So here’s the situation confronting you in the First Bancorp securities class action. You have an institutional investor (Plumbers and Pipefitters Local 51 Pension Fund) and two individuals (Robert Fox and Marquita McLaughlin ) fighting over the Lead Plaintiff spot. The individuals lost $30,045 and $169,200, but the fund lost a paltry $2000. Appoint the individuals, right? Not so fast there McGraw, seems Judge Jed S. Rakoff (S.D.N.Y.) has other plans.
You see, "after conducting in-court interviews of Fox and McLaughlin," (who wouldn’t want to fly from sunny Puerto Rico to NYC in the middle of winter?) "the Court became acutely aware that McLaughlin has very little investment expertise and virtually no prior experience with litigation of this kind. Moreover, her First BanCorp holdings were limited to preferred stock," and "although Dr. Fox has more relevant experience, his investment in First BanCorp occurred under circumstances that may give rise to 'special defenses' in his case." (neither you or the Defendants get to know what those are because they were filed under seal).
"On the other hand, while the Pension Fund has the expertise to prosecute the litigation in the manner contemplated by the PSLRA, the small size of its loss may diminish its incentive to carry out that function vigorously. Also, there are special defenses that may be raised against the Pension Fund different from those that may be raised against Fox and McLaughlin." (yep, those are under seal too).
Solution? Well, "under the unusual circumstances here presented, the Court concludes that all three proposed lead plaintiffs should be appointed co-lead plaintiffs and that their respective counsel should function as co-lead counsel in the prosecution of the class action."
You can read Plumbers and Pipefitters v. First Bancorp, issued January 14, 2006, at 2006 U.S. Dist. LEXIS 1079.
Nugget: "The Court has no doubt… that the combination of Fox, McLaughlin, and the Pension Fund could collectively fulfill the functions of lead plaintiff in a fair, adequate, and effective manner."