Private Securities Litigation Reform Act

The Private Securities Litigation Reform Act (PSLRA) is a law enacted in 1995 to improve the quality of securities fraud lawsuits. It sets stricter rules to prevent frivolous or manipulative claims, including requiring plaintiffs to specify their allegations more clearly, and appointing independent experts to investigate allegations before a case proceeds. The goal is to balance protecting investors from genuine fraud while reducing unnecessary legal costs and abuse by 'strike suits'—lawsuits that lack factual basis. Overall, it aims to make securities litigation fairer, more focused, and more efficient.