Maliarov v. Eros International PLC et al

Filing 34

MEMORANDUM AND ORDER denying (6) Motion to Appoint Counsel; denying (6) Motion to Appoint; denying (6) Motion to Consolidate Cases; denying (8) Motion to Appoint ; denying (8) Motion to Appoint Counsel; granting (11) Motion to Appoint ; denying (16) Motion to Appoint; denying (19) Motion to Appoint in case 1:15-cv-08956-AJN. For the foregoing reasons, the Court grants the motions to consolidate Maliarov v. Eros International PLC et al., 15-CV-8956 and Popi v. Eros International PLC et al., 16-CV-223. The Court also grants Eisner and Ivosevic's motion for appointment as lead plaintiffs and approves Labaton Sucharow as lead counsel. The remaining motions are denied. The Court will schedule an Initial Pretrial Conference for the consolidated action by separate order. This resolves Dkt. Nos. 6, 8, 11, 16, 19. (As further set forth in this Order) (Signed by Judge Alison J. Nathan on 4/5/2016) Filed In Associated Cases: 1:15-cv-08956-AJN, 1:16-cv-00223-AJN (lmb)

USDCSDNY
DOCUMENT
ELECTRONICALLY FILE))

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

DOC#:_...;.;--~----::~::-

DATE FILED:APR 0 5 2016

Vladimir Maliarov,

15-CV-8956 (AJN)

Plaintiff,

-v-

MEMORANDUM AND ORDER

Eros International PLC et al.,
Defendants.

SavvaPopi,
16-CV-223 (AJN)

Plaintiff,

-v-

MEMORANDUM AND ORDER

Eros International PLC et al.,
Defendants.

ALISON J. NATHAN, District Judge:
Before the court are two securities fraud class actions against Eros International PLC
("Eros") and certain of its officers and directors. Plaintiffs in both cases allege that Defendants
made materially false and misleading statements about Eros's financial condition that caused a
stark decline in stock price when discovered. Currently pending are motions for consolidation,
appointment of lead plaintiff, and approval of class counsel. Plaintiff Savva Popi 1 ("Popi"),
putative class members Fred Eisner and Strahinja Ivosevic ("Eisner and Ivosevic"), and

1

There is some dispute in the briefing on these motions as to Savva Popi's proper name and gender. See, e.g., Dkt.
No. 25 Ex. 1 at 9. Popi's counsel clarifies in their reply brief that Mr. Savva Popi is male, and that "Popi" is indeed
his last name. Dkt. No. 29 Ex. 1 at 2.

1

Teamsters Local 710 Pension Fund ("Local 710") have moved to consolidate the two actions
currently pending before the Court. Dkt. Nos. 6, 11, 13. In addition, Popi, Eisner and Ivosevic,
Local 710, and John J. Sciortino ("Sciortino") have moved to be appointed lead plaintiff. 2 Dkt.
Nos. 6, 11, 13, 16. For the reasons articulated below, the Court consolidates the actions,
appoints Eisner and Ivosevic as lead plaintiffs, and approves their choice of counsel.

I.

CONSOLIDATION
Popi and several putative class members have moved for consolidation of the two cases

presently before the Court, 15-CV-8956 and 16-CV-223. Federal Rule of Civil Procedure 42
provides that "[i]f actions before the court involve a common question oflaw or fact, the court
may ... consolidate the actions." Fed. R. Civ. P. 42(a)(2). Courts have "broad discretion to
determine whether consolidation is appropriate" and look to "considerations of judicial
economy" in exercising such discretion. Johnson v. Celotex Corp., 899 F .2d 1281, 1284-85 (2d
Cir. 1990). "In securities actions where the complaints are based on the same 'public statements
and reports,' consolidation is appropriate ifthere are common questions oflaw and fact .... "

Weltz v. Lee, 199 F.R.D. 129, 131 (S.D.N.Y. 2001) (quoting Werner v. Satterlee, Stephens,
Burke & Burke, 797 F. Supp. 1196, 1211 (S.D.N.Y. 1992)).
The two cases currently before the Court involve "substantially identical questions oflaw
and fact." Reitan v. China Mobile Games & Entm 't Grp., Ltd., 68 F. Supp. 3d 390, 394
(S.D.N.Y. 2014). The two complaints raise claims against the same defendants pursuant to the
same provisions of the Securities Act and Exchange Act and contain almost identical recitations
of fact. See, e.g., Maliarov Comp.

iii! 2-14, 40-42; Popi Comp. iii! 2-5, 8-14, 42-44. Both actions

2

Anumita Singh and James Christopher Shelburne withdrew their motion for appointment as lead plaintiff. Dkt
Nos. 8, 24. Similarly, the Town of Davie Police Officers' Pension Plan filed a motion of non-opposition in light of
other movants' larger financial losses. Dkt. Nos. 19, 22.

2

are brought by investors who purchased Eros securities in connection with its initial public
offering ("IPO") and allege that Eros's registration statement, SEC quarterly reports, and public
press releases contained materially false and misleading statements. See Maliarov Comp. iii! 1,
44-60; Popi Comp. ifil 1, 46-61. Although the complaints allege different initial disclosure dates
of Eros's fraud, compare Maliarov Comp. if 6 with Popi Comp. if 6, the question of the correct
initial disclosure date is common to both cases. Because "the complaints are based on the same
'public statements and reports'" and contain "substantially identical questions oflaw and fact,"
the Court finds that "considerations of judicial economy" justify consolidation. See Weltz, 199
F.R.D. at 131 (quoting Werner, 797 F. Supp. at 1211); Reitan, 68 F. Supp. 3d at 394; Johnson,
899 F.2d at 1285.

II.

APPOINTMENT OF LEAD PLAINTIFF
Under the Private Securities Litigation Reform Act of 1995 (the "PSLRA"), the Court is

required to appoint the "most adequate plaintiff' as lead plaintiff. 15 U.S.C. § 78u-4(a)(3)(B)(i).
The statute establishes a presumption that the most adequate plaintiff is the person who "has
either filed the complaint or made a motion in response to a notice," "has the largest financial
interest in the relief sought by the class," and "otherwise satisfies the requirements of Rule 23."
Id.§ 78u-4(a)(3)(B)(iii)(I)(aa)-(cc). This presumption may only be rebutted by proof that the

purportedly most adequate plaintiff "will not fairly and adequately protect the interests of the
class" or "is subject to unique defenses that render such plaintiff incapable of adequately
representing the class." Id.§ 78u-4(a)(3)(B)(iii)(II)(aa), (bb).
Although the PSLRA requires courts to consider the "financial interest" of potential lead
plaintiffs, it does not specify how to determine who has the largest financial interest. Courts in
this district, however, have considered the following factors:
3

(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.

Peters v. Jinkosolar Holding Co., Ltd., No. 11-CV-7133 (JPO), 2012 WL 946875, at *5
(S.D.N.Y. March 19, 2012) (quoting Kaplan v. Gelfond, 240 F.R.D. 88, 93 (S.D.N.Y. 2007)). "It
is well settled that ' [f]inancial loss, the last factor, is the most important element of the test.'" Id.
(quoting Varghese v. China Shenghuo Pharm. Holdings, Inc., 589 F. Supp. 2d 388, 395
(S.D.N.Y. 2008)).
When evaluating financial loss, "courts must consider only those losses that will actually
be recoverable in the class action." Topping v. Deloitte Touche Tohmatsu CPA, 95 F. Supp. 3d
607, 617 (S.D.N.Y. 2015). In Dura Pharmaceuticals, Inc. v. Broudo, 544 U.S. 336 (2005), the
Supreme Court emphasized that, in a securities fraud case, a plaintiff must "prove that the
defendant's misrepresentation (or other fraudulent conduct) proximately caused [his] economic
loss." Id. at 346. In this "corrective disclosure" case, see Lentell v. Merrill Lynch & Co., 396
F.3d 161, 175 (2d Cir. 2005), plaintiffs allege that an Alpha Exposure report revealed Eros's
fraud and caused stock prices to decline. See Maliarov Comp.

iii! 6-11; Popi Comp. iii! 6-13. In

this type of case, "a plaintiff must [] prove that the company's stock price later declined (and
thus caused plaintiff's shares to be worth less) immediately following a disclosure of the alleged
misconduct to the public." In re Comverse Tech., Inc. Sec. Litig. ("Comverse"), No. 06-CV1825 (NGG), 2007 WL 680779, at *4 (E.D.N.Y. Mar. 2, 2007). For this reason, losses "incurred
before [a company's] misconduct was ever disclosed to the public are not recoverable, because
those losses cannot be proximately linked to the misconduct at issue." Topping, 95 F. Supp. 3d
at 617-18 (quoting Comverse, 2007 WL 680779, at *4).

4

In reporting financial losses to the Court, movants other than Sciortino provided only the
total decrease in share value since the date of purchase rather than losses linked to decrease in
value after disclosure of the alleged fraud. See Dkt. No. 7 Ex. 3 at 2; Dkt. No. 13 Ex. 1 at 40;
Dkt. No. 14 Ex.Bat 4, 6; Dkt. No. 18 Ex. 3. Although 15 U.S.C. § 78u-4(e) provides a formula
for calculating recoverable losses, the parties did not provide sufficient data to conduct this
analysis. As a result, the Court will instead conduct a rough estimate of each movant's losses
limited to the period between October 30, 2015, when the Alpha Exposure report disclosed
Eros's fraud, 3 and November 13, 2015, the last date for which plaintiffs allege stock price
information. In conducting these calculations, the Court assumes that Eros's stock price declined
$1.69 on October 30, 2015 and fell a further $4.09 by November 13, 2015. See Maliarov Comp.

iii! 7-11.

The Court also relies on stock sale information provided by the parties. See Dkt. No. 7

Ex. 3 at 2; Dkt. No. 13 Ex. 1 at 40; Dkt. No. 14 Ex. B; Dkt. No. 18 Exs. 2, 3.
Movant

Reported
Financial
Loss

Popi
Eisner
Ivosevic
Local 7104
Sciortino

$3,393,877.05
$671,998.37
$632,986.98
$721,033.63
$117,661.00

Shares
Held
Oct. 30

Initial
Stock
Decline

0
35,000
10,175
26,003
5,000

$1.69
$1.69
$1.69
$1.69
$1.69

Initial
Loss

Shares
Held
Nov.13

$0.00
$59,150.00
$17,195.75
$43,945.07
$8,450.00

Further
Stock
Decline

0
35,000
0
14,144
5,000

$4.09
$4.09
$4.09
$4.09
$4.09

Further
Loss

Total PostOct. 30
losses

$0.00
$143,150.00
$0.00
$57,848.96
$20,450.00

$0.00
$202,300.00
$17,195.75
$101,794.03
$28,900.00

Relying on this data, the Court looks to the "largest financial interest" of the movants and
Rule 23 to determine the presumptively most adequate plaintiff. 15 U.S.C. § 78u4(a)(3)(B)(iii)(I)(bb), (cc). The Court then evaluates whether this presumption has been

3

The Court will address Popi's allegations of an earlier disclosure date below.
Local 710 also sold 11,859 shares on November 2, 2015 for $13.11. Dkt. No. 13 Ex. 1 at 40. Because this sale
price exceeds the value of the stock prior to October 30, 2015, see Maliarov Comp. ii 7, there is no measurable stock
decline and Court does not consider this transaction in calculating post-October 30, 2015 losses.

4

5

rebutted. Id. § 78u--4(a)(3)(B)(iii)(II). In conducting this analysis, the Court begins with Popi,
who alleges the largest financial loss, and continues until it identifies the most adequate plaintiff.
A.

Popi

Popi alleges that he suffered $3.393 million in financial losses during the Class Period, a
figure that dwarfs other alleged losses. Dkt. No. 7 Ex. 3 at 2. Despite this large sum, other
movants argue that Popi does not have the largest financial interest under Dura and that he is
subject to unique defenses that would rebut any presumption of adequacy.
1.

Popi is not the presumptively most adequate plaintiff

Although Popi alleges a substantial financial loss, he sold all of his Eros shares on
October 20, 2015, Dkt. No. 7 Ex. 3 at 2, ten days before the October 30, 2015 Alpha Exposure
report disclosed Eros's alleged fraud. Maliarov Comp. if 6. Other movants argue that this makes
Popi an "in-and-out" trader whose losses are not recoverable under Dura. See Dkt. No. 26 at 45; see also Topping, 95 F. Supp. 3d at 618 (collecting cases). Popi's own Complaint, however,
alleges that Eros's stock began to decline as early as October 13, 2015 as a result of"leakage"
from "those behind, affiliated with, or those who had early access to the Alpha Exposure
Report." Popi Comp. ifif 6-7.
It is true that "loss causation may be premised on partial revelations that do not uncover

the complete extent of the falsity of specific prior statements" if the partial disclosure "somehow
reveals to the market that a defendant's prior statements were not entirely true." In re Take-Two
Interactive Sec. Litig:., 551 F. Supp. 2d 247, 283 (S.D.N.Y. 2008). However, determinations of

largest financial interest must be "based on the facts alleged in the complaint." Comverse, 2007
WL 680779, at *5. Popi's Complaint does not identify any particular communication partially
disclosing allegations of fraud prior to October 30, 2015, but instead relies on unsupported

6

allegations that those with "early access to the Alpha Exposure Report" leaked such information
in an unspecified manner. Popi Comp.

iii! 6-7; cf Topping, 95 F. Supp. 3d at 622 (citing a

particular letter); Bensley v. FalconStor Software, Inc., 277 F.R.D. 231, 239 (E.D.N.Y. 2011)
(pointing to a particular press release); Juliar v. SunOpta Inc., No. 08-CV-1070 (PAC), 2009 WL
1955237, at *2 (S.D.N.Y. Jan. 30, 2009) (citing statements from the director and an analyst
report). Because Popi does not "allege facts in support" of his leakage theory to establish loss
causation for transactions prior to October 30, 2015, the Court concludes that Popi has not
adequately established that he has suffered any recoverable losses for the purpose of the lead
plaintiff analysis. See Comverse, 2007 WL 680779, at *6 ("[I]t would be unfair to speculate that
[a movant] will ultimately be able to demonstrate loss causation for its in-and-out transactions,
despite its patent failure to allege [in the complaint] facts in support thereof."). As a result, Popi
does not have the largest financial interest and is not the presumptively most adequate plaintiff.

2.

Popi may not fairly and adequately protect the interests of the class
and is subject to unique defenses

Even if Popi were the presumptively most adequate plaintiff, the Court has several
concerns about appointing him lead plaintiff. First, Popi is the only movant to allege any partial
disclosure of fraud prior to the October 30, 2015 Alpha Exposure report. Popi Comp.

if 6; Dkt.

No. 12 at 4-5; Dkt. No. 13 Ex. 1 at 13-14; Dkt. No. 17 at 2-3. Importantly, Popi filed his lawsuit
alleging these additional facts on the last day for potential class members to file a lead plaintiff
motion. See 15 U.S.C. § 78u-4(a)(3)(A)(i)(II) (giving putative class members "60 days after the
date on which [] notice is published" to "move the court to serve as lead plaintiff of the purported
class"); Dkt. No. 17 at 4 (indicating that notice in this action was published on November 13,
2015). Until that time, the various suits against Eros alleged an initial disclosure date of October
30, 2015. See Maliarov Comp.

if 6; see also Arsani v. Eros lnt'l,
7

15-CV-8054, Dkt. No. 1if4

(D.N.J. Nov. 13, 2015); Abram v. Eros Int'l, 15-CV-8122, Dkt. No. 1ii4 (D.N.J. Nov. 17,
2015); Sharma v. Eros Int'l, 15-CV-8816, Dkt. No. 1ii5 (D.N.J. Dec. 22, 2015). As a result, the
other lead plaintiff movants "filed their motions to serve as lead plaintiff in reliance on the
[c]omplaint[ s]" that had been filed up to that date. Topping, 95 F. Supp. 3d at 620.
The Court is hesitant to encourage lead plaintiff movants to file complaints with
additional disclosure allegations in the eleventh hour, thereby precluding similarly-situated
potential movants from identifying themselves to the Court. For example, if Popi's allegations
of a mid-October partial disclosure are accurate, individuals who would otherwise "be able to
meet the requirements of a lead plaintiff motion" under the expanded partial disclosure date
would be "precluded from filing such motions given the expiration of the PSLRA's time limit for
doing so." Id. The concern about excluding such individuals is particularly salient here, as Popi
"reviewed the complaint and authorized its filing" on December 22, 2015, more than two weeks
before it was filed by counsel. See Popi v. Eros Int'l, 16-CV-223, Dkt. No. 1 Ex. A (S.D.N.Y.
Jan. 12, 2016). The specter of gamesmanship on these facts causes the Court to question
whether Popi will "fairly and adequately protect the interests of the class." 15 U.S.C. § 78u4( a)(3)(B)(iii)(II)( aa).
Furthermore, Popi "is subject to unique defenses that render [him] incapable of
adequately representing the class." Id. § 78u-4(a)(3)(B)(iii)(II)(bb). As the chart above
indicates, Popi is the only movant whose entire alleged loss pre-dates the October 30, 2015
Alpha Exposure report. As a result, Popi, unlike other movants, would be completely barred
from recovery if no earlier disclosure date is established. See Topping, 95 F. Supp. 3d at 617-18
(quoting Comverse, 2007 WL 680779, at *4) (losses "incurred before [a company's] misconduct
was ever disclosed to the public are not recoverable"). If there is a serious question as to

8

whether a movant's losses are the proximate result of a company's misconduct, courts frequently
decline to appoint that person as lead plaintiff. See, e.g., Bensley v. FalconStor Software, Inc.,
277 F.R.D. 231, 241(E.D.N.Y.2011); In re Veeco Instruments, Inc., 233 F.R.D. 330, 333-34
(S.D.N.Y. 2005). Because Popi did not incur any losses after the October 30, 2015 Alpha
Exposure report was released, the Court finds that he is "incapable of adequately representing the
class,"§ 78u-4(a)(3)(B)(iii)(II)(bb), and thus declines to appoint him as lead plaintiff. 5

B.

Eisner and Ivosevic

If Popi is removed from consideration, movants Eisner and Ivosevic have the next-largest

financial loss, a combined $1.3 million in total losses or $219,495.75 in post-October 30, 2015
losses as calculated above. The Court will first evaluate whether their losses are properly
combined (or "grouped") and whether they satisfy the requirements of Rule 23 to qualify as the
presumptively most adequate plaintiff. The Court will then evaluate whether this presumption, if
established, has been rebutted.

1.

Eisner and Ivosevic are properly grouped

The main objection to Eisner and Ivosevic's appointment as lead plaintiffs is that their
individual losses are improperly grouped together. See, e.g., Dkt. No. 25 Ex. 1 at 10. The
PSLRA explicitly contemplates that a "group of persons" may serve as lead plaintiff. See
15 U.S.C. § 78u-4(a)(3)(B)(iii)(I). "The majority of courts, including those in this District, ...
permit[] unrelated investors to join together as a group seeking lead-plaintiff status on a case-bycase basis, if such a grouping would best serve the class." Varghese v. China Shenghuo Pharm.
Holdings, Inc., 589 F. Supp. 2d 388, 392 (S.D.N.Y. 2008). In conducting this analysis, courts

5

This conclusion does not call into question the Court's decision to consolidate the cases as "involv[ing] a common
question oflaw or fact." Fed. R. Civ. P. 42(a); see also§ 78u-4(a)(3)(B)(ii) (requiring courts to decide any motion
for consolidation before any lead plaintiff motion).

9

evaluate whether "unrelated members of a group will be able to function cohesively and
effectively manage the litigation" by considering a number of factors, including: "(1) the
existence of a pre-litigation relationship between group members; (2) involvement of the group
members in the litigation thus far; (3) plans for cooperation; (4) the sophistication of its
members; and (5) whether the members chose outside counsel, and not vice versa." Id.
An analysis of these factors convinces the Court that Eisner and Ivosevic "would best
serve the class" as co-lead plaintiffs. Varghese, 589 F. Supp. 2d at 392. Although the two do not
have familial ties, see Beckman v. Enerl, Inc., No. 11-CV-5794 (PAC), 2012 WL 512651, at *4
(S.D.N.Y. Feb. 15, 2012), they are "long-time friends" and have a relationship that pre-dates this
action by almost a decade. Dkt. No. 14 Ex. C if 4. Eisner and Ivosevic have participated in at
least one joint strategy conversation to discuss their litigation plans and have conferred regarding
their counsel's ongoing investigation into Eros's alleged fraud. Id. iii! 10-13. They have also
represented that they are prepared to attend court proceedings, settlement conferences, and other
hearings when doing so "will be of benefit to the proposed Class." Id.

if 14. Finally, both Eisner

and Ivosevic are sophisticated investors, id. iii! 2-3, who decided to file a joint application for
appointment as lead plaintiff before approaching counsel. Dkt. No. 31 Ex. A iii! 4-6. The Court
also notes that this is not a situation where "the proposed group has been assembled as a
makeshift by attorneys for the purpose of amassing an aggregation of investors purported to have
the greatest financial interest in the action," Varghese, 589 F. Supp. 2d at 392, as Eisner has the
single largest post-October 30, 2015 losses of any movant.
An additional factor counsels in favor of appointing Eisner and Ivosevic as co-lead
plaintiffs. Eisner purchased 35,000 net shares during the Class Period, while Ivosevic sold some
of his shares in the days leading up to October 30, 2015 and the remaining shares in the days

10

following the Alpha Exposure report. Dkt. No. 14 Ex. B; see also In re Veeco Instruments, Inc.,
233 F.R.D. 330, 332 (S.D.N.Y. 2005) (net shares are "the number of shares retained at the end of
the class period"). If, as Popi alleges, a partial disclosure of Eros's fraud was made prior to
October 30, 2015, Ivosevic has an interest in pursuing that theory to maximize recovery for
himself and for the class. However, neither Eisner nor Ivosevic will be barred from recovery if
no partial disclosure was made before that date-as the table above indicates, Eisner and
Ivosevic have the greatest post-October 30, 2015 losses and the largest number of combined net
shares.
As a result, the Court concludes that Eisner and Ivosevic are a proper group under the
PSLRA and have the largest financial interest in this action.

2.

Eisner and lvosevic satisfy Rule 23

The next step in identifying the presumptively most adequate plaintiff is to ensure that the
person (or persons) with the largest financial interest "otherwise satisfies the requirements of
Rule 23." 15 U.S.C. § 78u-4(a)(3)(B)(iii)(I)(cc). When appointing a lead plaintiff under the
PSLRA, "the moving plaintiff must only make a preliminary showing that the adequacy and
typicality requirements have been met." Janbay v. Canadian Solar, Inc., 272 F.R.D. 112, 120
(S.D.N.Y. 2010)
The typicality requirement "is satisfied when each class member's claim arises from the
same course of events, and each class member makes similar legal arguments to prove the
defendant's liability." In re Drexel Burnham Lambert Grp., Inc., 960 F.2d 285, 291 (2d Cir.
1992). Here, Eisner and Ivosevic, like other putative class members, claim to have suffered
financial loss as a result of material misstatements made by Eros in its registration statement,
SEC quarterly reports, and public press releases before its IPO. See Maliarov Comp. iii! 1, 44-

11

60; Popi Comp. ilil 1, 46-61; Dkt. No. 14 at 3-5. Because Eisner and Ivosevic's claims "arise[]
from the same course of events" as those of other class members and they will "make[] similar
legal arguments to prove the defendant[s'] liability" under federal securities laws, the Court finds
that they satisfy the typicality requirement. In re Drexel Burnham Lambert Grp., Inc., 960 F.2d
at 291.
To satisfy the adequacy requirement, a lead plaintiff movant must show that "(1) [his
choice of] 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." Foley v. Transocean Ltd., 272 F.R.D. 126, 131 (S.D.N.Y. 2011). With respect to the
first prong, Eisner and Ivosevic have chosen Labaton Sucharow as their counsel and have
included a document demonstrating the extensive securities fraud class action experience of that
firm. See Dkt. No. 14 Ex. E (detailing, inter alia, successful PSLRA class action lawsuits
against prominent companies like AIG, Countrywide, and General Motors). Based on the
accomplishments described in this document and other movants' lack of objection to the
qualifications of counsel, the Court finds that Labaton Sucharow "is qualified, experienced, and
generally able to conduct the litigation." Foley, 272 F.R.D. at 131.
Eisner and Ivosevic also satisfy the other two prongs of the adequacy analysis. Although
some movants object to their appointment because a considerable amount oflvosevic's losses
pre-date the October 30, 2015 Alpha Exposure report, this fact does not put him in conflict with
other members of the class. To the contrary, his potential interest in expanding the recovery
period is in line with the class's interest in maximizing recovery. For this reason and the reasons
previously articulated, the Court is satisfied that Eisner and Ivosevic have "a sufficient interest in

12

the outcome of the case to ensure vigorous advocacy." Id. As a result, the Court is confident
that Eisner and Ivosevic together "will fairly and adequately protect the interests of the class."
Fed. R. Civ. P. 23(d).
Because Eisner and Ivosevic, properly grouped, have the largest financial interest in the
outcome of this case and satisfy the requirements of Rule 23, they are the presumptively most
adequate plaintiffs. See 15 U.S.C. § 78u-4(a)(3)(B)(iii)(I).
3.

The presumption of adequacy is not rebutted

The competing movants nevertheless argue that any presumption of adequacy is rebutted
because Eisner and Ivosevic, like Popi, are "subject to unique defenses." Id. § 78u4( a)(3 )(B)(iii)(Il)(bb ). On this point, the other movants repeat their argument that many of
Ivosevic's losses pre-date the October 30, 2015 disclosure. See, e.g., Dkt. No. 27 at 9-10. As the
Court has noted several times, Eisner and Ivosevic incurred losses both before and after October
30, 2015. Dkt. No. 14 Ex. B. As a result, they will not be precluded from recovery in the
absence of a partial disclosure prior to that date (and in fact have the largest combined losses
after October 30, 2015), but do have an interest in maximizing recovery if an earlier partial
disclosure is supported by the facts. As a result, the Court is satisfied that Eisner and Ivosevic
will fairly and adequately protect the interests of the class and, unlike Popi, are not subject to a
complete in-and-out trader defense. See 15 U.S.C. § 78u-4(a)(3)(B)(iii)(II); Topping, 95 F.
Supp. 3d at 618. As a result, the presumption of adequacy is not rebutted and the Court will
appoint Eisner and Ivosevic as lead plaintiffs.

III.

APPOINTMENT OF LEAD COUNSEL
The PSLRA provides that, subject to the approval of the Court, "[t]he most adequate

plaintiff shall, subject to the approval of the court, select and retain counsel to represent the
13

class." 15 U.S.C. § 78u-4(a)(3)(B)(v). "There is a strong presumption in favor of approving a
properly-selected lead plaintiffs decision as to counsel." Topping, 95 F. Supp. 3d at 623. Based
on the documents provided to the Court, Dkt. No. 14 Ex. E, and the adequacy analysis above, the
Court finds that Labaton Sucharow's extensive involvement in complex securities class action
litigation demonstrates that the firm "is qualified, experienced, and generally able to conduct the
litigation." Foley, 272 F.R.D. at 131. Furthermore, no movant objects to approval of the firm as
lead counsel. As a result, the Court approves Eisner and Ivosevic's selection of Labaton
Sucharow as lead counsel.

IV.

CONCLUSION
For the foregoing reasons, the Court grants the motions to consolidate Maliarov v. Eros

International PLC et al., 15-CV-8956 and Popi v. Eros International PLC et al., 16-CV-223.
The Court also grants Eisner and IvoseviC's motion for appointment as lead plaintiffs and
approves Labaton Sucharow as lead counsel. The remaining motions are denied. The Court will
schedule an Initial Pretrial Conference for the consolidated action by separate order.
This resolves Dkt. Nos. 6, 8, 11, 16, 19.

SO ORDERED.

1-,

2016
Dated: April
New York, New York

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