October 19, 2006

Bruce Carton at Securities Litigation Watch (channeling BNA Securities Law Daily) writes that an expert committee (the "Paulson Committee") may be filing a report next month with the U.S. Treasury proposing alterations to securities class action litigation. In particular, Columbia lawprof Jack Coffee says the panel is considering at least two noteworthy ideas: to quote Carton, "[1.] The SEC could 'dis-imply' a private cause of action under Rule 10b-5 against corporations, leaving enforcement of that rule to the government, not private plaintiffs," and "2. 'Stock drop' cases could be moved out of the courts and into the arbitration arena.

"The Paulson Committee's recommendations are due out by the end of November 2006. If either of these ideas are among them, look for a barrage of deafeningly loud disapproval from the plaintiffs' bar and consumer groups".