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Charter Township of Clinton Police and Fire Retirement System v. LPL Financial Holdings Inc.

United States District Court, S.D. California

July 21, 2016

CHARTER TOWNSHIP OF CLINTON POLICE AND FIRE RETIREMENT SYSTEM, Individually and on Behalf of All Others Similarly Situated, Plaintiff,
v.
LPL FINANCIAL HOLDINGS INC., et al., Defendants.

          ORDER GRANTING MOTION FOR APPOINTMENT AS LEAD PLAINTIFF AND APPROVAL OF SELECTION OF LEAD COUNSEL

          Barry Ted Moskowitz, Chief Judge

         Plaintiff Soft Drink and Brewery Workers Union Local 812 Retirement Fund (the “Retirement Fund”) has filed a motion for appointment as lead plaintiff and approval of lead plaintiff’s selection of lead counsel. No competing motions were filed, and no opposition was filed. For the reasons discussed below, The Retirement Fund’s motion is GRANTED.

         I. BACKGROUND

         On March 22, 2016, Plaintiff Charter Township of Clinton Police and Fire Retirement System commenced this action on behalf of itself and all others similarly situated.

         This action is a securities class action on behalf of all purchasers of common stock of LPL Financial Holdings Inc. (“LPL”) between December 8, 2015 and February 11, 2016, inclusive (“Class Period”).

         The Complaint alleges that during the Class Period, Defendants issued false and misleading statements and/or failed to disclose adverse information regarding LPL’s business and prospects, artificially inflating common stock prices during the Class Period. The Complaint asserts claims for violations of section 10(b) of the Exchange Act, 17 U.S.C. § 78j(b), and Rule 10b-5, 17 C.F.R. § 240.10b-5, as well as violations of section 20(a) of the Exchange Act, 17 U.S.C. § 78t(a).

         II. DISCUSSION

         A. Lead Plaintiff Analysis

         1. Governing Law

         Under the Private Securities Litigation Reform Act (“PSLRA”), no later than 20 days after filing a class action securities complaint, a private plaintiff or plaintiffs must publish a notice advising members of the purported plaintiff class of the pendency of the action, the claims asserted, and that any member of the purported class may move the court to serve as lead plaintiff.[1] 15 U.S.C. § 78u-4(a)(3)(A)(i). Not later than 60 days after the date on which the notice is published, any member of the purported class may move the court to serve as lead plaintiff of the purported class. Id. Within 90 days after publication of the notice, the Court shall consider any motion made by a class member to serve as lead plaintiff. 15 U.S.C. § 78u- 4(a)(3)(B)(i).

         The Court shall appoint as lead plaintiff “the member or members of the purported plaintiff class that the court determines to be most capable of adequately representing the interests of class members.” 15 U.S.C. § 78u-4(a)(3)(B)(i). The presumptively most adequate plaintiff is the one who “has the largest financial interest in the relief sought by the class” and “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). “In other words, the district court must compare the financial stakes of the various plaintiffs and determine which one has the most to gain from the lawsuit. It must then focus its attention on that plaintiff and determine, based on the information he has provided in his pleadings and declarations, whether he satisfies the requirements of Rule 23(a), in particular those of ‘typicality’ and ‘adequacy.’” In re Cavanaugh, 306 F.3d 726, 730 (9th Cir. 2002).

         The presumption that a plaintiff is the most adequate lead plaintiff may be rebutted only upon proof by a member of the purported plaintiff class that the plaintiff will not fairly and adequately protect the interests of the class or 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).

         2. Financial Interest

         The Retirement Fund believes that with its losses of approximately $78, 902 in connection with its purchase of 12, 500 shares of LPL common stock (Exs. A-B to McCormick Decl.), it has the largest financial interest in the relief sought by the class. Because no competing motions have been filed ...


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