Broker-Dealer Litigation - Greenberg Traurig LLP

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Faris v. Longtop Fin. Techs. Ltd., 2011 WL 4444176 (S.D.N.Y. Sept. 22, 2011).
In a putative securities fraud action, the court considered competing motions for
appointment as lead plaintiff filed by two groups of investors. The court found that one of the
groups which included an investment manager had the largest financial interest in the suit and,
thus, was presumptively the most adequate lead plaintiff. The court found that the investment
manager had standing to assert the claims at issue because there had been a valid assignment by
underlying shareholders. The court found that the assignment did not violate New York’s antichamperty
statute because the statute does not apply to assignments made for the collection of
legitimate claims. The court further found that the competing investor group would not be an
adequate lead plaintiff because three of its members had purchased the bulk of their shares after
certain public disclosures of the alleged fraud. The court also expressed concern that one
member of the competing group was involved in an ongoing lawsuit where it was accused of
having knowingly profited from a Ponzi scheme. Accordingly, after finding that the presumptive
lead plaintiff met the requirements of Fed. R. Civ. P. 23, it appointed that group lead plaintiff and
approved its choice of counsel.
Plumbers, Pipefitters & MES Local Union No. 392 Pension Fund v. Fairfax Fin. Holdings Ltd.,
2011 WL 4831209 (S.D.N.Y. Oct. 12, 2011).
In a putative securities class action, the district court granted an unopposed motion for
appointment as lead plaintiff filed by a pension fund. The court concluded that the pension
fund’s losses rendered it suitable as a lead plaintiff since the court did not have financial
information about any of the other class members. Accordingly, after finding that the pension
fund met the typicality and adequacy requirements of Fed. R. Civ. P. 23, the court appointed it
lead plaintiff and approved its selection of co-lead counsel.
Canson v. WebMD Health Corp., 2011 WL 5331712 (S.D.N.Y. Nov. 7, 2011).
In a securities fraud class action, the district court considered three competing motions
for appointment as lead plaintiff. The court determined that a proposed lead plaintiff group
comprised of a retirement system and a pension fund had the largest financial interest in the
outcome of the case utilizing the LIFO method of calculating losses and was presumptively the
most adequate lead plaintiff. The court rejected a competing movant’s argument that the group’s
losses should not be aggregated. The court found no evidence that the group members’
combined litigation efforts were in bad faith, the two members had a pre-existing relationship,
and they had affirmed their intention to work together on behalf of the class. Moreover, the
court noted that each member of the group had incurred significantly higher losses than any other
competing movants. Accordingly, after finding that group satisfied the typicality and adequacy
requirements of Fed. R. Civ. P. 23, the court appointed it lead plaintiff and approved its selection
of lead counsel.
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