Tuesday, June 14, 2005

Court Interprets Dura in Appointing Group as Lead Plaintiff

Rejecting arguments that two proposed independent lead plaintiffs can not move together for appointment, Judge Harold Baer (S.D.N.Y.) has granted lead plaintiff status to a group of movants in the Mamma.com action. Judge Baer also found that the movants’ “in-and-out” purchases did not disqualify them from serving as lead plaintiffs. Finally, the court stated that “in accordance with the PSLRA, Dura Pharmaceuticals, Inc. v. Broudo, 125 S. Ct. 1627, 1631 (2005), and Lentell v. Merrill Lynch & Co., Inc., 396 F.3d 161, 174 (2d Cir. 2005), plaintiffs need only allege that the misstatement or omission concealed something from the market that, when disclosed, negatively affected the value of the security, and loss causation does not require full disclosure and can be established by partial disclosure during the class period which causes the price of shares to decline.” Milberg Weiss and Cohen Milstein were appointed co-lead counsel. The decision is available at 2005 U.S. Dist. Lexis 10224.

Nugget: “[T]he Witkowski-Mamma.com Group demonstrated that the lead plaintiff, and other class members, purchased a substantial portion of their securities before the April 6, 2004 disclosure of the alleged fraud, sold a substantial portion of their shares after the April 6, 2004 disclosure of the alleged fraud and, therefore, can allege that ‘the subject of the fraudulent statement or omissions was the cause of the actual loss suffered’ and, therefore, satisfy the tests articulated by the Supreme Court in Dura and the Second Circuit in Lentell.”

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