�If securities class actions do not truly benefit shareholders, why do shareholders bring them?� writes the panel in its report. �One possibility looms particularly large: some plaintiffs may have private motives for bringing suit that they do not share with other shareholders.�

The report spends two of its 148 pages (beginning on page 82) discussing securities class actions and derivative suits, which they say �often have been filed by professional plaintiffs who appeared in hundreds of cases.� In a footnote, the authors of the report write (surely while chuckling): �The best known of these were Harry Lewis and William Weinberger. A Delaware Chancellor once expressed the view in jest that Mr. Lewis appeared so frequently in his court that he must have been a �street name.��

�Few believe they did this gratuitously; instead, there is widespread suspicion that many of these plaintiffs have received under-the-table payments from the plaintiffs� attorneys that they served,� it continues. �Such an alleged fact pattern underlies the recent indictment of the Milberg Weiss law firm, long the dominant plaintiffs� firm in the securities class-action industry.� (Milberg has pleaded not guilty to charges of an alleged illegal kickback scheme.)

Though 1995�s PSLRA addressed �the problem of �lawyers hiring the client�� by giving lead plaintiff status to the class member with the largest financial stake in the case, a new practice emerged, says the report: �pay-to-play.� �Plaintiff law firms contribute to the political campaigns of elected officials who hold control over decisions of pension funds� who �possibly in return� pick the law firm as its class counsel when it becomes lead plaintiff.

The panel�s recommendation: �When political contributions are made by lawyers to individuals in charge of a state or municipal pension fund, the attorneys should not be permitted to represent the fund as a lead plaintiff in a securities class action.�