Contribution and Proportionate Liability under the Federal Securities Laws in Multidefendant Securities Litigation after the Private Securities Litigation Reform Act of 1995

Abstract

Multidefendant securities litigation in conjunction with the complexities created by partial settlements and the joint and several liability framework present challenging issues under the federal securities laws. Partial settlements arise in multidefendant securities actions when at least one plaintiff (or plaintiff-class) brings suit against both allegedly primary actors (such as issuers or underwriters and certain personnel thereof) and other violators (such as accountants, attorneys, and their respective entities) under the liability provisions of the federal securities laws. The nature and status of partial settlement issues under the federal securities laws, and in particular under the 1934 Act, changed in December 1995, when the U.S. Congress overrode President Clinton's veto and enacted the Private Securities Litigation Reform Act of 1995. Title II of the PSLRA, the focus of this Article, was drafted primarily to address the issues presented by the joint and several liability framework and the dispersed common law precedent concerning partial settlements.