Securities Litigation Attorney Accountability and Transparency Act

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Securities Litigation Attorney 
Accountability and Transparency Act''.

SEC. 2. 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:
            ``(10) Disclosures regarding payments.--
                    ``(A) Sworn certifications required.--
                            ``(i) In general.--In any private action 
                        arising under this title, each plaintiff and 
                        any attorney for such plaintiff shall provide 
                        sworn certifications, which shall--
                                    ``(I) be personally signed by such 
                                plaintiff and each such attorney, 
                                respectively;
                                    ``(II) be filed with the complaint; 
                                and
                                    ``(III) 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 pro rata share of any recovery 
                                received by the plaintiff, except as 
                                ordered or approved by the court in 
                                accordance with paragraph (4).
                            ``(ii) Court actions.--Upon disclosure of 
                        any payment or promise of payment described in 
                        clause (i), the court shall disqualify the 
                        attorney from representing the plaintiff.
                    ``(B) Definition.--For purposes of this paragraph, 
                the term `payment' includes 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.--
                    ``(A) In general.--In any private action arising 
                under this title, each plaintiff and any attorney for 
                such plaintiff shall provide sworn certifications, 
                which shall--
                            ``(i) be personally signed by such 
                        plaintiff and each such attorney, respectively;
                            ``(ii) be filed with the complaint; and
                            ``(iii) identify 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.
                    ``(B) Court actions.--The court--
                            ``(i) may allow certifications under 
                        subparagraph (A) to be made under seal;
                            ``(ii) shall review such certifications to 
                        determine whether cause exists to believe that 
                        the nature or terms of the fee arrangement for 
                        any other matter influenced the selection and 
                        retention of counsel in the private action 
                        arising under this title;
                            ``(iii) may conduct a factual inquiry or 
                        refer the question to a magistrate, if the 
                        court makes a finding described in clause (ii); 
                        and
                            ``(iv) shall disqualify the attorney from 
                        representing the plaintiff in any action 
                        arising under this title, if the court finds, 
                        after such inquiry, that the nature or terms of 
                        the fee arrangement for any other matter 
                        influenced the selection and retention of 
                        counsel 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--
                    ``(A) be personally signed by such plaintiff and 
                each such attorney, respectively;
                    ``(B) be filed with the complaint; and
                    ``(C) identify any contribution made during the 5-
                year period preceding the date of 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 real or apparent 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.''.
    (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:
            ``(9) Disclosures regarding payments.--
                    ``(A) Sworn certifications required.--
                            ``(i) In general.--In any private action 
                        arising under this title, each plaintiff and 
                        any attorney for such plaintiff shall provide 
                        sworn certifications, which shall--
                                    ``(I) be personally signed by such 
                                plaintiff and each such attorney, 
                                respectively;
                                    ``(II) be filed with the complaint; 
                                and
                                    ``(III) 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 pro rata share of any recovery 
                                received by the plaintiff, except as 
                                ordered or approved by the court in 
                                accordance with paragraph (4).
                            ``(ii) Court actions.--Upon disclosure of 
                        any payment or promise of payment described in 
                        clause (i), 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.
            ``(10) Disclosures regarding legal representations.--
                    ``(A) In general.--In any private action arising 
                under this title, each plaintiff and any attorney for 
                such plaintiff shall provide sworn certifications, 
                which shall--
                            ``(i) be personally signed by such 
                        plaintiff and each such attorney, respectively;
                            ``(ii) be filed with the complaint; and
                            ``(iii) identify 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.
                    ``(B) Court actions.--The court--
                            ``(i) may allow certifications under 
                        subparagraph (A) to be made under seal;
                            ``(ii) shall review such certifications to 
                        determine whether cause exists to believe that 
                        the nature or terms of the fee arrangement for 
                        any other matter influenced the selection and 
                        retention of counsel in the private action 
                        arising under this title;
                            ``(iii) may conduct a factual inquiry or 
                        refer the question to a magistrate, if the 
                        court makes a finding described in clause (ii); 
                        and
                            ``(iv) shall disqualify the attorney from 
                        representing the plaintiff in any action 
                        arising under this title, if the court finds, 
                        after such inquiry, that the nature or terms of 
                        the fee arrangement for any other matter 
                        influenced the selection and retention of 
                        counsel in the private action arising under 
                        this title.
            ``(11) 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--
                    ``(A) be personally signed by such plaintiff and 
                each such attorney, respectively;
                    ``(B) be filed with the complaint; and
                    ``(C) identify any contribution made during the 5-
                year period preceding the date of 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 real or apparent 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.''.

SEC. 3. 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. 4. STUDY OF AVERAGE HOURLY FEES IN SECURITIES CLASS ACTIONS.

    (a) Study and Review Required.--The Comptroller General of the 
United States (in this section referred to as the ``Comptroller 
General'') shall conduct a study and review of fee awards to lead 
counsel in securities class actions during the 7-year period preceding 
the date of enactment of this Act, to determine the effective average 
hourly rate for lead counsel in such actions. Such study and review 
shall also consider lead counsel perquisites, including travel and 
accommodation.
    (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 report every 3 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 require plaintiff and plaintiff's attorney in any private securities class action to disclose in sworn certifications filed with the complaint: (1) any direct or indirect payment, or promise of such, by the attorney (or an affiliated person) to the plaintiff (or any affiliated person), beyond the pro rata share of any recovery received by the plaintiff; (2) the nature and terms of any legal representation provided by such attorney (or an affiliated person) to such plaintiff (or an affiliated person), other than the representation of the plaintiff in the private action; and (3) any contribution made during the five-year period preceding the filing date of the complaint by such attorney (or an affiliated person) or any political action committee controlled by such attorney, to any elected official with real or apparent 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. Requires the court, in exercising its discretion over the approval of lead counsel, to employ a competitive bidding process as one of the criteria in the selection and retention of counsel for the most adequate plaintiff in a class action, unless the court determines on the record that such a process is not feasible. Directs the Comptroller General to: (1) study fee awards to lead counsel in securities class actions during the seven-year period preceding the enactment of this Act; and (2) determine the effective average hourly rate for lead counsel in such actions, including lead counsel perquisites such as travel and accommodation.