[Congressional Record Volume 159, Number 43 (Friday, March 22, 2013)]
[Senate]
[Pages S2334-S2335]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. CORNYN:
  S. 652. A bill to protect investors by fostering transparency and 
accountability of attorneys in private securities litigation; to the 
Committee on Banking, Housing, and Urban Affairs.
  Mr. CORNYN. Mr. President, I ask unanimous consent that the text of 
the bill be printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                 S. 652

       Be it enacted by the Senate and House of Representatives 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. 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

[[Page S2335]]

     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.
                                 ______