A Brief History of the Founding of ILEP

Founding of the Institute of Law and Economic Policy (“ILEP”) was spurred by the adoption in 1995 of the Private Securities Litigation Reform Act (“PSLRA”), one of 10 bills comprising Republican Congressman Newt Gingrich’s “Contract with America” when he became Speaker of the House in in 1994.

The PSLRA was the only bill of that package enacted (and then only over President Clinton’s “veto”). The bill was intended not merely to “reform” securities fraud class actions, but to severely restrict them, and put the then plaintiff bar out of business. It has oft been said that a direct consequence of this “reform” was enabling a corporate culture that led to the Enron, WorldCom, and Global Crossing financial fiascos, all which cost pension funds and investors billions of dollars.

Passage of the PSLRA was in fact part of a long-term strategy to restrict access to the courts that can be traced by to 1971, when then corporate counsel (later Supreme Court Justice) Lewis Powell wrote a confidential letter to the Chamber of Commerce bemoaning attacks against the tobacco industry, and calling for the roll back of progressive legislation adopted in the 1960s. This led to the founding of organizations such as the Federalist Society, more lobbying by the Chamber of Commerce, and huge spending by the Scaife Mellon family and others (See “Dark Money” by Jane Mayer).

Harvey Goldschmid, Professor, SEC Commissioner and Counsel (1940-2015)

By 1995, it was apparent that the “other side” of the narrative needed a voice, and more balance was needed to explain the important role of private securities fraud litigation to maintaining corporate accountability and supplementing the role of the resourced-limited Securities Exchange Commission. At that point, Ed Labaton (then of “Goodkind Labaton”) and Sandy Stein (then of “Milberg Weiss”) joined forces and sought guidance from leading securities law scholars – Harvey Goldschmid (Columbia); Joel Seligman (co-author of Loss, Seligman treatise on Securities Law); and James Cox (Duke). Harvey went on to become counsel to SEC Chairman Arthur Levitt, and ultimately an SEC Commissioner himself (passing away prematurely on February 12, 2015). This advisory cohort has been supplemented by Professors Don Langevoort (Georgetown), Randall Thomas (Vanderbilt), Jill Fisch (Pennsylvania) and Hillary Sale (Georgetown).

For over two decades, ILEP has conducted cutting edge symposia with scholars representing competing viewpoints. (See Participants Page). Papers presented and published have been cited in over 60 federal court cases, including several important U.S. Supreme Court decisions (See Citations Page). Over that entire period, Ed Labaton presided as President of ILEP, and has now been succeeded by Marc Gross (Pomerantz). Ed continues to participate in ILEP activities as President Emeritus. Co-Founder Sandy Stein, who was instrumental in ensuring ILEP’s growth, has been succeeded by her daughter, Laura Stein (Robbins Geller).

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