Sept. 21 (Bloomberg) -- The U.S. Securities and Exchange Commission will hold public hearings next year to examine whether shareholder lawsuits are making U.S. companies less competitive, hurting investors.

The SEC plans the roundtable forums on private securities litigation next spring, agency spokesman John Nester said in an interview today.

The effects of securities litigation on ``U.S. capital markets, shareholder value and investor protection are significant ones,'' SEC Chairman Christopher Cox, a Republican, said in a statement. The forums will provide ``the opportunity to learn what, if any, further specific actions might be warranted by these topics,'' he said.

Three studies released in the past year have warned that Wall Street's status as the world's financial center is threatened by excessive litigation costs and regulation. U.S. Treasury Secretary Henry Paulson convened a summit on the topic in March.

Last month, a group of academics wrote the SEC urging a review of whether lawsuits deter fraud. The agency should ask if litigation should only target individuals and what limits should be placed on monetary damages for companies, wrote the group of six legal scholars, led by Georgetown University Law Professor Donald Langevoort.

Best System?

``Because we have doubts that the current system is the best the United States can do and believe the U.S. must do the best it can at investor protection, we urge the SEC to take a leadership role in studying this issue,'' Langevoort wrote.

While no agenda has been set for the SEC meetings, the agency plans to draw from the topics outlined in Langevoort's letter, Nester said.

``I'd hate to see the discussion skewed in the wrong direction,'' said former SEC Commissioner Harvey Goldschmid, who's now a law professor at Columbia University in New York. ``The commission has traditionally talked about private litigation as essential to the effective functioning of the securities laws and this policy sentiment, hopefully, will drive any review of the litigation process.''

Corporate costs to settle U.S. securities litigation rose 82 percent last year to a record $17.2 billion, according to Cornerstone Research, a consulting firm that tracks legal trends.

Lawyers filed 110 suits on behalf of shareholders in 2006, the fewest in more than 10 years, according to the Stanford Law School Securities Clearinghouse.

Cox, 54, represented California as a Republican congressman for 17 years before joining the SEC in August 2005. During his service in the U.S. House, he was an author of the Securities Litigation Reform Act, which made it harder for investors to sue for misconduct.

President Bill Clinton vetoed the law because he said it would make it too difficult for plaintiffs to bring legitimate lawsuits. The 1998 measure became the first legislation to be enacted over Clinton's objections when the House and Senate overrode the veto.

To contact the reporter on this story: Jesse Westbrook in Washington at jwestbrook1@bloomberg.net.

Last Updated: September 21, 2007 18:35 EDT