Deangelis v. Corzine

310 F.R.D. 230
CourtDistrict Court, S.D. New York
DecidedOctober 14, 2015
DocketNo. 11 Civ. 7866(VM)
StatusPublished
Cited by9 cases

This text of 310 F.R.D. 230 (Deangelis v. Corzine) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Deangelis v. Corzine, 310 F.R.D. 230 (S.D.N.Y. 2015).

Opinion

[232]*232 DECISION AND ORDER

VICTOR MARRERO, District Judge.

Plaintiff the Government of Guam Retirement Fund (“Guam” or “Plaintiff’) brought this action on behalf of a potential class (the “Proposed Class”) of investors in 6.25% Senior Notes of MF Global Holdings Limited (“MF Global”) between August 8, 2011 and November 21, 2011 (the “Class Period”) against defendants Jefferies & Company, Inc., Lebenthal & Co., LLC, Natixis Securities North America, Inc., Sandler O’Neill & [233]*233Partners, L.P., and U.S. Bancorp Investments, Inc. (collectively, the “Senior Notes Underwriters” or “Defendants”). Guam alleges violations of Section 11 of the Securities Act of 1933 (the “Securities Act”), 15 U.S.C. § 77k (“Section 11”) and Section 12(a)(2) of the Securities Act, 15 U.S.C. § 111 (“Section 12(a)(2)”).

Guam, along with other plaintiffs no longer a part of this action, filed its original motion for class certification in September 2014. Since then, a number of settlements have narrowed the claims and parties in this case. Guam is the only named plaintiff in the original action to have purchased the 6.25% Senior Notes, and the only remaining causes of action are Securities Act claims against the Senior Notes Underwriters.

Guam now moves, pursuant to Rule 23 of the Federal Rules of Civil Procedure (“Rule 23”), to certify the Proposed Class consisting of:

All persons and entities who purchased or otherwise acquired the Senior Notes issued under the Company’s Posh-Effective Amendment No. 1 to Registration Statement No. 333-162119, dated February 24, 2010, and prospectuses filed in connection therewith (collectively, the ‘Offering Documents’) between August 8, 2011 and November 21, 2011 (including persons and entities who placed orders before August 8, 2011) (the ‘Class Period’) and were damaged thereby.1

Plaintiffs Reply Memorandum of Law in Support' of Motion for Class Certification, dated September 10, 2015. (“PL Reply Mem.”) (Dkt. No. 995 at 1.)

Guam also moves pursuant to Rule 23 for the Court to appoint it as class representative and to appoint Bernstein Litowitz Berger & Grossmann LLP (“Bernstein Litow-itz”) and Bleiehmar Fonti Tountas & Auld LLP (“Bleiehmar Fonti”) (collectively, “Proposed Class Counsel”) as Co-Lead Class Counsel. (PI. Reply Mem. at 1, Dkt. No. 995.)

The Court has reviewed the parties’ submissions regarding this matter.2 For the reasons discussed below, the Court finds that the Proposed Class satisfies all of the requirements of Rule 23(a) and the pertinent requirements of Rule 23(b). This Class is subject to further adjustment or decertification if warranted as facts develop. The Court further finds that Proposed Class Counsel satisfy the pertinent requirements of Rule 23(g). Accordingly, Plaintiffs motion for certification of the Proposed Class and appointment of Guam as class representative and the Proposed Class Counsel as Co-Lead Class Counsel is GRANTED.

I. BACKGROUND

The Court outlined in detail the factual background of this case in its previous Decision and Order denying Defendants’ motion to dismiss, In re MF Global Holdings Ltd. Sec. Litig., 982 F.Supp.2d 277 (S.D.N.Y.2013), and assumes familiarity with the facts of the case as stated in that Decision.

[234]*234The claims here arise from Defendant’s underwriting of MP Global 6.25% Senior Notes issued in early August 2011 and due August 8, 2016 (the “Senior Notes Offering” or the “6.25% Senior Notes Offering”). Guam purchased those securities in the months leading up to the October 2011 collapse of MF Global, an event that the Court has likened to a “train wreck” in its suddenness and the scope of its impact. Id. at 288. Upon MF Global’s disintegration and bankruptcy on October 31,2011, the Senior Notes became worthless. Guam asserts that the Offering Documents for MF Global’s 6.25% Senior Notes, underwritten by Defendants, contained untrue statements and omissions of material fact related to: 1) MF Global’s failure to record a valuation allowance against its Deferred Tax Assets (“DATs”) as required by Generally Accepted Accounting Practices (“GAAP”); and 2) MF Global’s proprietary investments in European sovereign debt through Repurchase-to-Maturity (“RTM”) transactions.

II. PROCEDURAL HISTORY

On November 3, 2011, Joseph Deangelis brought the first action in this case. (Dkt. No. 1.) The Court has, as necessary, consolidated related actions under this docket. The Court has also accepted related cases transferred to this Court by the Judicial Panel on Multidistrict Litigation. (See Conditional MDL Transfer Orders, In re MF Global Hldgs Ltd. Inv. Litig., 12 MD 2338, Dkt. Nos. 1, 4, 7.)

By Order dated January 20, 2012, the Court appointed The Virginia Retirement System and Her Majesty the Queen in Right of Alberta as Lead Plaintiffs and approved the selection of Bernstein Litowitz Berger & Grossmann LLP and Labaton Sucharow LLP3 as Co-Lead Counsel for all claims brought under the Securities Act and the Securities Exchange Act of 1934 (the “Exchange Act”) (collectively, the “Securities Actions”). (Dkt. No. 140.) Plaintiffs — including Guam as a named plaintiff — filed a Consolidated Amended Class Action Complaint on August 20, 2012 (Dkt. No. 330), alleging claims under the Securities Act and Section 10(b) of the Exchange Act against officers and directors of MF Global (collectively the “Individual Defendants”) and underwriters of four MF Global stock offerings (collectively the “Underwriter Defendants”). All defendants moved to dismiss, and the Court denied the motion in its entirety on November 12, 2013. (Dkt. No. 567.) Plaintiffs filed their motion for class certification and appointment of Co-Lead Counsel on September 15, 2014. (Dkt. No. 764.) On October 7, 2014, Plaintiffs filed a Consolidated Second Amended Securities Class Action Complaint that included MF Global’s auditor, PricewaterhouseCoopers LLP (“PwC”) as a defendant. (Dkt. No. 779.)

After Plaintiffs moved for class certification, a series of settlements narrowed the claims and defendants in the Securities Actions. The Court approved a final settlement between Plaintiffs and one underwriter of the 6.25% Senior Notes Offering on June 26, 2015, as well as underwriters of the three earlier MF Global securities offerings. (Dkt. Nos. 964, 965.) On April 20, 2015, the Court preliminarily approved a proposed settlement with PwC. (Dkt. No. 902.) On July 7, 2015, the Court preliminarily approved a proposed settlement with the Individual Defendants. (Dkt. No. 975.) The proposed settlements are pending final approval at a hearing scheduled for November 20, 2015. These settlements left the 6.25% Senior Notes Offering as the only securities offering at issue, with only Securities Act claims surviving. Guam is the only named plaintiff in the Securities Actions that bought 6.25% Senior Notes, and the Senior Notes Underwriters that did not take part in the June 2015 Settlement are the exclusive remaining Securities Actions defendants.

III. DISCUSSION

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Bluebook (online)
310 F.R.D. 230, Counsel Stack Legal Research, https://law.counselstack.com/opinion/deangelis-v-corzine-nysd-2015.