I 
110TH CONGRESS 
2D SESSION 
H. R. 5463 
To protect investors by fostering transparency and accountability of attorneys 
in private securities litigation. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 14, 2008 
Mr. HENSARLING (for himself and Mr. ROYCE) introduced the following bill; 
which was referred to the Committee on Financial Services, and in addi-
tion to the Committee on the Judiciary, for a period to be subsequently 
determined by the Speaker, in each case for consideration of such provi-
sions as fall within the jurisdiction of the committee concerned 
A BILL 
To protect investors by fostering transparency and 
accountability of attorneys in private securities litigation. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Securities Litigation 
Attorney Accountability and Transparency Act’’. 
SEC. 2. LOSING PLAINTIFF’S ATTORNEY PAYS. 
(a) SECURITIES EXCHANGE ACT OF 1934.—Section 
21D(c) of the Securities Exchange Act of 1934 (15 U.S.C. 
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78u–4(c)) is amended by adding at the end the following 
new paragraph: 
‘‘(4) ASSESSMENT OF FEES AND EXPENSES.— 
‘‘(A) DETERMINATION REQUIRED.—If the 
court in any private action arising under this 
title enters a final judgment against a plaintiff 
on the basis of a motion to dismiss, motion for 
summary judgment, or a trial on the merits, 
the court shall, upon motion by the defendant, 
determine whether— 
‘‘(i) the position of the plaintiff was 
not substantially justified; 
‘‘(ii) imposing fees and expenses on 
the plaintiff’s attorney would be just; and 
‘‘(iii) the cost of such fees and ex-
penses to the defendant is substantially 
burdensome or unjust. 
‘‘(B) AWARD.—If the court makes the de-
terminations described in clauses (i), (ii), and 
(iii) of subparagraph (A), the court shall award 
the defendant reasonable fees and other ex-
penses incurred by the defendant and impose 
such fees and expenses on the plaintiff’s attor-
ney. 
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‘‘(C) BASIS OF DETERMINATION REGARD-
ING POSITION; BURDEN OF PERSUASION.—The 
determination of whether the position of the 
plaintiff was substantially justified shall be 
made on the basis of the record in the action 
for which fees and other expenses are sought, 
but the burden of persuasion shall be on the de-
fendant.’’. 
(b) SECURITIES ACT OF 1933.—Section 27(c) of the 
Securities Act of 1933 (15 U.S.C. 77z–1(c)) is amended 
by adding at the end the following new paragraph: 
‘‘(4) ASSESSMENT OF FEES AND EXPENSES.— 
‘‘(A) DETERMINATION REQUIRED.—If the 
court in any private action arising under this 
title enters a final judgment against a plaintiff 
on the basis of a motion to dismiss, motion for 
summary judgment, or a trial on the merits, 
the court shall, upon motion by the defendant, 
determine whether— 
‘‘(i) the position of the plaintiff was 
not substantially justified; 
‘‘(ii) imposing fees and expenses on 
the plaintiff’s attorney would be just; and 
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‘‘(iii) the cost of such fees and ex-
penses to the defendant is substantially 
burdensome or unjust. 
‘‘(B) AWARD.—If the court makes the de-
terminations described in clauses (i), (ii), and 
(iii) of subparagraph (A), the court shall award 
the defendant reasonable fees and other ex-
penses incurred by the defendant and impose 
such fees and expenses on the plaintiff’s attor-
ney. 
‘‘(C) BASIS OF DETERMINATION REGARD-
ING POSITION; BURDEN OF PERSUASION.—The 
determination of whether the position of the 
plaintiff was substantially justified shall be 
made on the basis of the record in the action 
for which fees and other expenses are sought, 
but the burden of persuasion shall be on the de-
fendant.’’. 
SEC. 3. DISCLOSURES OF PAYMENTS, FEE ARRANGEMENTS, 
CONTRIBUTIONS, AND OTHER POTENTIAL 
CONFLICTS OF INTEREST BETWEEN PLAIN-
TIFF AND ATTORNEYS. 
(a) SECURITIES EXCHANGE ACT OF 1934.—Section 
21D(a) of the Securities Exchange Act of 1934 (15 U.S.C. 
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78u–4(a)) is amended by adding at the end the following 
new paragraphs: 
‘‘(10) DISCLOSURES REGARDING PAYMENTS.— 
‘‘(A) 
SWORN
CERTIFICATIONS
RE-
QUIRED.—In any private action arising under 
this title, each plaintiff and any attorney for 
such plaintiff shall provide sworn certifications, 
which shall be personally signed by such plain-
tiff and such attorney, respectively, and filed 
with the complaint, that identify any direct or 
indirect payment, or promise of any payment, 
by such attorney, or any person affiliated with 
such attorney, to such plaintiff, or any person 
affiliated with such plaintiff, beyond the plain-
tiff’s pro rata share of any recovery, except as 
ordered or approved by the court in accordance 
with paragraph (4). Upon disclosure of any 
such payment or promise of payment, the court 
shall disqualify the attorney from representing 
the plaintiff. 
‘‘(B) DEFINITION.—For purposes of this 
paragraph, the term ‘payment’ shall include the 
transfer of money and any other thing of value, 
including the provision of services, other than 
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representation of the plaintiff in the private ac-
tion arising under this title. 
‘‘(11) DISCLOSURES
REGARDING
LEGAL
REP-
RESENTATIONS.—In any private action arising 
under this title, each plaintiff and any attorney for 
such plaintiff shall provide sworn certifications, 
which shall be personally signed by such plaintiff 
and such attorney, respectively, and filed with the 
complaint, that identifies the nature and terms of 
any legal representation provided by such attorney, 
or any person affiliated with such attorney, to such 
plaintiff, or any person affiliated with such plaintiff 
other than the representation of the plaintiff in the 
private action arising under this title. The court may 
allow such certifications to be made under seal. The 
court shall make a determination whether the nature 
or terms of the fee arrangement for any other mat-
ter influenced the selection and retention of counsel 
in any private action arising under this title and, if 
the court so finds, shall disqualify the attorney from 
representing the plaintiff in any such action. 
‘‘(12) DISCLOSURES
REGARDING
CONTRIBU-
TIONS.—In any private action arising under this 
title, each plaintiff and any attorney for such plain-
tiff shall provide sworn certifications, which shall be 
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personally signed by such plaintiff and such attor-
ney, respectively, and filed with the complaint, that 
identifies any contribution made within five years 
prior to the filing of the complaint by such attorney, 
any person affiliated with such attorney, or any po-
litical action committee controlled by such attorney, 
to any elected official with authority to retain coun-
sel for such plaintiff or to select or appoint, influ-
ence the selection or appointment of, or oversee any 
individual or group of individuals with that author-
ity. 
‘‘(13) DISCLOSURE
REGARDING
OTHER
CON-
FLICTS OF INTEREST.—In any private action arising 
under this title, each plaintiff and any attorney for 
such plaintiff shall provide sworn certifications, 
which shall be personally signed by such plaintiff 
and such attorney, respectively, and filed with the 
complaint, that identifies any other conflict of inter-
est (other than one specified in paragraphs (10) 
through (12)) between such attorney and such plain-
tiff. The court shall make a determination of wheth-
er such conflict is sufficient to disqualify the attor-
ney from representing the plaintiff.’’. 
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(b) SECURITIES ACT OF 1933.—Section 27(a) of the 
Securities Act of 1933 (15 U.S.C. 77z–1(a)) is amended 
by adding at the end the following new paragraph: 
‘‘(10) DISCLOSURES REGARDING PAYMENTS.— 
‘‘(A) 
SWORN
CERTIFICATIONS
RE-
QUIRED.—In any private action arising under 
this title, each plaintiff and any attorney for 
such plaintiff shall provide sworn certifications, 
which shall be personally signed by such plain-
tiff and such attorney, respectively, and filed 
with the complaint, that identify any direct or 
indirect payment, or promise of any payment, 
by such attorney, or any person affiliated with 
such attorney, to such plaintiff, or any person 
affiliated with such plaintiff, beyond the plain-
tiff’s pro rata share of any recovery, except as 
ordered or approved by the court in accordance 
with paragraph (4). Upon disclosure of any 
such payment or promise of payment, the court 
shall disqualify the attorney from representing 
the plaintiff. 
‘‘(B) DEFINITION.—For purposes of this 
paragraph, the term ‘payment’ shall include the 
transfer of money and any other thing of value, 
including the provision of services, other than 
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SEC. 4. SELECTION OF LEAD COUNSEL. 
(a) SECURITIES EXCHANGE ACT OF 1934.—Section 
21D(a)(3)(B)(v) of the Securities Exchange Act of 1934 
(15 U.S.C. 78u–4(a)(3)(B)(v)) is amended by adding at 
the end the following: ‘‘In exercising the discretion of the 
court over the approval of lead counsel, the court shall 
employ a competitive bidding process as one of the criteria 
in the selection and retention of counsel for the most ade-
quate plaintiff, unless the court determines on the record 
that such a process is not feasible.’’. 
(b) 
SECURITIES
ACT
OF
1933.—Section 
27(a)(3)(B)(v) of the Securities Act of 1933 (15 U.S.C. 
77z–1(a)(3)(B)(v)) is amended by adding at the end the 
following: ‘‘In exercising the discretion of the court over 
the approval of lead counsel, the court shall employ a com-
petitive bidding process as one of the criteria in the selec-
tion and retention of counsel for the most adequate plain-
tiff, unless the court determines on the record that such 
a process is not feasible.’’. 
SEC. 5. STUDY OF AVERAGE HOURLY FEES IN SECURITIES 
CLASS ACTIONS. 
(a) STUDY AND REVIEW REQUIRED.—The Comp-
troller General of the United States shall conduct a study 
and review of fee awards to lead counsel in securities class 
actions over the five years preceding the date of enactment 
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of this Act to determine the effective average hourly rate 
for lead counsel in such actions. 
(b) REPORT REQUIRED.—Not later than 1 year after 
the date of enactment of this Act, the Comptroller General 
shall submit a report to the Committee on Banking, Hous-
ing, and Urban Affairs of the Senate and the Committee 
on Financial Services of the House of Representatives on 
the results of the study and review required by this sec-
tion. The Comptroller General shall submit an updated 
study every three years thereafter. 
(c) DEFINITION.—For purposes of this section, the 
term ‘‘securities class action’’ means a private class action 
arising under the Securities Act of 1933 (15 U.S.C. 77 
et seq.) or the Securities Exchange Act of 1934 (15 U.S.C. 
78 et seq.) that is brought as a plaintiff class action pur-
suant to the Federal Rules of Civil Procedure. 
Æ 
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