The
Securities and Exchange Commission recently weighed
in on a securities litigation case pending before
the U.S. Court of Appeals for the Ninth Circuit
that will probably define exactly who can serve
as a lead plaintiff and, additionally, who can
serve as the lead counsel.
The
Ninth Circuit last month agreed to review U.S. District
Judge William Alsup's novel decision in a case against
Network Associates Inc. to appoint as a lead plaintiff
a small-time investor who had lost relatively little
compared to several other plaintiffs, including two
institutional investors alleging millions in losses.
Going
a step further, Judge Alsup ordered the lead plaintiff
to put the lead counsel position out to bid, and
subsequently appointed retired San Jose, Calif.,
lawyer Robert Vatuone to serve as lead plaintiff.
And after interviewing and soliciting fee proposals
from several firms, Mr. Vatuone chose San Francisco's
Lieff Cabraser Heimann & Bernstein LLP to lead
the litigation.
"In
this case, the district court was entitled to consider
information whether [plaintiffs competing to be lead
plaintiff] qualify under the Reform Act ... as adequate
class representatives," advocated the SEC. "If
they do not, then they should not be appointed lead
plaintiff, together or separately, regardless of
their financial interest in the litigation." |
