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SOFRAN v. LABRANCHE & CO.

March 22, 2004.

ROBERT and GERALDINE SOFRAN, individually and on behalf of all others similarly situated, Plaintiffs, -against- LABRANCHE & CO., INC., G. MICHAEL LABRANCHE, ROBERT MURPHY, ALFRED O. HAYWOOD, JR., WILLIAM J. BURKE, III, and HARVEY S. TRAISON, Defendants; TODD SEMON, Plaintiff, -against- LABRANCHE & CO., INC. et al., Defendants; MARTIN HUAG, Plaintiff, -against- LABRANCHE & CO., INC. et al.,; EUGENE MURPHY, Plaintiff, -against- LABRANCHE & CO., INC. et al.,; CHARLES E. STRAIN, Plaintiff, -against- LABRANCHE & CO., INC. et al.,; JACK G. YOPP, Plaintiff, -against- LABRANCHE & CO., INC. et al.,; THEODORE V. FERRIS, Plaintiff, -against- LABRANCHE & CO., INC. et al., JONATHAN LEVIN, Plaintiff, -against- LABRANCHE & CO., INC. et al


The opinion of the court was delivered by: ROBERT SWEET, Senior District Judge

OPINION

The above-captioned cases are actions for securities fraud brought on behalf of shareholders of LaBranche & Co., Inc. ("LaBranche"), seeking damages for violations of Section 10(b) and Section 20(a) of the Securities and Exchange Act of 1934 (the "Exchange Act"), as amended, 15 U.S.C. § 78t(a) and 78j(b), and Rule 10b-5 promulgated thereunder. 17 C.F.R. § 240.10b-5.

  Two groups of investors who have sustained losses as a result of their investment in LaBranche have moved for consolidation of the related cases and for appointment as lead plaintiffs of a proposed class of persons or entities who purchased or acquired the securities of LaBranche between August 19, 1999 and October 15, 2003 (the "Class Period."). In addition, each proposed lead plaintiff has requested its choice of lead counsel in the litigation.

  The first group, consisting of investors Anthony Johnson, Clyde Farmer, Edwin Walthall, Donald Stahl and City of Harper Woods Retirement System (collectively, the "Harper Woods Group") have lost approximately $52,099.78 in connection with their purchases of LaBranche securities during the Class Period. The second group, consisting of Joseph C. Eckrich as Custodian for Alexander and Estelle Eckrich, Dorothy J. Johnson, G. Ronald Stallings, Alien Routzahn, Betty M. Mickey, and Merl Williams (collectively, the Page 2 "Williams Group") have lost approximately $27,176.90 in connection with their purchases of LaBranche securities during the Class Period.

  For the reasons set forth below, each of the related actions are consolidated, the motion for appointment of the Harper Woods Group is granted, the motion for appointment of the Williams Group is denied, and the Harper Woods Group's choice of lead counsel is approved.

  Prior Proceedings

  The first of the above-captioned actions was commenced on or about October 16, 2003. Pursuant to 15 U.S.C. § 78u-4(a)(3)(A)-(I), on October 16, 2003, the first notice that a class action had been initiated against defendants was published over the PR Newswire. See In re Party City Securities Litigation, 189 F.R.D. 91, 105 (D.N.J. 1999) (holding that the notification requirement had been met by the publication of "the notice of pendency of the instant action in a widely-circulated national business-oriented wire service, the PR Newswire."). The notice indicated that applications for appointment as lead plaintiff were to be made no later than December 15, 2003.

  The Harper Woods Group and the Williams Group both filed motions to be appointed as lead plaintiffs on December 15, 2003. Page 3 After submission of briefs, the motion was argued on February 11, 2004, at which time it was deemed fully submitted.

  The Related Cases Are Consolidated

  Both groups of plaintiffs have requested consolidation. Each of the above-captioned actions involves class action claims on behalf of class members who purchased or otherwise acquired LaBranche securities during the Class Period. Each of the actions asserts essentially similar and overlapping claims brought on behalf of purchasers of LaBranche securities who purchased in reliance of the materially false and misleading statements and omissions at all relevant times. Consolidation is appropriate when, as here, there are actions involving common questions of law or fact. See Fed.R.Civ.P. 42(a); Johnson v. Celotex Corp., 899 F.2d 1281, 1284 (2d Cir.), cert. denied, 498 U.S. 920 (1990). Accordingly, the cases are hereby consolidated under the caption In re LaBranche Securities Litigation.

  The Harper Woods Group is Appointed as Lead Plaintiffs

  The Private Securities Litigation Reform Act ("PSLRA") sets forth a procedure governing the appointment of a lead plaintiff or plaintiffs in "each action arising under the [Exchange Act] that is brought as a plaintiff class action pursuant to the Page 4 Federal Rules of Civil Procedure." 15 U.S.C. § 78u-4(a)(1) and (a)(3)(B)(i).

  First, the plaintiff who files the initial action must, within 20 days of filing the action, publish a notice to the class informing class members of their right to file a motion for appointment as lead plaintiff. 15 U.S.C. § 78u-4 (a)(3)(A)(I). As indicated above, plaintiff in the first-filed action filed a notice in PR Newswire, which is deemed to satisfy the notice requirement.

  Within 60 days after publication of the required notice, any member or members of the proposed class may apply to the Court to be appointed as lead ...


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