Broker-Dealer Litigation - Greenberg Traurig LLP

appointed a lead plaintiff. The court also noted that the choice of method used to determine
financial loss is a context-specific determination within the discretion of the court. Next, the
court rejected the argument that the appointed lead plaintiff was inappropriate to represent the
class because it had not yet filed papers with the Multi-District Litigation (“MDL”) panel that
was considering whether to consolidate the action with another class action pending in
California. The court found that this was not a proper basis for a motion for reconsideration and
the proceedings before the MDL panel were likely moot, given that the California class action
was to be voluntarily withdrawn. Accordingly, the court denied the motions for reconsideration.
Quan v. Advanced Battery Tech., Inc., 2011 WL 4343802 (S.D.N.Y. Sept. 9, 2011).
In a consolidated securities fraud class action, the district court considered two competing
motions for appointment as lead plaintiff filed by individual investors. The court found that the
movant who held the largest number of retained shares at the end of the class period was the
presumptive most adequate lead plaintiff because he had the largest potential recoverable losses.
The court rejected the argument that sales of securities during the class period and prior to
disclosure of the alleged fraud undermined the presumptive lead plaintiff’s adequacy to represent
the class. Despite sales of stock during the class period, the presumptive lead plaintiff had
retained more than double the number of shares retained by the competing movant and, thus, had
undisputedly suffered the greatest financial losses of any of the competing movants.
Accordingly, after finding that the presumptive lead plaintiff met the requirements of Fed. R.
Civ. P. 23, the court appointed him lead plaintiff and approved his selection of counsel.
Teran v. Subaye, Inc., 2011 WL 4357362 (S.D.N.Y. Sept. 16, 2011).
After consolidating two related putative securities fraud class actions, the district court
considered four competing motions for appointment as lead plaintiff filed by three separate
individual investors and a group of investors. While the court found that the investor group had
the greatest financial interest, the court further held it inappropriate to aggregate the group’s
losses because the group had not demonstrated that it would be able to act cohesively and
effectively manage the litigation apart from its lawyers. Except for two brothers, the group had
no pre-existing relationship. Moreover, the group failed to provide specifics regarding its plans
for communication and decision-making or past activities. The court also noted that a competing
individual movant had a significantly greater financial interest than any of the members of the
group, even if the court were to consider the two brothers together. The court rejected an
argument that the individual movant did not have standing to assert claims based on all the
shares reflected in his certification because he had submitted a declaration reaffirming that all the
shares at issue had been purchased for his own account. Accordingly, after finding that the
individual movant satisfied the requirements of Fed. R. Civ. P. 23, the court appointed him lead
plaintiff and approved his choice of counsel.
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