A recent decline in stockholder class-action suits is more likely due to a 1995 litigation reform measure than financial and accounting requirements of the 2002 Sarbanes-Oxley Act, the drafter of the later bill told underwriters here.
Former U.S. Rep. Michael Oxley, a Republican from Ohio, said he wished he could take credit for the near historic low point for securities class actions, "but frankly I think it was the Private Securities Litigation Reform Act."
The 1995 PSLRA raised procedural hurdles for bringing securities class actions to federal court in an attempt to stop plaintiffs' lawyers from bringing an action anytime a company's stock price fell.
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