The opinion of the court was delivered by: Azrack, United States Magistrate Judge
Presently before the Court is a motion by the Martingano Group for (i) consolidation of two related securities fraud actions, (ii) appointment of the Martingano Group as Lead Plaintiff, and (iii) approval of its selection of Lead Counsel (Dkt No. 7: Mot. to Consolidate Cases, Appoint Lead Pl. and Approve Selection of Lead Counsel (06/06/06)). No other plaintiffs opposed this motion. By Order dated June 8, 2006, the Honorable John Gleeson, United States District Judge, referred the Martingano Group's motion to me for decision. For the reasons stated below, Martingano Group's motion is granted in its entirety.
Presently before the Court are two related securities fraud class actions brought against American International Group, Inc., AIG Financial Advisors, Inc., Royal Alliance Associates, Inc., FSC Securities Corporation, and Advantage Capital Corporation (hereafter "defendants"). In each case, plaintiffs seek certification of a class of investors who purchased and/or held shares or like interests in "Shelf-Space Funds"*fn1 between June 30, 2000 and June 8, 2005, inclusive (the "Class Period"), and who were damaged thereby. Plaintiff Joseph Martingano brought the first-filed of these related actions on April 7, 2006 ( No. 06-CV-1625(JG)). On May 1, 2006, plaintiffs Julius Godachy and Custodian FBO Samantha Joy Coone UTMA/CA filed a second related action (No. 06-CV-2014(JG)). Both cases (collectively the "AIG Actions") allege violations of the Securities Act of 1933 ("Securities Act") and the Securities Exchange Act of 1934 (the "Exchange Act").
The law firm of Stull, Stull & Brody represents Martingano Group and Joseph Martingano. Other plaintiffs' counsel include the law firm of Brodsky & Smith, LLC and Schiffrin & Barroway, LLP. On April 7, 2006, notice of the first-related action was published over Business Wire, advising members of the proposed Class of their right to move the Court to serve as lead plaintiff within the requisite period from the date of publication of the notice, or by June 6, 2006 (Lahm Decl., Ex. A). Martingano Group's present motion to consolidate, for appointment as lead plaintiff, and for appointment of Stull, Stull & Brody as lead counsel is unopposed. Martingano Group's motion for appointment as lead plaintiff was made in accordance with the Private Securities Litigation Reform Act of 1995 (the "PSLRA"). Defendants take no position with regard to the respective motion.
I. Consolidation of the Actions
Rule 42(a) states that [w]hen actions involving a common question of law or fact are pending before the court, it may order a joint hearing or trial of any or all the matters in issue in the actions; it may order all the actions consolidated; and it may make such orders concerning proceedings therein as may tend to avoid unnecessary costs or delay.
Fed. R. Civ. P. 42(a); see also Johnson v. Celotex Corp., 899 F.2d 1281, 1284 (2d Cir. 1990) ("Consolidation of [ ] actions sharing common questions of law and fact is commonplace."). "In determining the propriety of consolidation, district courts have broad discretion, and generally favor the view that considerations of judicial economy favor consolidation." Weiss v. Friedman, Billings, Ramsey Group, Inc., 2006 WL 197036, at *1 (S.D.N.Y. Jan. 25, 2006) (citing Ferrari v. Impath, Inc., 2004 WL 1637053, at *2 (S.D.N.Y. July 20, 2004)) (internal quotation marks omitted); see also Celotex, 899 F.2d at 1284. In securities class action cases, such as this one, courts have deemed consolidation particularly appropriate where the actions "are based on the same public statements and reports" if there are "common questions of law and fact and [if] the defendant will not be prejudiced." Ferrari, 2006 WL 1637053, at *2 (citing Mitchell v. Complete Mgmt., Inc. Sec. Litig., No 99 Civ. 1454, 1999 WL 728678, at *1 (S.D.N.Y. Sept. 17, 1999)).
The AIG Actions stem from the same NASD announcement, released on June 8, 2005, that it had fined AIG Inc. "in connection with the receipt of directed brokerage in exchange for preferential treatment for certain mutual fund companies" (Martingano Compl. ¶¶ 9, 40-43; Godachy Compl. ¶¶ 9, 37). Both complaints allege that defendants entered into "'shelf-space' arrangements during the Class Period, steering clients into the Shelf-Space Funds, in exchange for financial gain" (Martingano Compl. ¶¶ 17-20; Godachy Compl. ¶¶ 17-20). The questions of law and fact are the same in the two complaints: (a) whether the federal securities laws were violated by Defendants' acts and (b) to what extent the members of the Class have sustained damages and the proper measure of such damages (Martingano Compl. ¶ 60; Godachy Compl. ¶ 57). Indeed, the Martingano Complaint and the Godachy Complaint are nearly identical images of the other. See Goplen v. 51JOB, Inc., 2005 WL 1773702, at *1 (S.D.N.Y. July 26, 2005) (motion for consolidation granted, in part because "[t]he complaints are substantively identical, almost as if the [two] law firms involved shared the same word processor"). On this basis, the Court finds that there are "common issues of law and fact" in the AIG Actions. They are hereby consolidated for all purposes.
The caption of these consolidated actions shall hereinafter be referred to as "In re AIG Financial Advisors, Inc. Securities Litigation." All relevant documents and submissions shall be maintained as one file under Master File No. 06-CV-01625(JG)(JMA). Any other actions now pending or later filed in the Eastern District of New York that arise out of or are related to the same facts as alleged in the above cases shall be consolidated for all purposes, if and when they are brought to this Court's attention, whether by application to the Court or otherwise. The Clerk of the Court shall file all pleadings in the Master File and note such filings on the Master Docket.
II. Appointment of Lead Plaintiff
A. Procedure under the PSLRA
It is well established law that the Private Securities Litigation Reform Act ("PSLRA") of 1995, Pub. L. 104-67, 109 Stat. 737 (1995), governs the procedure for appointing a lead plaintiff where, as here, claims are brought under the Securities and Exchange Acts. See Ferrari, 2004 WL 1637053, at *3; Weiss, 2006 WL 197036, at *2; see also In re Oxford Health Plans, Inc., Sec. Litig., 182 F.R.D. 42, 43-44 (S.D.N.Y. 1998) ("In enacting the PSLRA, Congress intended to 'increase the likelihood that parties with significant holdings in issuers, whose interests are more strongly aligned with the class of shareholders, will participate in the litigation and exercise control over the selection and actions of plaintiffs counsel.'" (quoting H.R. Rep. No. 104-369, at 32 (1995) reprinted in 1996 U.S.C.C.A.N. at 731)). The PSLRA requires that the plaintiff who first files must, within twenty days, publish notice of the suit "in a widely circulated national business -oriented publication or wire service . . ." 15 U.S.C. § 78u-4(a)(3)(A)(i); see also Weiss, 2006 WL 197036, at *2. The notice must advise members of the purported plaintiff class (i) of the pendency of the action, the claims, and the purported class period and (ii) that any plaintiff may apply to the court to serve as lead plaintiff within sixty days of the published notice. 15 U.S.C. § 78u-4(a)(3)(A)(i)(I)-(II). If these procedures are satisfied, the Court shall ...