United States District Court, S.D. California
BAR MANDALEVY, Individually and on Behalf of All Others Similarly Situated, Plaintiff,
BOFI HOLDING, INC.; GREGORY GARRABRANTS; and ANDREW J. MICHELETTI, Defendants.
ORDER APPOINTING LEAD PLAINTIFFS [ECF NOS. 3, 4,
GONZALO P. CURIEL, UNITED STATES DISTRICT JUDGE
the Court are three motions by putative-class members seeking
to be appointed as lead plaintiff: one filed by Davis Grigsby
(ECF No. 3), the second filed by the Philip Ricciardi, Larry
Dooley, and Linda Ostermann (ECF No. 4), and the third filed
by Joseph Shepard, David Siebert, Vickie Siebert, and Chao
Wang (ECF No. 5). For the reasons set forth below, the Court
APPOINTS David Grigsby, Joseph Shepard, and David Siebert as
lead plaintiff in this action. Appointment of class counsel
is deferred pending supplemental briefing by lead plaintiffs.
to the Class Action Complaint, Bof I Holding, Inc., is a
holding company for “Bank of Internet USA, ”
which provides consumer and business banking products in the
United States. (ECF No. at 2 ¶ 2.) The complaint alleges
that during the class period-April 28, 2016, through March
30, 2017-Defendants “made materially false and
misleading statements regarding the Company's business,
operational and compliance policies.” (Id. at
3 ¶ 4.) In light of these false and misleading
statements, the complaint alleges, Bof I's share price
fell approximately 5.26%, leading to substantial losses for
investors. (Id. at 13 ¶ 31-32.) The complaint
alleges violations of Sections 10(b) and 20(a) of the
Exchange Act and the Securities and Exchange Commission's
Rule 10b-5. (Id. at 16-20.)
the Private Securities Litigation Reform Act
(“PSLRA”), within 20 days after the class action
securities complaint is filed, a public notice must be made
advising members of the putative class of the pendency of the
action, the claims asserted, and that any members of the
purported class may move the court to serve as lead
plaintiff. 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.
Court must appoint as lead plaintiff “the member or
members of the purported class that the court determines to
be most capable of adequately representing the interests of
class members.” Id. § 78u-4(a)(3)(B)(i).
The presumptively most adequate plaintiff (the
“PMAP”) is the person, or group of people, that
“has either filed the complaint or made a motion”
to be appointed lead plaintiff, “has the largest
financial interest in the relief sought by the class, ”
and makes a prima facie showing that he
“otherwise satisfie[s] the requirement of Rule 23 of
the Federal Rules of Civil Procedure.” Id.
§ 78u-4(a)(3)(B)(iii)(I); Tai Jan Bao v. SolarCity
Corp., No. 14-cv-01435-BLF, 2014 WL 3945879, at *3 (N.D.
Cal. Aug. 11, 2014). Of the four elements listed in Rule 23,
the most important inquiries for purposes of appointing lead
plaintiffs in a securities suit are typicality and adequacy.
In re Cavanaugh, 306 F.3d 726, 730 (9th Cir. 2002).
Ninth Circuit has described the foregoing analysis as
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
Id. “The court must examine potential lead
plaintiffs one at a time, starting with the one who has the
greatest financial interest, and continuing in descending
order if and only if the presumptive lead plaintiff is found
inadequate or atypical.” Id. at 732. This
presumption may be rebutted “only upon proof by a
member of the purported plaintiff class that the [PMAP] . . .
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).
Motions for Appointment
Court received three motions for appointment of lead
plaintiff within the 60 days after notice was published.