[JURIST] Officials at the US Chamber of Commerce's affiliate, the Institute for Legal Reform (ILR) [official website], said in a report [text, PDF; press release] released Thursday that the system of heavy securities class action litigation in the US is inefficient, unnecessary, and harmful to the US economy. The report says that the current securities class action system forces companies to settle with plaintiffs rather than risk trial, and that it most benefits trial lawyers while harming companies and failing to protect consumers:

This flawed system is not needed to monitor and punish securities fraud: the ample regulatory, civil, and criminal enforcement powers of the Securities and Exchange Commission, the Department of Justice, their state counterparts, and financial services self-regulatory organizations more effectively deter wrongdoers and compensate shareholders without the inefficiencies of the class action litigation system.