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IN RE WORLDCOM

United States District Court, S.D. New York


March 25, 2004.

IN RE WORLDCOM, INC. SECURITIES LITIGATION, This Document Relates to: 02 Civ. 3288, 02 Civ. 5108, 02 Civ. 3416, 02 Civ. 5224, 02 Civ. 3419, 02 Civ. 5285, 02 Civ. 3508, 02 Civ. 8226, 02 Civ. 3537, 02 Civ. 8227, 02 Civ. 3750, 02 Civ. 8229, 02 Civ. 3771, 02 Civ. 8230, 02 Civ. 4719, 02 Civ. 8234, 02 Civ. 4945, 02 Civ. 9513, 02 Civ. 4946, 02 Civ. 9514, 02 Civ. 4958, 02 Civ. 9515, 02 Civ. 4973, 02 Civ. 9516, 02 Civ. 4990, 02 Civ. 9519, 02 Civ. 5057, 02 Civ. 9521, 02 Civ. 5071, 03 Civ. 2841, 02 Civ. 5087, 03 Civ. 3592, 03 Civ. 6229

The opinion of the court was delivered by: DENISE COTE, District Judge

MEMORANDUM OPINION & ORDER

Byron B. Mathews, Jr. ("Mathews") has moved (a) to require the Lead Plaintiff in the WorldCom, Inc. ("WorldCom") consolidated securities class action to disclose any potential conflicts, and (b) to create subclasses in the certified class. Mathews identifies himself as a purchaser of WorldCom shares in 2000, who lost approximately $42,000 from the investment. The Lead Plaintiff has opposed the motion; Mathews did not submit any reply to the opposition.*fn1 For the following reasons, the motion is denied. Page 2

Conflict of Interest Disclosure

  Mathews seeks to discover if political contributions have ever been made by a defendant or co-lead counsel for the class to Alan Hevesi, the Comptroller of New York State, or if there are business dealings ongoing between the Comptroller and any defendant. The New York State Common Retirement Fund ("NYSCRF") is the Lead Plaintiff in the consolidated securities class action.

  Any objection to the appointment of the NYSCRF as lead plaintiff should have been made in connection with the appointment proceeding in 2002. Mathews has provided no basis to revisit that appointment or to conduct discovery on these issues.

 Sub-Classes

  Mathews moves for the creation of four subclasses, and the appointment of separate counsel for each, principally to assist in representation of the class during settlement discussions. His four subclasses are for investors who purchased shares as part of the performance of a fiduciary role, investors who purchased shares in their own retirement accounts where the shares represented 50% or more of the value of their holdings, investors who purchased shares in their own retirement accounts where the shares did not represent 50% or more of the accounts' value, and investors who purchased shares in non-retirement accounts. Page 3

  This class action has been actively litigated for over a year and a half. Mathews has pointed to nothing that has occurred in the course of this litigation that suggests that the class is not being well represented or that subclasses should be created. Should a settlement be reached, the Court will scrutinize any proposed settlement and make a determination at that time whether subclasses need to be created for purposes of the settlement. There is no evidence at this time that the creation of subclasses would assist plaintiffs in this litigation. There is every reason to believe that the creation of subclasses would cause confusion, and lead to inefficiencies. This proposal creates the very real danger that any settlement funds will needlessly be transferred from victims to attorneys.

 Conclusion

  The motion by Byron B. Mathews, Jr. for the creation of subclasses and for discovery is denied.

  SO ORDERED.


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