Broker-Dealer Litigation - Greenberg Traurig LLP

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In re IMAX Sec. Litig., 2011 WL 1487090 (S.D.N.Y. Apr. 15, 2011).
In a putative securities fraud class action, the district court considered two competing
motions for appointment as substitute lead plaintiff filed by a pension fund and an investment
fund. The court had reopened the lead plaintiff selection process for a second time after the first
two lead plaintiffs had been removed. The court found that the investment fund had the greatest
financial stake in the outcome of the case due to its greater losses during the class period and,
thus, was presumptively the most adequate lead plaintiff. The pension fund attempted to rebut
the presumption by arguing that the investment fund was subject to unique defenses. First, the
court rejected the argument that the investment fund’s assertion of claims violated New York’s
anti-champerty statute. The fund had originally assigned its claims to its investment advisor,
who served as the first lead plaintiff in the case, and the investment advisor had now reassigned
the fund’s claims back to the fund. The court found that this reassignment of the fund’s own
claims hardly violated the anti-champerty statute, which was designed to “curtail the
commercialization of litigation.” Next, the court found that the fund’s sophisticated mergerarbitrage
investment strategy did not subject it to unique defenses because the strategy was not
“reliant upon the proposition that the market is inefficient.” Finally, the court summarily
rejected as irrelevant the pension fund’s argument that it was a more appropriate lead plaintiff
because some of its purchases of the defendant company’s stock pre-dated the fund’s purchases.
After finding that the fund met the requirements of Fed. R. Civ. P. 23, the court appointed it lead
plaintiff and approved its choice of lead counsel, which replaced prior lead counsel.
Kokkinis v. Aegean Marine Petroleum Network, 2011 WL 2078010 (S.D.N.Y. May 19, 2011).
In a putative securities fraud class action, the district court granted an individual
investor’s motion for appointment as lead plaintiff. The court found that the individual met the
requirements of Fed. R. Civ. P. 23 because his claim arose from the same course of events as
other class members and each class member made similar arguments with minor factual
variations to prove defendants’ liability. The court further found that the movant was likely to
fairly and adequately represent the interests of the class based on the unchallenged
representations in his certification. Accordingly, the court appointed the individual investor as
lead plaintiff and approved his choice of counsel.
In re Weatherford Int’l Sec. Litig., 2011 WL 2652443 (S.D.N.Y. Jul. 6, 2011).
In a putative securities fraud class action, the district court denied “unusual” motions for
reconsideration filed by “disgruntled applicants for lead plaintiff.” While the movants alleged
that the appointed lead plaintiff had misled the court about its financial interest in the outcome of
the litigation, the court found that the movants essentially disagreed with the court’s method of
calculating potential recovery. The court found that the movants had not raised any new issues
that were overlooked by the court or that could not have been discussed when the court
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