for the conference will be
     notified by November 30, 2007. The Financial Economics
     Institute will provide travel (economy round-trip) and
     accommodations for presenters and discussants.


     The conference will include contributed papers dealing with significant issues related to securities fraud litigation.
     Examples of potential topics are:

     – Are investors benefiting from securities fraud litigation?
     – What is the role of economic evidence in securities fraud litigation and how has it changed?
     – How does the increased prevalence of institutional investors and hedge funds, short selling and use of  derivatives affect the viability of the fraud-on-the-market theory?
     – What are the implications from the behavioral finance literature for this area of law?
     – Are there legitimate separate roles for the private bar and the SEC?
     – What are the roles of boards of directors, institutional investors, insiders and managers in securities cases and how have they changed?
     – Should “bad news” cases be treated differently from “good news” cases?
     – How will recent changes in the legal and economic standards for bringing a suit and certifying a class affect adjudication and disposition of fraud cases?


     John C. Coffee, Adolf A. Berle Professor of Law, Columbia Law School


     Please register at the conference website:


     The conference will take place on the campuses of the Claremont Colleges in Southern California. For travel and hotel information please visit the conference website:

     or contact:

     CONTACT:       The Financial Economics Institute
     Tel:                     (909) 607-0042


     RAND Corporation:

     Financial Economics Institute, Claremont McKenna College:


     For additional information, contact:

     CONTACT:       Janet Kiholm Smith
     CONTACT:       Eric Helland

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