The Milberg Weiss Indictment and H.R. 5491

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Thank you for your kind invitation to testify today about abuses in securities class action litigation and on H.R. 5491, the proposed Securities Litigation Attorney Accountability and Transparency Act.

The problem of abuses by plaintiffs’ attorneys in securities class action litigation have come to the forefront because of the recent indictment of the Milberg Weiss law firm. But I am reminded of what Michael Kinsley once said: "The scandal isn't what's illegal; the scandal is what's legal." I, along with many academics, believe that the same is true with much securities class action litigation.

But while there are areas of securities class action reform that are unavoidably divisive, this bill should not be one of them. The small steps taken by this bill are uncontroversial means to reduce corruption in the securities litigation process, benefiting shareholders and plaintiffs’ law firms that play by the rules. I would like to see Congress to take more decisive action to protect investors and the American public from problems created by earlier Congressional action and judicial interpretations of these statutes, but this bill is a step in the right direction.

Download file The complete version of this testimony is available here as an Adobe Acrobat PDF

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About the Author


  • Ted Frank is a former resident fellow at AEI. He specialized in product liability, class actions, and civil procedure while at AEI. Before joining AEI, Mr. Frank was a litigator from 1995 to 2005 and clerked for the Honorable Frank H. Easterbrook on the Seventh Circuit Court of Appeals. Mr. Frank has written for law reviews, the Wall Street Journal, the Washington Post, and The American Spectator and has testified before Congress multiple times on legal issues. He writes for the award-winning legal blogs and Overlawyered, and the Wall Street Journal has called him a "leading tort-reform advocate."  Mr. Frank was recently elected to membership in the American Law Institute.

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