The Wall Street Journal reports that the SEC will hold a roundtable in the spring of 2008 on issues relating to shareholder litigation reform, including the role played by insurers in indemnifying companies and individuals and the cost of paying for attorneys fees in securities class action lawsuits. In addition, the roundtable is also expected to review how the SEC’s Fair Funds program, granted under Sarbanes Oxley, can be coordinated with settlements from private lawsuits.
The announcement follows mounting concerns voiced by the White House, business groups and the legal academic community over the perceived loss of competitiveness suffered by U.S. financial markets as a result of increased private securities lawsuits. Potential changes in shareholder litigation regulation adopted by the SEC could have a significant impact on providers of directors and officers’ liability insurance and the companies that purchase it.
SEC Chairman Christopher Cox is quoted by the Wall Street Journal as saying that the SEC looks “forward to a continuing public discussion to help inform the debate surrounding these issues that will give the Commission the opportunity to learn what, if any, further specific actions might be warranted on these topics.”
