Chamber of Commerce report critical of securities class actions

The U.S. Chamber of Commerce released a report today arguing that U.S. securities laws and the class actions that stem from these laws primarily benefit large institutional investors, not individual investors.  The report argues that because institutional investors are diversified, their losses from investing in fraud-plagued companies are typically offset by their gains from selling other artificially inflated investments.  Class action remedies therefore overcompensate them.  Non-diversified individual investors are therefore more likely to sustain serious damage from financial fraud.  Institutional investors and plaintiffs lawyers contest these conclusions.  See  Critics of Shareholder Suits Aim at Big Holders, New York Times, October 27, 2005.