To protect investors by fostering transparency and accountability of attorneys in private securities litigation.

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. 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 expenses 
                        to the defendant is substantially burdensome or 
                        unjust.
                    ``(B) Award.--If the court makes the determinations 
                described in clauses (i), (ii), and (iii) of 
                subparagraph (A), the court shall award the defendant 
                reasonable fees and other expenses incurred by the 
                defendant and impose such fees and expenses on the 
                plaintiff's attorney.
                    ``(C) Basis of determination regarding 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 defendant.''.
    (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
                            ``(iii) the cost of such fees and expenses 
                        to the defendant is substantially burdensome or 
                        unjust.
                    ``(B) Award.--If the court makes the determinations 
                described in clauses (i), (ii), and (iii) of 
                subparagraph (A), the court shall award the defendant 
                reasonable fees and other expenses incurred by the 
                defendant and impose such fees and expenses on the 
                plaintiff's attorney.
                    ``(C) Basis of determination regarding 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 defendant.''.

SEC. 3. DISCLOSURES OF PAYMENTS, FEE ARRANGEMENTS, CONTRIBUTIONS, AND 
              OTHER POTENTIAL CONFLICTS OF INTEREST BETWEEN PLAINTIFF 
              AND ATTORNEYS.

    (a) Securities Exchange Act of 1934.--Section 21D(a) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78u-4(a)) is amended by 
adding at the end the following new paragraphs:
            ``(10) Disclosures regarding payments.--
                    ``(A) Sworn certifications required.--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 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 plaintiff'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 representation of the plaintiff 
                in the private action arising under this title.
            ``(11) Disclosures regarding legal representations.--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 matter 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 contributions.--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 contribution made within five years prior to the 
        filing of the complaint by such attorney, any person affiliated 
        with such attorney, or any political action committee 
        controlled by such attorney, to any elected official with 
        authority to retain counsel for such plaintiff or to select or 
        appoint, influence the selection or appointment of, or oversee 
        any individual or group of individuals with that authority.
            ``(13) Disclosure regarding other conflicts 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 interest 
        (other than one specified in paragraphs (10) through (12)) 
        between such attorney and such plaintiff. The court shall make 
        a determination of whether such conflict is sufficient to 
        disqualify the attorney from representing the plaintiff.''.
    (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 required.--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 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 plaintiff'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 representation of the plaintiff 
                in the private action arising under this title.
            ``(11) Disclosures regarding legal representations.--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 matter 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 contributions.--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 contribution made within five years prior to the 
        filing of the complaint by such attorney, any person affiliated 
        with such attorney, or any political action committee 
        controlled by such attorney, to any elected official with 
        authority to retain counsel for such plaintiff or to select or 
        appoint, influence the selection or appointment of, or oversee 
        any individual or group of individuals with that authority.
            ``(13) Disclosure regarding other conflicts 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 interest 
        (other than one specified in paragraphs (10) through (12)) 
        between such attorney and such plaintiff. The court shall make 
        a determination of whether such conflict is sufficient to 
        disqualify the attorney from representing the plaintiff.''.

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 adequate 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 
competitive bidding process as one of the criteria in the selection and 
retention of counsel for the most adequate plaintiff, 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 Comptroller 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 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, Housing, 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 section. 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 pursuant to the Federal Rules of Civil 
Procedure.

Summary: Securities Litigation Attorney Accountability and Transparency Act - Amends the Securities Exchange Act of 1934 and the Securities Act of 1933 to state that, in any private action in which the court enters a final judgment against plaintiff on the basis of a motion to dismiss, motion for summary judgment, or a trial on the merits, the court shall, upon defendant's motion, determine whether: (1) the position of the plaintiff was not substantially justified; (2) imposition of fees and expenses on the plaintiff's attorney would be just; and (3) the cost of such fees and expenses to the defendant is substantially burdensome or unjust.

Requires the court to award the defendant reasonable fees and other expenses, and impose such fees and expenses on the plaintiff's attorney, if the court makes positive determinations in such a case.

Places the burden of persuasion upon the defendant as to whether or not the position of the plaintiff was substantially justified.

Requires plaintiff and plaintiff's attorney to provide sworn, signed certifications that identify any actual or promised payment by the attorney to the plaintiff, beyond the plaintiff's pro rata share of any recovery.

Requires similar plaintiff and plaintiff's attorney certifications regarding: (1) legal representations; (2) contributions; and (3) conflicts of interest.

Requires the court, in exercising discretion over the approval of lead counsel, to employ a competitive bidding process as one of the criteria (unless the court determines that such a process is not feasible).

Instructs the Comptroller General to study and report to certain congressional committees on average hourly fees in securities class actions.