Full opinion text
Memorandum Opinion BUTTRAM, District Judge. The present consolidated actions involve claims of securities fraud in the purchase and sale of common stock of Just for Feet, Inc., (“Just for Feet” or “Feet”) proscribed by section 10(b) of the Securities Exchange Act (the “Exchange Act”), 15 U.S.C. § 78j(b) and Rule 10b-5 promulgated thereunder by the Securities and Exchange Commission (“SEC”), 17 C.F.R. § 240.10b-5; claims of aiding and abetting violation of the Exchange Act in contravention of section 20 of the Exchange Act, 15 U.S.C. § 78t; and claims of insider trading prohibited by section 20A of the Exchange Act, 15 U.S.C. § 78t-l. Claims of fraud and professional negligence arising out of the same purchase and sale of Just for Feet common stock are raised under the law of the State of Alabama. There exists jurisdiction over the federal claims in these actions pursuant to 15 U.S.C. § 78aa and 28 U.S.C. § 1331. Supplemental jurisdiction over the state law claims pursuant to 28 U.S.C. § 1367 is asserted. Pending before the Court are the motions of competing parties, the State of Wisconsin Investment Board (“SWIB”) and the self-styled “Just for Feet Plaintiffs Group” (“the Group”), for appointment as lead plaintiff in the instant securities fraud action pursuant to section 21D(a)(3)(B)(i) of the Exchange Act, as amended by the Private Securities Litigation Reform Act of 1995 (“the Reform Act”), 15 U.S.C. § 78U-4. The Court’s original conclusion, after reviewing the materials initially filed by the contenders for the lead plaintiff position, was that each contender had advantages and disadvantages with regard to issues of typicality, adequacy, cohesiveness and amount of loss and that, as a consequence, the Court should flip a coin to decide who to appoint lead plaintiff. Rather than toss a coin in the privacy of chambers and inform the parties of its decision in a short order, the Court gave the contenders foreknowledge of its intention to have a public toss of the coin, along with the opportunity to negotiate an arrangement among themselves. This, the Court presumed, would be a fairer way of resolving the matter, all things being equal. In accord with its stated intention, the Court scheduled a public coin toss in its courtroom; however, as the appointed day approached, the contenders filed further motions, requesting that the Court reconsider its decision to hold a coin toss, or, at least, put the coin toss on hold for a brief amount of time. Upon receipt of these motions, the Court found more to consider in resolving the issue of lead plaintiff. As such, on the date of the coin toss and in the interest of making no decision in haste, the Court informed the contenders that the toss would be continued, pending resolution of the motions for reconsideration. It is to these motions for reconsideration that the Court now turns. BACKGROUND Allegations Derived from the Complaints. The claims stated in the complaints stem from the actions of various individuals in the sale and purchase of Just for Feet common stock. Throughout the alleged class period, Just for Feet, although incorporated in Delaware, was principally an Alabama corporation, headquartered in Pelham, Alabama, and running its operations from there. Until trading was halted on November 2, 1999, shares of Feet common stock were publicly traded on the NASDAQ National Market System. At the opening of the class period, Feet was a paradigmatic operator of large-scale specialty stores — large warehouse stores focusing on the sale of a single type of goods, such as casual clothing, books or housewares — the primary business of which was the sale of athletic and outdoor footwear to end-line customers. It operated fifty-four company-owned and eight franchised superstores in seventeen states and, after acquiring two smaller companies in March of 1997, it ran thirty company-owned and forty-eight franchised specialty stores in eighteen states and Puerto Rico. Allegedly, at this time, the overall market for the sale of athletic footwear was flagging; however, for the most part, Feet had purportedly managed, prior to the opening of the class period, to outperform the poor market and increase its sales and profits. Nonetheless, the complaints allege, the officers and directors of Feet were keenly aware of the continuing pressures of the market upon Feet’s business and allegedly decided, in order to remain buoyed atop the shrinking market for the athletic footwear, to expand Feet’s share of that market. The complaints aver that the officers and directors of Just for Feet decided to mask any losses incurred in the expansion through the use of fraudulent accounting practices, in order that the expansion occur with a minimum of dissent from shareholders. In essence, the complaints allege that in each Form 10-Q or 10-K filed with the SEC, along with public releases touting Feet’s performance, the Defendants made or participated in the making of several fraudulent misrepresentations by overstating the total sales of Feet, its gross and net income, and income per share, from April 1, 1997, until, apparently, the filing on September 15, 1999, of a Form 12B-25 statement of late filing which noted the forthcoming issuance of a statement reporting unfavorable second quarter performance. According to the complaints, in order to disguise the falsity of Feet’s assertions regarding profitability and cash flow during this time period, the directors and officers of Feet engaged in a number of improper accounting practices. For example, both complaints allege the following, in nearly identical terms: Feet entered into agreements with certain vendors which due to its improper accounting, resulted in overstating quarterly net income throughout the Class Period. Rather than donate the vendor fixtures to new stores, which is the standard industry practice, Feet would have vendors remit monies up front for the value of the store fixtures, and include that in current income. Then, Feet would buy the fixtures (shelving, displays, etc.) from the vendors for the same amount, capitalize the amounts as an asset, and depreciate the asset over time. The sham transactions were not income to Feet as required by [Generally Accepted Accounting Principles (“GAAP”) ] as Feet had not earned the income. Massey Complaint at ¶ 66. Among other intentional accounting mishaps attributed to Just for Feet are the false accrual of income credits for cooperative advertising from vendors; the understatement of operating expenses and overstating of accounts receivable by $500,000.00 related to uncollectible accounts from CheckCare, its check validation vendor; overstatement of inventory through improper capitalization of operating costs; and improper calculation of the value of inventory by determining its worth based upon the greater, rather than the lesser, of the cost of that inventory or its market value. The complaints also state two particular incidents of fraud committed by the officers and directors of Just for Feet that are confined to particular moments within the class period. As stated in the Massey complaint: Just for Feet management ... concealed the Company’s performance by improper use of acquisition accounting entries relating to the Sneaker Stadium acquisition. These unjustified entries causing the inventory reserves of Sneaker Stadium to be set greatly in excess of the necessary amounts, then reducing those reserves in subsequent quarters as needed to allow the Company to report inflated earnings. Per the 10-Q for the quarter ended July 31, 1998 the defendants caused the company to show an estimate of inventory value for the inventory acquired from Sneaker Stadium to be $36.4 million. In the 10-Q for the quarter ended October 31, 1998 the amount was adjusted downward to $27.6 million. Defendants caused Feet to adjust the inventory reserve by increasing its acquisition-related inventory reserve, with an offsetting increase to goodwill (which is being amortized over thirty years). The defendants then offset cost of sales against the excess Stadium Sneaker inventory [rejserves causing Just for Feet’s profit margins and net profits to be overstated. This treatment effectively masked poor operational results by reducing cost of sales, postponing recognition of costs that should have been charged to income currently. Massey Complaint at ¶ 61. It is also alleged that six weeks prior to the announcement by Just for Feet that it would file a petition of bankruptcy under Chapter 11, the officers and directors of Feet knew of such an intention, but did not disclose such to the public, in order to arrange a secret repayment plan with certain of Feet’s creditors unfavorable to the shareholders. The complaints attribute this wrongdoing to a host of officers and directors of Just for Feet, averring that each either participated in the wrongdoing or permitted it to happen, with his or her knowledge and blessing, despite the presence of duty to intervene in and correct the wrongdoing. These officers and directors include Ruttenberg, Eric L. Tyra (“Tyra”), Peter Berman (“Berman”), Cooper Evans (“Evans”), Patrick Lloyd (“Lloyd”), Michael Lazarus (“Lazarus”), Randall L. Haines (“Haines”), David F. Bellet (“Bellett”), Bart Starr, Sr. (“Starr”), Edward S. Croft, III (“Croft”), Warren G: Smith, Jr. (“Smith”), Helen Rockey (“Rockey”), John A. Berg (“Berg”), and Don-Alien Ruttenberg (“D. Ruttenberg”). With regard to Deloitte & Touche (“De-loitte”), the Burke complaint alleges that it was derelict in its duty to expose the improper accounting practices of Just for Feet. In particular, the Burke complaint avers that Deloitte, while issuing audit reports on the company’s financial statements for the fiscal year ending January 1998 through the end of the. class period, failed to insure that the underlying audit tests conformed to generally accepted auditing standards (“GAAS”). Among other things, the complaint alleges that Deloitte violated GAAS in that its senior personnel did not adequately supervise junior personnel; that it did not develop an audit plan that would screen for management irregularities; that Deloitte’s auditors had an inadequate understanding of Feet’s operations; that the auditors insufficiently examined collected evidence to make informed opinions about the financial statements audited by it; and that it failed to report problems to the audit committee of Feet’s board of directors. These failures, allege the Burke complaint, were of such a degree as to be actionable both under section 10(b) of the Exchange Act and rule 10b-5 promulgated pursuant thereto and under state law for the torts of professional negligence and common law fraud and deceit. These claims are also leveled against Steven H. Barry (“Barry”), who was, during the class period, the Birmingham office managing partner of Deloitte and the audit partner on Deloitte’s audit of Just for Feet, and against Karen Baker (“Baker”), who was, during the class period, the senior manager in the audit of Just for Feet. Lead Plaintiff Competitors. There are two competitors for lead plaintiff in the instant case, SWIB and the Group. While the former is a clearly demarcated entity, there is some difficulty in describing precisely what the contours of the Group are. This is the case because, at different points in its motions and briefs and depending on how beneficial a given definition is to its arguments, the Group defines itself either as the sum total of all persons who filled out the two hundred ninety-eight (298) certifications allegedly pursuant to 21D(a)(2)(A) that are attached to the motion to appoint the Group lead plaintiff or as the twelve-person “steering committee” selected from those attached certifications. For purposes of clarification, the relevant features of the broader group, as well as the salient characteristics of each member of the “steering committee,” will be set forth herein. State of Wisconsin Investment Board. SWIB acts in a fiduciary capacity as investment manager for the Wisconsin Public Employee Retirement System (the “System”), among other Wisconsin entities, in which nearly 450,000 state and local employees of the State of Wisconsin participate. The System for which SWIB invests is the ninth largest public pension fund in the United States, with over $69 billion in retirement and other public funds under its management. With the funds at its disposal, SWIB began purchasing Just for Feet stock in 1997. Its purchases of Just for Feet common stock occurred in two separate periods, broken by an approximate four month period of sale of that stock. The first period, lasting from May 29, 1997, until August 22, 1997, encompassed the following purchases at the listed prices: Date SHARES PURCHASED PRICE PER SHARE Total 05/27/97 50,000 $17.625000 $881.250.000000 06/12/97 25,000 $18.530000 $463,250.000000 06/13/97 100,000 $18.370000 $1.837,000.000000 06/13/97 25,000 $18.313000 $457,825.000000 06/16/97 60,000 $18.188000 $1.091,280.000000 06/16/97 5,000 $18.155000 $97,775.000000 06/16/97 40,000 $18.281250 $731,250.000000 06/17/97 125,000 $17.875000 $2,234,375.000000 06/18/97 50,000 $17.750000 $887,500.000000 06/18/97 6,200 $17.643000 $109,386.600000 06/19/97 100,000 $17.750000 $1,775,000.000000 06/19/97 5,800 $17.767000 $103,048.600000 06/23/97 90,000 $17.229000 $1,550,610.000000 Date Shares purchased Price per share Total 06/23/97 62,100 $17.422000 $1,081,906.200000 06/24/97 45,000 $17.236000 $775,620.000000 06/24/97 75,000 $17.600000 $1,320,000,000000 06/24/97 7,900 $17.405000 $137,499.500000 06/24/97 20,000 $17.395000 $347,900.000000 06/25/97 65,000 $16.875000 $1,096,875.000000 06/25/97 35,000 $16.807000 $588,245.000000 06/27/97 250,000 $16.750000 $4,187,500.000000 08/11/97 150,000 $17.875000 $2,681,250.000000 08/14/97 75,000 $15.875000 $1,190,625.000000 08/14/97 80,000 $16.562500 $1,325,000,000000 08/14/97 20,000 $16.030000 $320,600.000000 08/18/97 25,000 $15.875000 $396,875.000000 08/21/97 100,000 $12,750000 $1,275,000.000000 08/22/97 80,000 $12.625000 $1,010,000.000000 Totals 1,772,000 $29,947,445.900000 From August 23, 1997, until August 13, 1998, a period of nearly one year, SWIB made no purchases of Just for Feet common stock. However, in a four month period beginning on March 16, 1998, and ending on July 6, 1998, SWIB sold every share of Just for Feet stock that it had acquired during the Summer of 1997. During this time period in 1998 the following sales were made: Date Shares sold PRICE per share Total 03/16/98 10,000 $20.765600 $207,656.000000 03/16/98 75,000 $20.666600 $1,549,995.000000 03/16/98 50,000 $20.500000 $1,025,000.000000 03/16/98 75,000 0.583300 $1,543,747.500000 03/17/98 25,000 $21.000000 $525,000.000000 04/14/98 10,000 $21.125000 $211,250.000000 04/14/98 37,000 $21.406500 $792,040.500000 04/14/98 25,000 $21.625000 $540,625.000000 04/14/98 28.000 $21.625000 $605,500.000000 04/15/98 5,000 $22.218800 $111,094.000000 04/15/98 25,000 $22,250000 $556,250.000000 04/17/98 1,000 $22.437500 $22,437.500000 04/17/98 10,000 $22.375000 750.000000 04/20/98 25,000 $22.500000 $562,500,000000 04/20/98 10,000 $22.812500 $228,125.000000 04/20/98 8,000 $22.687500 $181,500.000000 04/21/98 16.000 $22.781300 $364,500.800000 04/22/98 25,000 3.000000 $575,000.000000 05/04/98 699 $24.017900 $16,788.512100 05/04/98 5.798 $24.017900 $139,255.784200 05/04/98 12,003 $23.500000 $282,070,500000 05/21/98 20,000 $22,375000 $447,500.000000 05/22/98 10,000 $22.218800 $222,188.000000 05/22/98 40,000 $22.531300 $901.252,000000 05/26/98 9,988 $22.250000 $222,233.000000 05/26/98 40,012 $22.250000 $890,267.000000 05/28/98 10,000 $22.406300 $224,063.000000 Date Shares sold Price per share Total 05/28/98 23,500 $22,500000 $528,750,000000 05/28/98 40,000 $22,500000 $900,000,000000 05/29/98 45,000 $22,344000 $1,005,480.000000 05/29/98 5,000 $22,406300 $112,031.500000 06/03/98 40,011 $22,343800 $893,997,781800 06/03/98 9,9 $23,343800 $233,181,218200 06/08/98 9,989 $23,187500 $231,619,937500 06/17/98 25,000 $25,375000 $634,375,000000 06/17/98 10,000 $25,125000 $251,250,000000 06/22/98 24,007 $26,770800 $642,686,595600 06/22/98 13,995 $26,770800 $374,657,346000 06/22/98 2,004 $26,475000 $582,555,900000 06/22/98 4,994 $26,475000 $132,216,150000 06/23/98 15,000 $27,750000 $416,250,000000 06/23/98 10,000 $27,156300 $271,563,000000 06/23/98 10,000 $27,250000 $272,500,000000 06/23/98 30,000 $27.250000 $817,500,000000 06/25/98 16,005 $27,625000 $442,138,125000 06/25/98 3,995 $27,625000 $110,361,875000 06/29/98 4,995 3.500000 $142,357.500000 06/29/98 20,005 3.500000 $570,142,500000 07/06/98 20,006 $28,937500 $578,923.625000 07/06/98 4,994 $28,937500 $144,513,875000 Totals 1,772,000 $42,025,549,087900 By the end of the day on July 6, 1998, SWIB held no remaining shares in Just for Feet. In selling its shares, SWIB not only recovered its investment in the Just for Feet common stock bought in the Summer of 1997, it profited considerably from the sale of said stock. First, on not a single share purchased between May 29, 1997, and August 22, 1997, did SWIB lose money. The highest price that SWIB paid for a share of stock during that summer was $18.53, an amount that included commissions. The lowest price at which SWIB sold that stock was $20.50. The total profit made by SWIB on these transactions was $ 12,106,071.1879. On August 13, 1998, over a month after dispossessing itself of its earlier shares of Just for Feet stock, SWIB made two purchases of Just for Feet stock: Date SHARES PURCHASED Price per shabe Total 08/13/98 •80.023 $14.750000 $1.180.339.250000 08/13/98 19.977 $14.750000 $294.660.750000 Totals 100.000 $1.475.000.000000 SWIB purchased no more shares of Just for Feet stock until January 22, 1999, when SWIB made four more large block purchases: Date Shares purchased Price per share Total 01/22/99 45.947 $13.168500 $605.053.069500 01/22/99 193.043 $13.168500 $2.542.086.745500 01/22/99 153.874 $13.800800 $2.123.584.299200 01/22/99 472.136 $13.800800 3.515,854.508800 Totals 865.000 $11.786.578.623000 SWIB then owned a total of 965,000 shares of Just for Feet common stock. On May 11,1999, SWIB went on another spate of summer buying of Just for Feet stock. During that period, SWIB made the following purchases: Date Shares purchased Price per share Total 05/11/99 50,000 $10.406300 $520.315.000000 05/12/99 19,977 $10.437500 $208.509.937500 05/12/99 80.023 $10.437500 $835.240.062500 05/14/99 125.000 $11.255000 $1,406.875.000000 05/17/99 ,994 $11.187500 $55.870.375000 05/17/99 20.006 $11.187500 $223,817.125000 05/25/99 80.023 $8.718800 $697.704.532400 05/25/99 40,011 $8.718800 $348.847.906800 05/25/99 19.977 $8.718800 $174,175.467600 05/25/99 9.989 $8.718800 $87.092,093200 05/27/99 21,500 $7.446600 $160.101.900000 05/27/99 25,000 $7.500000 $187.500.000000 05/27/99 59.500 $7.500000 $446.250.000000 06/04/99 100.000 $6.937500 $693.750.000000 06/07/99 4.994 $6.410600 i.014.536400 06/07/99 20.006 $6.390000 $127,838.340000 06/07/99 3.995 $6.437500 $25.717.812500 06/07/99 5.602 $6.436300 $36.056.152600 06/07/99 16,005 $6.437500 $103.032,187500 06/07/99 1,398 $6.406300 $8,956.007400 06/08/99 500 $6.467500 $3,233.750000 06/09/99 2,997 S.562500 $19.667.812500 06/09/99 3.836 $6.519900 $25,010.336400 06/09/99 12.003 $6.562500 $78,769.687500 06/09/99 15.364 $6.519900 $100,171.743600 06/10/99 10.643 $6.437500 8,514.312500 06/10/99 2.657 $6.437500 $17,104.437500 06/15/99 15,000 $5.250000 $78,750.000000 06/15/99 50,000 $4.995100 $249.755.000000 06/16/99 68.020 $5.294100 $360.104,682000 06/16/99 16,980 $5.294100 $89.893.818000 07/09/99 61,929 $5.625000 $348,350.625000 07/09/99 248.071 $5.625000 $1.395.399.375000 07/23/99 14,983 $5.187500 $77,724.312500 Date Shakes purohased Price per share Total 07/23/99 60,017 $5.187500 $311,338.187500 07/27/99 28,008 $4.919600 $137,788.156800 07/27/99 6,992 $4.919600 $34,397,843200 07/30/99 100,000 $3.687500 $368,750.000000 Totals 1,426,000 $10,144,388.516400 After July 30, 1999, SWIB ceased buying shares of Just for Feet stock and by the end of the class period, November 2, 1999, the total shares of Just for Feet stock owned by SWIB totaled 2,391,000. The total amount paid for these shares was $23,405,967.1394, an amount SWIB declares to be its total loss. Just for Feet Plaintiffs Group & Steering Committee. In the opening paragraph of its motion to be appointed lead plaintiff in the present litigation, the Group introduces itself in the following terms: Movants, who collectively suffered damages of $6,530,197.59 as a result of their purchase of Just for Feet, Inc., publicly traded securities, including common stock, submit this motion, pursuant to § 21D(a)(3)(B) of the Securities Exchange Act of 1934 for: (1) appointment of lead plaintiffs; and (2) approval of lead plaintiffs’ selection of co-lead counsel. Movants proffer for appointment as lead plaintiffs the Just for Feet Plaintiffs Group, which consists of a group of 12 class members who together lost $2,55k,802.12 as a result of their purchase or acquisition of Feet securities. Because the Just for Feet Plaintiffs Group includes institutions and individuals who purchased or otherwise acquired Feet securities, including Feet common stock, the Just For Feet Plaintiffs Group is also the most diverse lead plaintiff group and best able to represent the interest of all class members. In order to facilitate the efficient management and oversight of this litigation, the Just For Feet Plaintiffs Group has formed a Steering Committee of 12 members to provide a vehicle to efficiently and effectively oversee and manage the litigation going forward. Memorandum of Law in Support of Motion to Appoint the Just for Feet Plaintiffs Group as Lead Plaintiffs Pursuant to § 21D(a)(3)(B) of the Securities Exchange Act of 1934 and to Approve Lead Plaintiffs Choice of Counsel (“Group Memorandum I”) at 1 (emphasis added and internal citations omitted). Thus begins the Groups’s varying attempts at self-definition. In places, as at the beginning of the introductory paragraph, the Group defines itself as twelve members of the class whose total losses amount to $2,554,802.12. However, at other points, for example, in the last sentence of the introductory paragraph, the Group appears to define itself as the whole set of individuals who lost nearly $6.5 million, referring to the twelve class members as merely the “steering committee.” Before attempting to muddle this problem out, the Court will describe the relevant features of the members of the purported steering committee. George Burman. Beginning on March 5, 1998, George Burman (“Burman”) made the following purchases of Just for Feet common stock: Date Shares PURCHASED PRICE PER SHARE Total 03/05/98 2,000 $17.880000 $35,760.000000 08/28/98 3,000 $14.000000 $42,000.000000 03/05/99 5,000 $12.060000 $60,300.000000 05/11/99 5,000 $10.440000 $52,200,000000 06/01/99 5,000 $7.750000 $38,750.000000 07/28/99 10,000 $4.250000 $42,500.000000 Totals 30,000 $271,510,000000 Burman sold none of the shares purchased by him. He alleges a loss of the total amount paid by him for the Just for Feet stock, $ 271,510.00. Kenneth P. Bush and Louise M. Bush. Kenneth P. Bush (“Mr. Bush”) and Louise Bush (“Ms. Bush” and, collectively, the “Bushes”) apparently share joint ownership of 23,200 shares of Just for Feet common stock purchased during the class period. These shares were purchased between May 19, 1997, and August 19, 1999, inclusive: Date Shares purchased PRICE per share Total 05/19/97 100 $18.750000 $1,875.000000 05/19/97 100 $18.500000 $1,850.000000 05/19/97 100 $18.625000 $1,862.500000 05/19/97 100 $18.275000 $1,827.500000 08/20/97 200 $12.312500 $2,462.500000 08/20/97 800 $12,625000 $10,100.000000 08/20/97 200 $12.375000 $2,475.000000 08/20/97 300 $12,687500 $3.806.250000 08/20/97 700 $15.562500 $10,893.750000 08/20/97 1,225 $12.500000 $15,312.500000 05/14/98 500 $19.500000 $9,750.000000 05/15/98 300 $19.250000 $5,775.000000 05/15/98 500 $19.375000 $9,687.500000 05/15/98 200 $19.375000 $3,875.000000 07/21/98 100 $23.625000 $2,362,500000 07/21/98 100 $23.625000 $2,362.500000 07/21/98 500 $23.750000 $11,875.000000 12/22/98 100 $14.625000 $1,462,500000 12/22/98 600 $14.250000 $8,550.000000 12/22/98 100 $15.375000 $1,537.500000 12/22/98 100 $15.250000 $1,525.000000 12/22/98 100 $15.437500 $1,543.750000 01/15/99 450 $17.375000 $7,818.750000 Date SHARES PURCHASED Price per share Total 01/15/99 100 $17.437500 $1,743.750000 01/15/99 150 $17.312500 $2,596.875000 01/15/99 300 $17.187500 $5,156.250000 01/15/99 100 $17.250000 $1,725.000000 01/22/99 50 $14.375000 $718.750000 01/22/99 150 $14.000000 $2,100.000000 01/22/99 100 $13.875000 $1,387.500000 01/22/99 150 $14.500000 $2,175.000000 01/22/99 100 $14,875000 $1,487.500000 01/22/99 100 $13.625000 $1,362.500000 01/22/99 50 $14.937500 $746.875000 02/22/99 500 $11:625000 $5,812,500000 02/22/99 100 $11.375000 $1,137.500000 02/25/99 100 $11.250000 $1,125.000000 02/25/99 125 3,937500 $1,367.187500 02/25/99 100 $11.312500 $1,131.250000 02/25/99 100 $11.375000 $1,137.500000 02/25/99 200 $11.500000 $2,300.000000 02/25/99 100 $11.000000 $1,100.000000 02/25/99 50 $10.875000 $543.750000 02/26/99 150 $10.250000 $1,537.500000 02/26/99 50 $10.125000 $506.250000 02/26/99 200 $10.187500 $2,037.500000 02/26/99 200 $10,500000 $2,100.000000 03/02/99 300 $10.875000 $3,262.500000 03/02/99 100 $10,817500 $1,081.750000 03/05/99 500 $11.875000 $5,937.500000 03/05/99 200 $11.812500 $2,362.500000 03/16/99 100 $11.812500 $1,181.250000 03/16/99 150 $11.000000 $1,650.000000 03/16/99 150 $11.937500 $1,790.625000 03/17/99 100 $20.625000 $2,062.500000 03/17/99 100 $20,562500 $2,056.250000 03/17/99 2,000 $20.750000 $41,500.000000 03/17/99 200 $20,875000 $4,175.000000 03/18/99 350 $11.750000 $4,112,500000 03/18/99 200 $11.687500 $2,337.500000 03/23/99 50 $10.562500 $528.125000 03/23/99 100 10.750000 $1,075.000000 03/23/99 150 $10.625000 $1,593.750000 03/23/99 100 $10,500000 $1,050.000000 04/19/99 500 $12.000000 $6,000.000000 04/19/99 200 $11,875000 $2,375.000000 04/21/99 400 $11.875000 $4,750.000000 04/21/99 500 $11.750000 $5,875.000000 04/21/99 500 $11.937500 $5,968.750000 05/21/99 500 $10.250000 $5,125.000000 05/21/99 100 $10.313000 $1,031.300000 05/25/99 100 $8.906300 $890.630000 05/25/99 100 $8.687500 $868.750000 05/25/99 $8.875000 $443.750000 50 Date SHARES PURCHASED PRICE PER SHARE Total 05/25/99 100 3.937500 $893.750000 05/25/99 300 $8.750000 $2,625.000000 5/25/99 300 $8.812500 $2,643.750000 05/25/99 300 $8.625000 $2,587.500000 05/25/99 50 $8.718800 $435.940000 05/28/99 100 $7.500000 $750.000000 05/28/99 350 $7.562500 $2,646.875000 06/17/99 500 $6.375000 $3,187.500000 06/17/99 500 5.437500 $3,218.750000 08/03/99 50 $4.218800 $210.940000 08/03/99 100 $4.281800 $428.180000 08/03/99 150 $4.187500 $628.125000 08/03/99 100 $4.250000 $425.000000 08/03/99 250 $4.125000 $1,031.250000 08/12/99 200 4.531300 $906.260000 08/12/99 300 $4.500000 $1,350.000000 08/12/99 500 $6.187500 $3,093.750000 08/12/99 200 $5.968800 $1,193.760000 08/12/99 50 $4.562500 $228.125000 08/19/99 200 $5.937500 $1,187.500000 Totals 23,200 $304,382,822500 From the certification filed, it does not appear that the Bushes ever sold any of the shares of Just for Feet common stock purchased by them. In addition to standard purchases of Just for Feet common stock, the Bushes also bought and sold Just for Feet stock options during the class period. Their alleged losses in the purchase and sale of the options during the class period total $31,137.50. Mr. Bush alleges that he has attended all shareholder meetings of Feet since the company’s inception. In addition, Mr. Bush asserts that he was present at the Court’s hearing on March 6, 2000, and has taken, to the extent presently possible, an active role in the litigation pending. Echvard E. Eubank. Beginning on February 26, 1999, Edward E. Eubank (“Eubank”) made the following purchases of common stock: Date Shares purchased PRICE PER SHARE Total 02/26/99 1,300 $10.875000 $14,137.500000 02/26/99 6,600 $10.937500 $72,187.500000 05/27/99 1,000 7.437500 $7,437.500000 Totals 8,900 $93,762,500000 It appears that Eubank continues to hold his 8,900 shares of Just for Feet stock and has, consequently, lost $ 93,637.50. Eu-bank filed a financial statement with the Court indicating that his losses in Just for Feet common stock far exceed his net worth and filed an affidavit with the Court stating the same. As with the Bushes, Eubank asserts that he was present for the Court’s March 6, 2000, hearing and has taken an active interest in the present litigation. Larry Fallek. Larry Fallek (“Fallek”) made the following purchases of Just for Feet stock during the class period: Date Shares purohased Price per share Total 08/25/97 2,000 $12.500000 $25,000.000000 12/29/97 1,000 $13.187500 $13,187.500000 08/14/98 2,000 $16.000000 $32,000,000000 09/25/98 2,000 $13.750000 $27,500.000000 10/12/98 2,000 $11.750000 3,500.000000 02/18/99 1,000 $13.000000 $13,000.000000 03/01/99 2,000 $10.500000 $21,000.000000 06/07/99 1,000 $7.312500 $7,312.500000 07/27/99 1,000 $5.000000 $5,000.000000 Total 14,000 $167,500.000000 Having purchased 14,000 shares of Just for Feet common stock, none of which he has sold, Fallek has an alleged total loss of $ 167,500.00. Glen Guthrie. Glen Guthrie (“Guthrie”) made two purchases of Just for Feet stock on January 20,1999, one for 10,000 shares and another for 2,000 shares, paying, in each transaction $ 18.125 per share. Guthrie has not sold his shares in Just for Feet. He claims a total loss of $ 217,500.00. Michael Jamison. Michael Jamison made the following purchases of Feet common stock: Date Shares purohased Price per share Total 08/20/97 1,000_$12.500000_ $12,500.000000 08/28/97 1,000_$13.635000_$13,635.000000 11/07/97 600_$15.875000_$9,525.000000 06/15/99 2,400$5.750000$13,800.000000 Date SHARES PuRCHASED Price per share Total 09/13/99 3,000 $3.750000 $11,250.000000 09/17/99 3,000 $3.063000 $9,189.000000 09/17/99 3,000 3.131000 $9,393.000000 09/22/99 5,000 $1.874000 $9,370.000000 09/22/99 15,000 $1.889000 $28,335.000000 09/27/99 10,000 $2.463000 $24,630.000000 09/28/99 10,000 $2,834000 $28,340,000000 Totals 54,000 $169,967.000000 Jamison sold no shares of Just for Feet and claims a total loss of $ 169,967.00. James Mailon Kent III. James Mailon Kent III (“Kent”) made the following purchases of Just for Feet stock during the class period: Date Shares purchased Price per share Total 01/19/99 10,000 $17.750000 $177,500.000000 03/02/99 10,000 $11.062500 $110,625.000000 Totals 20,000 1,125.000000 From the materials provided to the Court, there is no indication that Kent ever rid himself of the 20,000 shares purchased by him. His contended loss therefore totals $288,125.00. David Laurents. From late May of 1999 until mid-September of the same year, David Laurents (“Laurents”) purchased 29,000 shares of Just for Feet common stock. These purchases are as follows: Date Shares purohased Price per share Total 05/20/99 1,000 $10.500000 $10,500.000000 05/20/99 1,000 $11.000000 $11,000.000000 05/20/99 1,000 $10.625000 $10,625.000000 05/21/99 1,000 $10.250000 $10,250.000000 05/24/99 1,000 $10.562500 $10,562.500000 05/25/99 1,000 3.875000 $8,875.000000 05/25/99 1,000 $9.125000 $9,125.000000 05/25/99 500 3.437500 $4,718.750000 05/26/99 1,000 $8.312500 8,312.500000 05/26/99 2,000 $7.625000 $15,250.000000 Date Shares purchased PRICE PER SHARE Total 05/28/99 500 $7.500000 $3,750.000000 06/04/99 1,000 $6.750000 $6,750.000000 06/04/99 1,000 $7.000000 $7,000.000000 06/07/99 1,000 $6.187500 $6,187.500000 06/15/99 500 $5.937500 $2,968.750000 06/15/99 1,000 $6.000000 $6,000.000000 06/16/99 1,000 $5.468750 $5,468.750000 06/24/99 500 $5.937500 $2,968.750000 07/02/99 1,000 3.031250 3,031.250000 07/07/99 1,000 $5.875000 5,875.000000 07/08/99 1,000 $5.750000 $5,750.000000 07/08/99 1,000 $5.500000 $5,500.000000 07/20/99 2,000 $5.343750 $10,687.500000 07/28/99 2,000 4.187500 $8,375.000000 08/20/99 1,000 $5.500000 $5,500.000000 08/24/99 1,000 $4.875000 $4,875.000000 08/30/99 1,000 $3.937500 $3,937.500000 09/16/99 1,000 $3.750000 $3,750.000000 Totals 29,000 $200,593.750000 On September 27, 1999, Laurents decided to sell four thousand (4,000) shares of his Just for Feet stock for the price of $ 1.875 per share, for a total of $ 7,500.00. Based on the amounts attached to his lead plaintiff certification, Laurents claims a total loss of $ 193,093.75. John Michael. John Michael (“Michael”), like SWIB, can be represented as having purchased Just for Feet common stock in blocks, divisible by periods during which he shed himself of any interest in the company. On March 1, 1999, Michael began his first buying period, during which he purchased 21,850 shares of Just for Feet common stock, all but 2,700 shares of which he sold at a profit during approximately the same period and none of which he sold at a loss. Date Shares purohased PRICE PER SHARE Total 03/01/99 3,500 $10.375000 $36,312.500000 03/01/99 1,300 $10.375000 $13,487.500000 03/01/99 500 $10.312500 $5,156.250000 03/01/99 200 $10.312500 $2,062.500000 03/02/99 200 $11.125000 $2,225.000000 03/02/99 1,300 $11.125000 $14,462.500000 Date SHARES PURCHASED Price per share Total 03/24/99 1,500 $10.437500 $15,656.250000 03/24/99 2,000 $10,437500 $20,875,000000 03/24/99 1,000 $10.437500 $10,437,500000 03/24/99 1,000 $10,437500 $10,437,500000 03/24/99 1,500 $10.437500 $15,656,250000 03/24/99 500 $10,437500 $5,218,750000 04/13/99 1,500 $11,625000 $17,437,500000 04/13/99 1,400 $11,625000 $16,275,000000 04/13/99 450 $11,625000 $5,231.250000 04/13/99p 4,000 $11,625000 $46,500,000000 Totals 21,850 $237,431.250000 From March 22, 1999, until April 23, 1999, he sold each of these shares, apparently in the same blocks in which he purchased them. These sales are detailed below: Date Shares Sold Price per share Total 03/22/99 3,500 $11.312500 $39,593,750000 03/22/99 1,300 $11.312500 $14,706,250000 03/22/99 500 $11,250000 $5,625,000000 03/22/99 200 $11,500000 $2,300,000000 03/22/99 200 $11,500000 $2,300.000000 03/22/99 1,300 $11.125000 $14,462,500000 03/29/99 1,500 $13,500000 $20,250,000000 04/08/99 2,000 $11.625000 $23,250,000000 04/08/99 1,000 $11.562500 $11,562,500000 04/12/99 1,000 $11.187500 $11,187,500000 04/12/99 1,500 $11,125000 $16,687.500000 04/14/99 500 $11.687500 $5,843,750000 04/14/99 1,500 $11,687500 $17,531.250000 04/14/99 1,400 $11.625000 $16,275,000000 04/23/99 450 $11.687500 $5,259.375000 04/23/99 4,000 $13.500000 $54,000,000000 Totals 21,850 $260,834,375000 On the sale of these shares, Michael realized an overall gain of $ 23,403.125. Beginning on April 13, 1999, Michael made the following further investments in Feet stock, none of which turned out to be profitable. Date Shares purchased Price per share Total 04/13/99 50 $11,625000 $581.250000 04/21/99 1,300 $11,875000 $15,437.500000 05/06/99 650 $10,437500 $6,784,375000 05/13/99 4,250 $11.125000 $47,281.250000 05/13/99 450 $11,125000 $5,006,250000 05/20/99 200 $10.500000 $2,100,000000 06/02/99 550 $7.687500 $4,228,125000 Date Shakes purohased Price per share Total 06/24/99 800 8.843700 $7.074.960000 06/24/99 4,200 . 8.843700 $37,143.540000 06/30/99 500 $6.375000 $3,187.500000 06/30/99 4,500 $6,437500 8,968,750000 07/08/99 1,800 $5,875000 $10,575.000000 07/08/99 2,200 $5,937500 $13,062,500000 07/22/99 15,000 $5.250000 $78,750.000000 07/29/99 12,000 $3,437500 $41,250.000000 07/29/99 3,000 $3.406200 $10,218.600000 08/16/99 500 $5.375000 $2,687.500000 08/16/99 1,900 5.343700 $10,153.030000 08/16/99 4,900 $5,125000 $25,112.500000 08/17/99 3,500 $5,375000 $18,812,500000 08/17/99 1,000 5.343700 $5,343.700000 08/23/99 1,100 $5,375000 $5,912,500000 08/23/99 1,400 $5,375000 $7,525,000000 08/23/99 2,000 5.375000 $10,750,000000 08/23/99 6,000 $5.500000 $33,000.000000 Totals 73,750 $430,946.330000 From September 10,1999, through September 22,1999, Michael sold all of these shares, at an alleged substantial loss. Date Shares Sold PRICE PER SHARE Total 09/10/99 50 $4,000000 $200,000000 09/10/99 1,300 $4.000000 $5,200.000000 09/10/99 650 $4,000000 $2,600.000000 09/10/99 4,250 $4.000000 $17,000.000000 09/22/99 450 $1.937500 $871.875000 09/22/99 200 1.937500 $387.500000 09/22/99 550 $1.937500 1,065.625000 09/22/99 800 $1.937500 $1,550.000000 09/22/99 4,200 $1,875000 $7,875.000000 09/22/99 500 $1.875000 $937.500000 09/22/99 4,500 $1.875000 8,437.50000 09/22/99 1,800 $1.875000 $3,375.000000 09/22/99 2,200 $1.875000 $4,125.000000 09/22/99 15,000 $1.875000 $28,125.000000 09/22/99 12,000 $1.875000 $22,500.000000 09/22/99 3,000 $1.875000 $5,625.000000 09/22/99 500 $1.875000 $937.500000 09/22/99 1,900 1.875000 $3,562.500000 09/22/99 4,900 $1.875000 $9,187.500000 09/22/99 3,500 $1.875000 3,562.500000 09/22/99 1,000 $1.875000 $1,875.000000 09/22/99 1,100 $1.875000 $2,062.500000 09/22/99 1,400 $1.875000 $2,625.000000 09/22/99 2,000 1.875000 $3,750.000000 09/22/99 6,000 $1.875000 $11,250.000000 Totals 73,750 $151,687.500000 In all from the purchase and sale of these shares of Feet stock, Michael lost $ 279,-258.83. This loss apparently did not cool Michael’s enthusiasm for Just for Feet stock, however, as one month later, Michael made two purchases of Feet stock totaling 20,200 shares, all of which he continues to hold. Date_SHARES PURCHASED_Prioe per share_Total 10/28/99 2,700_$1.531200_4,134.240000 10/28/99 18,500_$1.500000_ $27,750.000000 Totals 21,200$31,884,240000 In total, Michael currently possesses 20,-200 shares of Just for Feet stock and has losses amounting to $ 311,133.07 William T. Moor. William T. Moor (“Moor”) made the following purchases of Just for Feet common stock during the class period: Date Shares purchased PRICE PER SHARE Total 08/19/97 1,000 $15.750000 $15,750.000000 08/27/98 1,000 $13.000000 $13,000.000000 09/25/98 1,000 $13.000000 $13,000.000000 12/29/98 1,000 $14.500000 $14,500.000000 01/15/99 1,000 $17.375000 $17,375.000000 02/26/99 1,000 $10.250000 $10,250.000000 05/06/99 2,000 3.625000 $21,250.000000 10/18/99 3,000 1,843750 $5,531.2500000 Totals 11,000 $110,656.250000 During the relevant period, then, Moor purchased 11,000 shares of stock. He claims losses of $110,656.25. James A. Taylor. James A. Taylor (“Taylor”) has, since January 20, 1999, twice purchased Just for Feet common stock. Date Shares purchased PRICE PER SHARE Total 01/20/99 10,000 $18.125000 $181,250.000000 02/26/99 10,000 $10.125000 $101,250.000000 Totals 20,000 $282,500.000000 Taylor apparently never sold any of this stock. As such, he claims losses of $ 282,-500.00. Woods Hardware, Inc., Pension Plan. On January 23, 1998, the Woods Hardware, Inc., Pension Plan (“WHIPP”) bought two thousand (2,000) shares of Feet common stock at a per-share price of $ 13.437, paying a total of $ 26.874.00. On March 20, 1998, WHIPP sold those shares at $ 15.00 per share, gaining a profit of $ 3,126.00 on the sale. On September 24, 1998, WHIPP again invested in Feet common stock, this time purchasing two thousand (2,000) shares at a price of $ 13.75 per share, paying in total $ 27,500.00. On November 20, 1988, WHIPP sold these shares, realizing a gain of $ 2,500.00. ■ Beginning on January 22, 1999, WHIPP made further purchases of Feet stock, but this time never sold any of its shares. Date SHARES PURCHASED Price per share Total 01/22/99 8,000 $14.688000 $44,064,000000 02/22/99 2,000 $11.688000 $23,376.000000 05/21/99 5,000 $10.313000 $51,565.000000 07/20/99 4,000 $5.313000 $21,252.000000 Totals 14,000 $140,257.000000 The total amount paid in these later purchases constitutes WHIPP’s total losses. The Group, broadly conceived, consists of almost three hundred individuals and institutions. Other than the fact that they have all purchased shares of Just for Feet common stock, nothing unites them into a common whole. There is nothing to indicate that all three hundred have ever communicated among themselves regarding this litigation or that the three hundred have, with unanimous or majority voice, directed proposed counsel for the Group to perform or not perform any act. There is no indication that the three hundred have elected the twelve-person “steering committee” to represent their unified interest. The Group, defined as consisting of the three hundred purchasers, is simply an agglomeration consisting of those individuals who either responded to newspaper articles about this action or to a notice broadcast by purported counsel concerning this litigation. In short, the Group is a welter, and nothing more. Contentions & Analysis The motions presently under consideration require application of one of a number of amendments to the Exchange Act put in place by the 1995 Reform Act: As has been consistently noted by the circuit and district courts endeavoring to apply those amendments, the Reform Act was enacted in 1995 in response to observed widespread abuses of the federal securities laws in the filing of class actions. See Greebel v. FTP Software, Inc., 194 F.3d 185, 191 (1st Cir.1999) (“The enactment of the [Reform Act] in 1995 marked a bipartisan effort to curb abuse in private securities lawsuits....”); In re Comshare Inc. Securities Litigation, 183 F.3d 542, 548 (6th Cir.1999) (reiterating that the purpose of the Reform Act was to put anti-abuse mechanisms in place in federal securities fraud litigation); In re Silicon Graphics Inc. Securities Litigation, 183 F.3d 970, 978 (9th Cir.1999) (noting that “Congress designed the [Reform Act] to deter non-meritorious lawsuits by creating procedural barriers” to suit); Mitchell v. Complete Management, Inc., 1999 WL 728678 at *2 (S.D.N.Y.1999) (“In 1995, Congress enacted the [Reform Act] in response to perceived abuses in securities fraud class actions.”); King v. Livent, Inc., 36 F.Supp.2d 187, 190 (E.D.N.Y.1999) (“According to its legislative history, the [Reform Act] was enacted in response to perceived abuses of the class action procedure.”); In re Oxford Health Plans, Inc. Securities Litigation, 182 F.R.D. 42, 43 (S.D.N.Y.1998) (same); and Fischler v. AMSouth Bancorpomtion, 1997 WL 118429 at *1 (M.D.Fla.1997) (same). To Congress, the 1980’s and the early 1990’s had seen a proliferation of “strike suits” — class actions initiated and driven by attorneys, the principle goals of which were to obtain settlements favorable to those attorneys, rather than to benefit arguably aggrieved shareholders. See Greebel v. FTP Software, Inc., 194 F.3d at 191; In re Network Associates, Inc., Securities Litigation, 76 F.Supp.2d 1017, 1032 (N.D.Cal.1999); Harford County, MD v. Mid-State Bank & Trust, 1999 WL 704116 at *2 (W.D.Pa.1999); and Tyrone Area School District v. Mid-State Bank & Trust Co., 1999 WL 703729 at *3 (reciting testimony of the Committee on Banking, Housing and Urban Affairs that “ ‘today certain lawyers file frivolous ‘strike’ suits alleging violations of Federal securities laws in the hope that defendants will quickly settle to avoid the expense of litigation.’ ” (internal citations omitted)). Congress noted that often, when the release of news that misfortune had befallen a target company caused an drop in the value of that company’s stock, one or more strike suits would be filed within the same day, containing superfluous allegations that demonstrated little prior investigation by counsel. See Harford County, MD v. Mid-State Bank & Trust, 1999 WL 704116 at *2; and Lirette v. Shiva Corp., 27 F.Supp.2d 268, 274 (D.Mass.1998). See also the Senate Report on the Reform Act, S.Rep. No. 98, 104th Congress, 1st Sess. 8, reprinted in 1995 U.S.C.C.A.N. 679, 687 (the “Senate Report”) (“One study con-eluded that, in the early 1980’s, every company in one business sector that suffered a market loss of $ 20 million or more in its capitalization was sued.”). A telling example of this practice is recounted by a pair of commentators writing on the heels of the Reform Act’s passage: A typical example involved Philip Morris. On the morning of Friday, April 2, 1993, Philip Morris announced a forty-cent reduction in the price of a pack of Marlboro cigarettes. It anticipated that, as a result, operating earnings for 1993 would be down as much as forty percent. Less than five hours later, at 1:25 p.m., a class suit was filed. Four more suits were filed the same day. On Monday, April 5, five additional suits were commenced, bringing the total number of class actions to ten within three days. The court noted caustically that in the few hours counsel devoted to getting the initial complaints to the courthouse, overlooked was the fact that two of them contained identical allegations, apparently lodged in counsel’s computer memory of ‘fraud’ form complaints, that the defendants here engaged in conduct ‘to create and prolong the illusion of [Philip Morris’] success in the toy industry.’ Richard M. Phillips and Gilbert C. Miller, The Private Securities Litigation Reform Act of 1995: Rebalancing Litigation Risks and Rewards for Class Action Plaintiffs, Defendants and Lawyers, 51 Bus.Law. 1009, 1011-12 (1996). Thus the perception had developed that securities plaintiffs’ attorneys had hijacked the law governing securities fraud, see Greebel v. FTP Software, Inc., 939 F.Supp. 57, 58 (D.Mass.1996), turning the federal courts into instruments through which to extract large settlements. The process of extraction was viewed by Congress as being relatively cost-free for plaintiffs’ counsel — hastily drafted and barely researched complaints would cost such counsel little and settlement, often cheaper for the defendant companies than discovery and legal fees, would normally be forthcoming long before any costly work commenced. Indeed, it appeared that the only prerequisite to being a successful — that is, profitable-plaintiffs’ attorney specializing in securities litigation was the ownership of a good pair of running shoes, as generally only the first attorney to file at the courthouse would win the “privilege” of maintaining the securities class action. See In re Milestone Scientific Securities Litigation, 188 F.R.D. 404, 412 (D.N.J.1998); and Conference Report on Securities Litigation Reform, H.R.Rep. No. 369, 104th Congress, 1st Sess. 31, reprinted in 1995 U.S.C.C.A.N. 679, 689 (the “Conference Report”). The absolute control exercised by plaintiffs’ attorneys over the class securities litigation process was apparent at each stage of litigation. Further, because of their extensive control over class actions, counsel could wrest from target companies bloated settlements that were strong on attorneys’ fees, but light on shareholder compensation. The Senate Report highlighted Congress’s concern over this problem: Under the current system, the initiative for filing 10b-5 suits comes almost entirely from the lawyers, not-from genuine investors. Lawyers typically rely on repeat, or “professional,” plaintiffs who, because they own a token number of shares in many companies, regularly lend their names to lawsuits. Even worse, investors in the class usually have great difficulty exercising any meaningful direction over the case brought on their behalf. The lawyers can decide when to sue and when to settle, based largely on their own financial interests, not the interests of their purported clients. Numerous studies show that investors recover only 7 to 14 cents for every dollar lost as a result of securities fraud. Indeed, a 1994 Securities Subcommittee Staff Report found “evidence *** that plaintiffs’ counsel in many instances litigate with a view toward ensuring payment for their services without sufficient regard to whether their clients are receiving adequate compensation in light of evidence of wrongdoing.” The comment by one plaintiffs’ lawyer — “I have the greatest practice of law in the world. I have no clients.” — aptly summarizes this flaw in the current system. Senate Report at 6, 1995 U.S.C.C.A.N. at 685 (internal footnotes omitted). Thus, as stated by one district court, class securities litigation had become “typically initiated and controlled by plaintiffs counsel, bark to core, start to finish.” In re Network Associates, Inc., Securities Litigation, 76 F.Supp.2d at 1020. In arguably meritorious cases, the shareholders were ill-represented by attorneys whose recoveries were adequate only to compensate the attorneys themselves. In the more frivolous actions, the harm caused to shareholders was more egregious, as those shareholders were indirectly required to foot the substantial legal bills of counsel retained only nominally on their behalf. One cause of the ascendance of counsel-driven securities class litigation was seen to be the relative inability or unwillingness of named plaintiffs in such cases to oversee the activities of their attorneys. See Sa-khrani v. Brightpoint, Inc., 78 F.Supp.2d 845, 850 (S.D.Ind.1999) and In re Milestone Scientific Securities Litigation, 187 F.R.D. 165, 174 (D.N.J.1999) (“Milestone II”) (stating that “[o]ne objective of the [Reform Act] was to ensure more effective representation of the interests of investors in private securities class actions”). This lack of oversight was largely attributed to attorneys’ “employment” of so-called “professional plaintiffs,” the proliferation of whom “made it particularly easy for lawyers to find individuals willing to play the role of wronged investor for purposes of filing a class action lawsuit.” Senate Report at 10, 1995 U.S.C.C.A.N. at 689. See King v. Livent, Inc., 36 F.Supp.2d 187, 190 (S.D.N.Y.1999); Milestone I, 183 F.R.D. at 411; and Greebel v. FTP Software, Inc., 939 F.Supp. at 61. The district court in In re Telxon Corporation Securities Litigation, 67 F.Supp.2d at 814, described the problems caused by permitting “professional plaintiffs” to act as representative plaintiffs in securities fraud litigation: Reference to the academic literature in existence at the time the [Reform Act] was passed is useful in understanding the evil Congress perceived and the problems it sought to address with the Act. The problem with “professional plaintiffs” stems from their relatively nominal interest in securities class action litigation vis a vis the relatively large interest at stake for their attorney. Whereas the plaintiff with only a few shares of stock might have suffered loss- . es amounting to no more than one hundred dollars, even less in some instances, the attorney’s interest generally is much greater because of the aggregation of all claims in the class. This divergence of financial interests creates significant agency costs on a lead plaintiff with respect to his ability to monitor the attorney’s conduct during the prosecution of a securities class action. As professors Weiss and Beckerman explain: [A] named plaintiff who has only a nominal financial interest in a class action, especially a plaintiff that an attorney has “recruited,” is unlikely to monitor effectively her attorney’s prosecution of the action or the terms on which her attorney recommends that the action be settled. Indeed, attorneys generally can influence strongly, if not control, the terms on which their clients agree to settle suits other than class actions because an attorney’s knowledge about the law and how it applies to the facts almost always is superior to that of her client. In other kinds of litigation, however, a lawyer’s ability to succeed often will depend to some degree on her client’s cooperation. Moreover, the client, in principle if not in fact, retains the power to accept or reject any settlement her lawyer recommends. The client also has the power to bargain with her lawyer, in advance, about the terms on which the lawyer will be compensated. None of these constraints is present when class actions are settled. Plaintiff’s attorneys typically do not rely on named plaintiffs for vital testimony, do not bargain with named plaintiffs over the fees they will be paid, and do not require named plaintiffs’ approval of the terms on which they propose to settle class actions. [Elliot J. Weiss and John S. Beckerman, Let the Money Do the Monitoring: How Institutional Investors Can Reduce Agency Costs in Securities Class Actions, 104 Yale L.J. 2053, 2065 (1995) ] (internal footnotes omitted). In addition, “[mjembers of the plaintiff class in a large class action or shareholder’s derivative suit often have claims so small that the litigation is a matter of relative unimportance to them. Even though the claims in the aggregate may be very large, the small size of the individual claims creates enormous free-rider effects: no rational plaintiff would take on the role of litigation monitor because she would incur all the costs of doing so but would realize only her pro rata share of the benefits.” Jonathan R. Macey and Geoffrey P. Miller, The Plaintiffs’ Attorney’s Role in Class Action and Derivative Litigation: Economic Analysis and Recommendations for Reform, 58 U.Chi. L.Rev. 1, 19-20 (1991). “These collective action and free-rider effects allow the plaintiffs’ attorney in class and derivative cases to operate with nearly total freedom from traditional forms of client monitoring.” Id. at 20. The Third Circuit echoed this concern in a pre-[Reform Act] derivative action, “[sjhareholders with well-diversified portfolios or small holdings lack the incentive and information to police settlements—the costs of policing typically outweigh any pro rata benefits to the shareholder.” Bell Atlantic Corp. v. Bolger, 2 F.3d 1304, 1309 (3d Cir.1993). See also id. at 1309 n. 9 (“Generally, the costs of monitoring will exceed the pro rata benefit to any single shareholder even though they may be lower than the benefits to all”). In response to the problems apparently engendered by the presence of professional plaintiffs unable and unwilling to control class counsel in securities fraud litigation, Congress enacted the lead plaintiff provisions of the Reform Act. Section 21D of the Exchange Act, as amended by the Reform Act, requires that a district court “appoint'as lead plaintiff the member or members of the purported plaintiff class that the court determines to be most capable of adequately representing the interests of class members_” 15 U.S.C. § 78u-4(a)(3)(B)(i). Rather than selecting as the governing plaintiff in a securities class action the first plaintiff to reach the courthouse door, the district court is to choose the most adequate plaintiff to oversee the litigation. Appointment of the most adequate plaintiff is meant to empower investors by placing behind the driver’s seat on the plaintiffs’ side an experienced investor or capable investors who have substantial and genuine interests in the outcome of the litigation. See In re Telx-on Corporation Securities Litigation, 67 F.Supp.2d at 815 (“The effect of this provision is to place the leadership of the class in the hands of a plaintiff who has suffered a large enough pro rata loss that he will benefit from monitoring his attorneys’ conduct.”); and In 're Party City Securities Litigation, 189 F.R.D. 91, 103 (D.N.J.1999) (“Specifically, the [Reform Act] provides a method for identifying the plaintiff or plaintiffs who are most strongly aligned with the class of shareholders, and most capable of controlling the selection and activities of counsel.”). However, the aftermath of the Reform Act’s enactment has not seen the widespread changes hoped for by Congress. Rather, counsel, attempting to get around the barricades placed before them by the Reform Act, have taken to publishing notices imploring large numbers of class members to respond and utilizing those responses to create large plaintiffs’ groups. The district court in In re Network Associates, Inc., Securities Litigation, 76 F.Supp.2d at 1021-22, provides an insightful description of this practice, which bears many similarities to the approaches taken by counsel in the instant action: Since 1995 when the [Reform Act] was approved, there have, in fact, been some instances of large institutional investors advancing themselves and being selected as lead plaintiffs. E.g., Gluck v. CellS-tar Corporation, 976 F.Supp. 542 .(N.D.Tex.1997) (appointing. State of Wisconsin Investment Board). For the most part, however, a different pattern altogether has developed, one that remarkably resembles the old regime. As was true before the [Reform Act], in the wake of a substantial drop in any pub-lically-traded stock, dozens of class suits are typically filed. Unlike before, however, the [Reform Act] requires the plaintiff in the first-filed suit to publish the statutory initial notice to invite lead plaintiff candidates to step forward. Although this notice was expected by Congress to be published once and to encourage uninvolved investors to come forward and to compete for the lead role, the notices in practice extol the lawyer filing suit, and invite the investor to fill out a form and return it to the lawyer. Each lawyer competes to accumulate as many forms as possible in order to amass the largest “group” possible. Not only does the first counsel to file give notice but so do many other lawyers filing suit, not once but over and again, all in an effort to compile the largest portfolio of investor names. The race to the courthouse has been replaced by a race to both the courthouse and thence to the publisher. The [Reform Act] did not authorize or contemplate such a process. Instead, it called for notice to affected investors so they could decide whether to seek the role of lead plaintiff on their own. In practice, however, the real purpose and effect of the forms is to steer investors away from seeking the lead role on their own and to steer them toward registering with a lawyer who already has a lead plaintiff candidate. One of the forms used in this case, for example, states in part that the investor has reviewed the complaint and “If necessary, I authorize the filing of a similar complaint on my behalf. *** I am willing to serve as a representative party on behalf of the class, including providing testimony at deposition and trial, if necessary.” The form does not specifically state that the investor wishes to take on the responsibility for being the lead plaintiff, nor does it specifically authorize and retain any particular counsel to seek such a responsibility on their behalf. To the extent an investor truly seeks the role of lead, a legitimate question arises whether one law firm (or single set of law firms) could represent all of them without irreconcilable conflicts, given that not every candidate could be advanced and counsel would have to dash the hopes of one or more seeking the job. The forms make no disclosure of this problem. Nor do they include a waiver of any conflict. This form-submitting process bears a resemblance to the claim-submitting process that traditionally has occurred at the end of class litigation. The only information required to be written in by the investor in the form mentioned was the name of the investor and the number of shares purchased or sold, the price, and the date. The rest is boilerplate. In this connection, one class counsel candidate herein accuses another of disguising its notices so as to cause investors to believe that returning the form is a prerequisite to participation in any ultimate recovery — when it plainly is not under the law. No doubt, many send in the forms thinking they need to in order to participate in any recovery. When the motions to appoint lead counsel are made, as here, these forms are then bound into numerous thick booklets as alleged documentary support for counsel’s motion on behalf of a group of movants, as has been done in this case. Counsel argue that the group as a whole has a large stake in the outcome — therefore, the group should be the presumptive lead plaintiff. The only thing the investors in any group have in common, however, is the lawyer. They have no link to each other. They are not organized with any group decisionmaking apparatus. They attended no org