Broker-Dealer Litigation - Greenberg Traurig LLP

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Vandevelde v. China Natural Gas, Inc., 277 F.R.D. 126 (D. Del. Aug. 12, 2011).
In a putative securities fraud class action, the district court considered two competing
motions for appointment as lead plaintiff after the court had initially denied both movants’
motions and ordered each to submit supplemental briefs detailing information regarding their
efforts to retain counsel and negotiated fee arrangements. The court first determined that the
movant with the greatest losses during the class period was presumptively the most adequate lead
plaintiff. The competing movant attempted to rebut the presumption by arguing that frequent
contact with the defendant company’s public relations and investor relations firm subjected the
presumptive lead plaintiff to a unique non-reliance defense. The competing movant also argued
that the presumptive lead plaintiff’s credibility was in question given his various postings on
Yahoo! message boards regarding the defendant company. The court rejected the former
argument because there was no substantial proof that the presumptive lead plaintiff had received
any non-public information. The court rejected the latter argument because the movant did not
carry his burden of establishing that the posts reflected poorly on the presumptive lead plaintiff’s
credibility. 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 choice of lead and
liaison counsel.
Burgraff v. Green Bankshares, Inc., 2011 WL 613281 (E.D. Tenn. Feb. 11, 2011).
In a putative securities fraud class action, the court considered competing motions for
appointment as lead plaintiff filed by two groups of investors, one led by Mr. Molnar and another
led by Mr. Blomgren. The court found that Blomgren’s group had the largest financial interest in
the outcome of the case considering: (i) the number of shares purchased during the class period;
(ii) the number of net shares purchased during the class period; (iii) the total net funds expended
during the class period; and (iv) the amount of loss suffered. Specifically, Blomgren’s group had
purchased a greater number of shares and expended more funds than Molnar’s group. While
both groups appeared to have nearly identical losses, Blomgren actually had suffered a greater
financial loss once differences with respect to the average daily share price used to calculate
losses were considered. Thus, the court found Blomgren’s group was presumptively the most
adequate lead plaintiff. Accordingly, after finding that Blomgren’s group satisfied the
requirements of Fed. R. Civ. P. 23, the court appointed the group lead plaintiff and approved its
choice of counsel.
Norfolk County Ret. Sys. v. Cmty. Health Sys., Inc., 2011 WL 6202585 (M.D. Tenn. Nov. 28,
2011).
After recommending that three related putative securities fraud class actions should be
consolidated, the magistrate judge considered two competing motions for appointment as lead
plaintiff filed by a group of related New York City funds (the “NYC Funds”) and a group
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