Plaintiffs legislation agency kicked off securities class action for failing to reveal shopper’s funding briefly place
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Plaintiffs legislation agency Robbins Geller Rudman & Dowd has been kicked off a securities class action alleging that buyers misplaced cash when a Mexico-based media firm hid a scheme to bribe soccer officers for broadcasting rights.
U.S. District Judge Louis L. Stanton of the Southern District of New York ousted the law firm as a result of it did not disclose that its pension-fund shopper had invested in a Canadian fund that earned a revenue by shorting shares of the defendant, Grupo Televisa SAB, in line with Reuters and Law360.
Stanton stated Robbins Geller had described its pension plan shopper as a typical investor in a short with out revealing that the Canadian fund made more cash by means of its shorted place than the pension fund misplaced in its Grupo Televisa SAB funding.
The deceptive transient had led to Robbins Geller’s appointment as lead counsel within the case, Stanton stated. The pension plan shopper was eliminated as lead plaintiff final June after the brief funding got here to gentle.
Robbins Geller represented the Colleges of Applied Arts and Technology Pension Plan, which invested in Grupo Televisa SAB’s American depositary receipts, as well as Arrowstreet Capital, which shorted the American depositary receipts. The brief place earned about $11 million for the pension plan’s share of Arrowstreet Capital, whereas the funding within the American depositary receipts resulted in an alleged lack of $968,000.
Grupo Televisa SAB has denied paying bribes to officers of the Federation Internationale de Football Association, often known as FIFA. The class action contends that Grupo Televisa SAB’s American depositary receipts shares misplaced worth after the bribery scandal got here to gentle.
Robbins Geller had argued that the brief place was too distant to the pension plan’s holdings to be thing, and Arrowstreet Capital’s beneficial properties from the brief place solely offset different losses. As a outcome, Internet income flowing to the pension plan from Arrowstreet Capital’s brief gross sales got here to little or nothing. Stanton rejected the argument.
“Robbins Geller’s decision not to disclose the Arrowstreet trades, and thus to assure the lucrative lead counsel position, was knowing and intentional,” Stanton stated. “Robbins Geller’s willingness to submit so misleading a brief, in order to obtain a result for its client which it predictably might not obtain if all relevant facts were addressed, disqualifies it from continuing as counsel in this case.”
Darren Robbins of Robbins Geller advised Reuters that Stanton’s interpretation of wanted disclosure was “unprecedented,” and the agency will appeal.