Case: 1:12-cv WAL-GWC Document #: 47 Filed: 03/06/13 Page 1 of 6 DISTRICT COURT OF THE VIRGIN ISLANDS DIVISION OF ST.

Transcription

1 Case: -WAL-GWC Document #: 47 Filed: 03/06/13 Page 1 of 6 DISTRICT COURT OF THE VIRGIN ISLANDS DIVISION OF ST. CROIX FAYUN LUO, Individually and on Behalf of All Others Similarly Situated, v. Plaintiffs, QIAO XING UNIVERSAL RESOURCES, INC., RUI LIN WU and JIUJIU JIANG, Defendants. TO: Joel H. Holt, Esq. Natalie Nelson Tang How, Esq. Lisa M. Komives, Esq. Alan R. Feurstein, Esq. ORDER THIS MATTER came before the Court upon the Motion of Xiaolin Chi to Appoint Lead Plaintiff and Approve Lead Plaintiff s Selection of Counsel (ECF No. 7) ; the motion of Anna Bombrini, Francesca Bombrini, Andrea Romanazzi, Francesco Modesti, and Ernesto Pucci (collectively, the Romanazzi Investor Group) for appointment as Lead Plaintiff and appointment of Lead Counsel and Liaison Counsel (ECF No. 10); Massimiliano Giannotti s Motion for Appointment as Lead Plaintiff and Approval of Lead Counsel (ECF No. 13); and, Motion of Robert Reagan to be Appointed as Lead Plaintiff and for Approval of his Selection of Counsel (ECF No. 14). 1 1 In the Stipulation and Joint Notice of Supplemental Information re November 28, 2012, Status Conference (ECF No. 41), filed by Movants Chi and the Romanazzi Investor Group, on December 10, 2012, said Movants stipulate to the undersigned ruling upon these pending motions. (For reasons unknown, Movant

2 Case: -WAL-GWC Document #: 47 Filed: 03/06/13 Page 2 of 6 Page 2 This matter is a securities class action brought pursuant to Sections 10(b) and 20(a) of the Securities Exchange Act and Rule 10b-5 promulgated thereunder. Comp. (ECF No. 1) at paras The Private Securities Litigation Reform Act (PSLRA) governs the selection of lead plaintiff. The PSLRA provides a "rebuttable presumption" that the most "adequate plaintiff to serve as Lead Plaintiff is the "person or group of persons" that: (aa) has either filed the complaint or made a motion in response to a notice under subparagraph (A)(i); (bb) in the determination of the Court, has the largest financial interest in the relief sought by the class; and (cc) otherwise satisfies the requirements of Rule 23 of the Federal Rules of Civil Procedure. 15 U.S.C. 78u-4(a)(3)(B)(iii)(I). This presumption maybe rebutted only upon proof by a member of the purported plaintiff class that the presumptively most adequate plaintiff (aa) will not fairly and adequately protect the interests of the class; or (bb) is subject to unique defenses that render such plaintiff incapable of adequately representing the class. 15 U.S.C. 78u-4(a)(3)(B)(iii)(II). The Court finds that each of the motions is timely and must be considered. 15 U.S.C. 78u-4(a)(3)(B)(i) ( Not later than 90 days after the date on which a notice is published... the court shall consider any motion made by a purported class member in response to the notice.... ). Massimiliano Giannotti s motion was not mentioned nor did he join or not join the stipulation.) Movant Robert Reagan filed a Notice of Non-Joinder in the said stipulation (ECF No. 42). Pursuant to 28 U.S.C. 636(b)(1)(A), nondispositive matters may be determined by a magistrate judge. The appointment of a Lead Plaintiff is not a dispositive matter. Ross v. Abercrombie & Fitch Co., No. 2:05-CV-819, 2007 WL at *3 (S.D. Ohio March 22, 2007). Thus, the undersigned has jurisdiction to decide the motions whether or not any of the movants so stipulate.

3 Case: -WAL-GWC Document #: 47 Filed: 03/06/13 Page 3 of 6 Page 3 Each movant claims that he/they has/have the largest financial interest in the matter. Movant Xiaolin Chi represents that he expended total net funds of $3,429,222.43, and suffered losses of $2,587, Mem. of Law in Support of Mot. of Xiaolin Chi to Appoint Lead Plaintiff and Approve Lead Plaintiff s Selection of Counsel (ECF No. 8) at 5 and Ex. 3. Movant Romanazzi Investor Group states that they suffered losses of approximately $429, during the Class Period.... Mem. of Law in Support of Mot. of the Romanazzi Investor Group for Appointment as Lead Plaintiff and Appointment of Lead Counsel and Liason Counsel (ECF No. 11) at 2 and Declaration of Kenneth M. Rehns and exhibits (ECF No. 12). Movant Massimiliano Giannotti claims that he purchased 150,000 shares and 150,000 net shares, expending $221, on Qiao Xing during the Class Period and suffering losses of $200, Mem. of Law in Support of Massimiliano Giannotti s Mot. for Appointment as Lead Plaintiff and Approval of Lead Counsel (ECF No. 15) at 6 and Feuerstein Declaration and exhibits (ECF No. 17). Movant Robert Reagan asserts that [d]uring the Class Period, Movant suffered losses of approximately $208,000. Mem. of Law in Support of Robert Reagan s Mot. to be Ap pointed as Lead Plaintiff and for Approval of his Selection of Counsel (ECF No. 16) at 5 and Ex. B. Having reviewed the motions and accompanying memoranda and exhibits, the Court finds that Movant Xiaolin Chi has established a rebuttable presumption that he is the most adequate to serve as Lead Plainti ff as outlined in 15 U.S.C. 78u-4(a)(3)(B)(iii)(I). He clearly has the greatest financial interest among the movants. His claims are typical of

4 Case: -WAL-GWC Document #: 47 Filed: 03/06/13 Page 4 of 6 Page 4 the class because they arise from the same series of events and are based on the same legal theories as those of all purported class members. In re Vicuron Pharmaceuticals, Inc. Securities Litigation, 225 F.R.D. 508, 512 (E.D. Pa. 2004). In addition, Chi has chosen counsel who have extensive experience in this type of litigation and will adequately represent the class. Id. at 511 ( The adequacy determination is made in context with the movant s choice of lead counsel. ) (citation omitted) ). The Court further finds that Movants Romanazzi Investor Group and Robert Reagan have not provided any proof that Chi will not fairly and adequately protect the interests of the class or that he is subject to unique defenses as required to rebut the presumption. As Chi notes, he is not a complete in and out trader. Xiaolin Chi s Reply Mem. of Law in further Support of his Lead Plaintiff Mot. (ECF No. 26) at 2-3, 7. He retains over a million shares. Id. at 3, 7. Even discounting any losses suffered by Chi prior to the date of disclosure, Chi suffered the greatest losses. See, e.g., Bensley v. FalconStor Software, Inc., 277 F.R.D. 231, 239 (E.D.N.Y. 2011) ( [M]any courts have not consid ered losses suffered as a result of sales prior to the date of the disclosures ) (citations omitted) ). The Court also declines Romanazzi Investor Group s invitation to find that Chi is a day-trader and thus an atypical class member or subject to unique defe nses. See Mem. in further Support of Mot. of the Romanazzi Investor Group for Appointment as Lead Plaintiff and Appointment of Lead Counsel and in Opposition to the Competing Mots. (ECF No. 23) at 4 (citing Applestein v. Medivation, Inc., 2010 U.S. Dist. LEXIS 98255, 9-10 (N.D. Cal. Sept. 17,

5 Case: -WAL-GWC Document #: 47 Filed: 03/06/13 Page 5 of 6 Page )). It is not clear from the evidence that Chi is a day trader. Moreover, even if he were, the Court agrees with the United States District Court of New York, Southern District, that day and momentum traders have the same incentives to prove defendants liability as all other class members... Prefontaine v. Research in Motion, Ltd., No. 11 Civ. 4068(RJS), 2012 WL at *4 (S.D.N.Y. Jan. 5, 2012) (slip copy) ( quoting In re Initial Public Offering Sec. Litig., 227 F.R.D. 65, 108 (S.D.NY. 2004), rev d on other grounds, 471 F.3d 24 (2d Cir. 2006)). Like the Prefontaine court, in the absence of evidence to the contrary, the Court presumes that [Chi] has the same incentive to prove defendants liability as all other class members whether or not he engaged in day trading. Prefontaine, 2012 WL at *4. Based upon the foregoing, the Court will appoint Xiaolin Chi as Lead Plaintiff and approve his selection of counsel as Lead Counsel. WHEREFORE, it is now hereby ORDERED : 1. Motion of Xiaolin Chi to Appoint Lead Plaintiff and Approve Lead Plaintiff s Selection of Counsel (ECF No. 7) is GRANTED. 2. Plaintiff Xiaolin Chi is appointed as Lead Plaintiff. 3. Plaintiff Xiaolin Chi s selection of counsel, The Rosen Law Firm, P.A., is appointed as Lead Counsel and The Law Offices of Joel Holt is appointed as Liaison Counsel.

6 Case: -WAL-GWC Document #: 47 Filed: 03/06/13 Page 6 of 6 Page 6 4. Lead Counsel shall manage the prosecution of this litigation. Lead Counsel are to avoid duplicative or unproductive activities and are vested by the Court with the responsibilities that include, without limitation, the following: (1) to prepare all pleadings, (2) to direct and coordinate the briefing and arguing of motions in accordance with the schedule set by the orders and rules of the Court, (3) to initiate and direct discovery, (4) to prepare the case for trial, and (5) to engage in settlement negotiations on behalf of Lead Plaintiff and Class. 5. The motion of Anna Bombrini, Francesca Bombrini, Andrea Romanazzi, Francesco Modesti, and Ernesto Pucci (collectively, the Romanazzi Investor Group) for appointment as Lead Plaintiff and appointment of Lead Counsel and Liaison Counsel (ECF No. 10) is DENIED. 6. Massimiliano Giannotti s Motion for Appointment as Lead Plaintiff and Approval of Lead Counsel (ECF No. 13) is DENIED. 7. Motion of Robert Reagan to be Appointed as Lead Plaintiff and for Approval of his Selection of Counsel (ECF No. 14) is DENIED. ENTER: Dated: March 6, 2013 /s/ George W. Cannon, Jr. GEORGE W. CANNON, JR. MAGISTRATE JUDGE