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Case 1:17-cv-03815-NRB Document 18 Filed 10/04/17 Page 1 of 8
UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YORK---------------------------------------- X
IN RE BARRICK GOLD CORPORATIONSECURITIES LITIGATION
---------------------------------------- XSHEPARD BROADFOOT, Individually and OnBehalf of All Others Similarly Situated,
Plaintiff,17 Civ. 3507 (NRB)
- against -
BARRICK GOLD CORPORATION, KELVINDUSHNISKY, CATHERINE RAW, RICHARDWILLIAMS, and JORGE PALMES,
Defendants.---------------------------------------- XISAAC KIM, Individually and On Behalf ofAll Others Similarly Situated,
Plaintiff,17 Civ. 3815 (NRB)
- against -
BARRICK GOLD CORPORATION, KELVIN P.M.DUSHNISKY, CATHERINE P. RAW, RICHARDWILLIAMS, and JORGE PALMES,
Defendants.---------------------------------------- XNAOMI REICE BUCHWALD
UNITED STATES DISTRICT JUDGE
These actions are brought against Barrick Gold Corporation
("Barrick"), its President and Director Kelvin Dushnisky, its
Vice President and CFO Catherine Raw, its Chief Operating
Officer Richard Williams, and an Executive General Manager Jorge
Palmes on behalf of a purported class of investors who acquired
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securities of Barrick between February 16, 2017, and April 24,
2017. The actions allege violations of the Securities Exchange
Act of 1934 (the "Exchange Act") Three individuals and one
group of investors filed motions seeking to consolidate these
cases, be appointed as lead plaintiff, and appoint their
attorneys as lead counsel. For the reasons set forth below, we
consolidate the cases, appoint Ashwini Malhotra as lead
plaintiff, and appoint his counsel Kahn Swick & Foti, LLC as
lead counsel.
DISCUSSION
I. Consolidation of the Actions
As the related securities class actions filed against
Barrick contain the same factual and legal issues, we
consolidate them under Rule 42(a) of the Federal Rules of Civil
Procedure. See Atwood v. Intercept Pharm., Inc., 299 F.R.D.
414, 415 (S.D.N.Y. 2014). Any other securities actions now
pending or later filed in this district that arise out of or are
related to the same facts as alleged in the above cases shall be
consolidated with these actions for all purposes. All relevant
filings and submissions shall be maintained as one file under
docket number 17 Civ. 3507 with the caption In re Barrick Gold
Corporation Securities Litigation.
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II. Appointment of Lead Plaintiff
The Court received timely motions to be appointed lead
plaintiff from: (1) Markus Knittel, (2) Barrick Investor Group,
(3) Ashwini Malhotra, and (4) BKW Living Trust ("BKW"). Barrick
Investor Group and BKW subsequently withdrew their motions, and
Mr. Knittel filed neither opposition nor reply briefing,
presumably because his claimed losses were the smallest of the
four movants.
Under the Private Securities Litigation Reform Act of 1995
(the "PSLRA"), in appointing a lead plaintiff, we are to presume
that the "most adequate plaintiff" is the person or group of
persons that:
(aa) has either filed the complaint or made a motion
in response to a notice [published by a complainant];
(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) . An investor seeking to be
appointed lead plaintiff need only make a preliminary showing
that it satisfies the requirements of Rule 23. Weltz v. Lee,
199 F.R.D. 129, 133 (S.D.N.Y. 2001). The presumption of
adequacy may be rebutted only upon proof by a member of the
purported class that the presumptive lead plaintiff:
(aa) will not fairly and adequately protect the
interests of the class; or
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(bb) is subject to unique defenses that render suchplaintiff incapable of adequately representing theclass.
15 U.S.C. § 78u-4(a) (3) (B) (iii) (II).
A. Timely Complaints and Motions
All of the class members seeking appointment as lead
plaintiff meet the first requirement in that they have
submitted motions for lead plaintiff status in a timely manner.
Accordingly, we turn to the second requirement and assess which
movant has the largest financial interest in the action.
B. Financial Interest
While the PSLRA does not explicitly identify the
methodology to use to determine the plaintiff with the largest
financial interest, courts in this Circuit have considered the
factors set forth in Lax v. First Merchs. Acceptance Corp., No.
97-2715, 1997 WL 461036, at *5 (N.D. Ill. Aug. 11, 1997), which
are: (1) the total number of shares purchased during the class
period; (2) the net shares purchased during the class period;
(3) the net funds expended during the class period; and (4) the
approximate losses suffered. Consistent with other courts in
this Circuit, we place the greatest emphasis on the approximate
loss suffered by the movant. See Teran v. Subaye, Inc., No. 11-
2614, 2011 WL 4357362, at *2 (S.D.N.Y. Sept. 16, 2011)
(collecting cases).
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No movant disputes that Malhotra claims the largest
approximate loss: $96,687 using a last-in-first-out ("LIFO")
calculation, or $76,829 in total losses over the Class Period.
These losses dwarf the loss of $7,341 claimed by Knittel, the
only other candidate still seeking to be appointed lead
plaintiff. Accordingly, we find that Malhotra has the largest
financial interest in the relief sought by the class.
C. Rule 23 Requirements
In order to be the presumptive lead plaintiff, a movant
must meet the requirements of Rule 23 of the Federal Rules of
Civil Procedure, of which "typicality and adequacy of
representation are the only provisions relevant to the
determination of lead plaintiff under the PSLRA." Shi v. Sina
Corp., No. 05-2154, 2005 WL 1561438, at *2 (S.D.N.Y. July 1,
2005) (quoting In re Oxford Health Plans, Inc. Sec. Litig., 182
F.R.D. 42, 49 (S.D.N.Y. 1998)). At this stage in the
litigation, only a preliminary showing of typicality and
adequacy is required. In re eSpeed, Inc. Sec. Litig., 232
F.R.D. 95, 102 (S.D.N.Y. 2005).
BKW initially challenged Malhotra's ability to make a prima
facie showing of typicality and adequacy, and we granted BKW's
request for leave to conduct limited discovery into Malhotra's
adequacy. Based on this discovery, BKW withdrew its challenge,
concluding that the information received in discovery "shows
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that Malhotra will be a typical and adequate representative of
the proposed class." BKW Resp. at 2, ECF No. 42.
We agree. Malhotra has put forth a prima facie showing of
typicality and adequacy. The typicality threshold is satisfied
where the presumptive lead plaintiff's claims arise from the
same conduct from which the other class members' claims and
injuries arise. Teran, 2011 WL 4357362, at *5. Here, Malhotra
alleges that he purchased Barrick securities during the Class
Period in reliance upon the allegedly materially false and
misleading statements issued by the defendants and suffered
damages resulting from the artificially inflated price of
Barrick securities.
Malhotra also meets the adequacy requirement, which is
satisfied where (1) class counsel is qualified, experienced, and
generally able to conduct the litigation, (2) there is no
conflict between the proposed lead plaintiff and the members of
the class, and (3) the proposed lead plaintiff has a sufficient
interest in the outcome of the case to ensure vigorous advocacy.
Id. First, Malhotra has retained as his counsel Kahn Swick &
Foti, LLC, which is a firm with experience prosecuting
securities class actions. Second, Malhotra's financial interest
should ensure vigorous advocacy on behalf of the class.
Finally, there is no reason to believe that Malhotra has
interests that are adverse to those of the class members, as
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evidenced in part by BKW's support of Malhotra as the lead
plaintiff in this action.
In sum, no evidence presented to the Court provides any
"proof," 15 U.S.C. § 78u-4 (a) (3) (B) (iii) (II), to overcome the
presumption that Malhotra, the movant with the largest financial
interest, be appointed lead plaintiff.
III. Appointment of Lead Counsel
The PSLRA "evidences a strong presumption in favor of
approving a properly-selected lead plaintiff's decisions as to
counsel selection and counsel retention." In re Adelphia
Commc'ns Corp. Sec. & Deriv. Litig., No. 03-1529, 2008 WL
4128702, at *2 (S.D.N.Y. Sept. 3, 2008) (internal quotation
marks omitted). Malhotra has retained Kahn Swick & Foti, LLC as
his counsel. As discussed above, the firm has experience
prosecuting securities class actions, and we have no reason to
believe that it will not adequately represent the interests of
the class. Accordingly, we appoint Kahn Swick & Foti, LLC as
lead counsel.
CONCLUSION
For the foregoing reasons, the cases are ordered
consolidated as In re Barrick Gold Corporation Securities
Litigation, No. 17 Civ. 3507 (NRB). Ashwini Malhotra is
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appointed lead plaintiff, and Kahn Swick & Foti, LLC is
appointed lead counsel. Accordingly, all motions by competing
movants are hereby denied. The parties are referred to the
Stipulation and Order at ECF No. 40 for next steps.
SO ORDERED.
Dated: New York, New York
October 4, 2017
NAOMI REICE BUCHWALD
UNITED STATES DISTRICT JUDGE
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