Reddy et al v. LongFin Corp. et al

Filing 197

ORDER: The Court having revised the plaintiff's proposed class notice filed on March 10, 2020, it is hereby ORDERED that any proposed revisions to the attached draft of the class notice are due April 17, 2020. (Signed by Judge Denise L. Cote on 4/7/2020) (jca)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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IN RE LONGFIN CORP. SECURITIES CLASS
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ACTION LITIGATION
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18cv2933 (DLC)
ORDER

DENISE COTE, District Judge:
The Court having revised the plaintiff’s proposed class
notice filed on March 10, 2020, it is hereby
ORDERED that any proposed revisions to the attached draft
of the class notice are due April 17, 2020.
Dated:

New York, New York
April 7, 2020
__________________________________
DENISE COTE
United States District Judge

Draft: April 7, 2020
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK

NOTICE OF CLASS CERTIFICATION
If You Bought Longfin Class A Common Stock,
You May Be A Member of a Certified Class
A court authorized this Notice. This is not a solicitation from a lawyer. You are not being sued.
•

A class action lawsuit is pending in the United States District Court for the Southern District of New
York (the “Court”) against Longfin Corp., Venkat S. Meenavalli, Vivek Kumar Ratakonda, Andy
Altahawi, Suresh Tammineedi, and Dorababu Penumarthi (together, the “Defendants”). The lawsuit
alleges that Defendants violated U.S. securities laws in two ways: by soliciting the sale of and trading
unregistered shares of Longfin Class A common stock (“Longfin Stock”), and by artificially inflating
the trading price of Longfin Stock by making false statements.

•

The Court decided that this lawsuit should proceed as a class action on behalf of a group of people and
entities that may include you. The Class consists of all persons or entities who purchased or otherwise
acquired Longfin Stock during the period from December 13, 2017 through April 6, 2018, inclusive
(the “Class Period”), and were injured thereby.

•

This Class consists of two subclasses. The first subclass includes all who purchased Longfin Stock
either directly from Defendants or on the open market as a result of Defendants soliciting their
purchases (the “Securities Act Subclass”). The second subclass includes all who purchased Longfin
Stock on the open market contemporaneously with Defendants’ sales of Longfin Stock (the “20A
Subclass”).

YOUR RIGHTS AND OPTIONS IN THIS LAWSUIT
Stay in the lawsuit. Await the Outcome. Share
in possible benefits.
Give up certain rights.
Do Nothing

Ask to be Excluded

By doing nothing, you are choosing to stay in the
Class. You will be permitted to share in any
recovery that may result from this Class Action, but
you will give up your rights to sue the Defendants
in a separate lawsuit for the claims made in this
class action. In addition, you will be bound by past
and any future court rulings on, or settlement of,
the claims against the Defendants.
Get out of this lawsuit. Get no benefits from this
lawsuit. Keep your rights.
If you opt out of the Class (meaning you state in
writing that you do not want to be included in this
lawsuit), you will not be entitled to any recovery
that may result from this Class Action and you will

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Draft: April 7, 2020
not be bound by any past or future rulings in this
lawsuit. You will be free to pursue your own claims
against the Defendants on your own or as part of a
different lawsuit.
THESE RIGHTS AND OPTIONS
– AND THE DEADLINES TO EXERCISE THEM –
ARE EXPLAINED IN THIS NOTICE
BASIC INFORMATION ABOUT THE LAWSUIT
1.

Why did I get this Notice?
Records indicate that you may have purchased Longfin Stock between December 17, 2017 and
April 6, 2018. You have legal rights and options that you may exercise. Judge Denise Cote of the
United States District Court for the Southern District of New York is overseeing this class action.
The case is known as In Re Longfin Corp. Securities Class Action Litigation, Lead Case No.: 1:18cv-2933-DLC (the “Action”).

2.

What is this Action about?
This Action alleges that the Defendants perpetrated a securities fraud that included false statements
and insider trading. The alleged scheme included (1) the Defendants improperly obtaining a listing
for Longfin Stock on the NASDAQ stock exchange, (2) the Defendants manipulating the price of
Longfin Stock after that listing by making false and misleading statements about Longfin’s
acquisition of Ziddu.com, and after the Longfin Stock price rose in response to this news, (3) the
Defendants wrongfully profiting from that inflated stock price by illegally selling their own Longfin
Stock between December 13, 2017 and March 22, 2018. The price of Longfin Stock dropped
precipitously when the Securities and Exchange Commission (“SEC”) announced that it was
investigating Longfin.

3.

What is a class action?
In a class action lawsuit, a “Class Representative” (in this case, Mohammad A. Malik (“Malik”)),
sues defendants on behalf of himself and others who have similar claims. These people and entities
together are called a “Class” or “Class Members.” One court resolves the issues for all Class
Members except for those who choose to exclude themselves.

4.

What has happened in the Action?
The SEC has filed two actions against several of the defendants in the Action. In one action,
known as Securities and Exchange Commission v. Longfin Corp., No. 18-cv-2977-DLC, the SEC
sued Longfin Corp., Venkat S. Meenavalli, Andy Altahawi, Suresh Tammineedi, and Dorababu
Penumarthi. Final judgments that require the defendants collectively to pay $26,445,319.20 in
disgorgement and civil penalties to the SEC have been entered in that case. In a second action,
known as Securities and Exchange Commission v. Longfin Corp., No. 19-cv-5296-DLC, the SEC
sued Longfin Corp. and Venkat S. Meenavalli. Final judgments that require the defendants
collectively to pay $7,155,848 in disgorgement and civil penalties to the SEC have been entered
in that case.

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Draft: April 7, 2020
Your ability to receive any of the money collected by the SEC will not be affected by your
participation in this Action. Whether you opt out of this Action or choose to do nothing and
remain in this Action, you will have the same right to participate in any distribution of the funds
the SEC has recovered.
This Action was filed on April 3, 2018. The complaint was amended on July 27, 2018 and again
on June 28, 2019. Among the defendants named in the complaints in this Action, although not in
the two SEC actions, was the underwriter for the issuance of the Longfin Stock, whose name is
Network I. The Court dismissed the claims against Network 1 on July 29, 2019. On [DATE], the
Court certified the class, which is defined above.
5.

What is the current status of the lawsuit?
Default has been entered against defendants Longfin Corp., Venkat S. Meenavalli, Vivek Kumar
Ratakonda, and Suresh Tammineedi. The Court has ordered that a hearing on Plaintiff’s Motion
for Default Judgment will be on [DATE]. As to defendants Andy Altahawi and Dorababu
Penumarthi, who have not defaulted, the Court has ordered that fact discovery will close on May
29, 2020 and that expert discovery will close on August 7. The joint pretrial order is due September
4, 2020, with trial commencing on [DATE]. These dates may be subject to change.

6.

What is the Class Representative asking for?
The Class Representative is asking for money to compensate Class Members for damages caused
by Defendants’ conduct, as well as pre-judgment and post-judgment interest and their reasonable
attorneys’ fees and costs. The Class Representative is also asking this Court to declare that
Defendants offered and sold unregistered securities in violation of federal securities laws.

7.

Is there any money available now?
No. If the Class receives any money, whether from a settlement with a defendant or because of a
determination by the Court or at trial, you will receive a notice.
DETERMINING IF YOU ARE A MEMBER OF THE CLASS

8.

How do I know if I am a Class Member?
You are a member of the class if you purchased or otherwise acquired Longfin Stock during the
period from December 13, 2017 through April 6, 2018, inclusive.

9.

Are there exceptions to being included in the Class?
Yes. You are NOT a Class Member if you are: (i) a Defendant in this Action; (ii) a Defendant’s
immediate family member; (iii) any person who was an officer or director of Longfin during the
Class Period; (iv) any firm, trust, corporation, or other entity in which a Defendant has or had a
controlling interest; or if you are (v) the legal representatives, affiliates, heirs, successors in-interest,
or assigns of any such excluded person or entity.

10.

Are you still not sure if you’re included?
If you are still not sure whether you are included in the Class, you can get free help by calling or
writing to the Plaintiff’s lawyers in this case at the phone numbers or addresses listed in response
to question 17.

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Draft: April 7, 2020
YOUR OPTIONS AS A CLASS MEMBER
11.

What are my options as a Class Member?
You must decide whether to stay in the Class or opt out of the Class.

12.

What happens if I choose to stay in the Class?
If you stay in the Class, you will be permitted to share in a recovery, if any, that may occur in this
Action. But you give up any rights to sue the Defendants separately about the same legal claims in
this lawsuit. You also will be legally bound by all of the Orders the Court issues and Judgments
the Court makes in this class action, even if there is no recovery.

13.

How do I stay in the Class?
You do not have to do anything at this time to stay in the Class.

14.

What happens if I opt out of the Class?
If you opt out of the Class (by stating in writing that you do not want to be included in the Class in
this Action), you will give up the right to participate in any recovery that may occur. But you will
keep any rights you may currently have to sue the Defendants regarding the legal claims at issue in
this lawsuit. You also will not be bound by the Orders the Court issues and Judgments the Court
makes in this class action.

15.

How do I opt out of the Class?
If you do not want to remain a member of the Class, you must send a written “Request to Opt Out”
to the Notice Administrator so it is received no later than [DATE] 2020. Your written request must
include:
o
o
o

Your name, address, and telephone number;
A statement confirming that you want to opt out of the Class; and
The case name and number, “In Re Longfin Corp. Securities Class Action Litigation, Lead Case
No.: 1:18-cv-2933-DLC.”

Your request to Opt Out must be sent to the following address:
[NOTICE ADMINISTRATOR ADDRESS INFORMATION]
16.

What happens if I do not do anything?
By doing nothing, you are choosing to stay in the Class. You don’t have to do anything now if you
want to stay in the Class. If you stay in the Class and the Class Representative obtains money or
benefits, you will be notified about how to apply for a share. Regardless of whether the plaintiff
wins or loses at trial, you will not be able to sue, or continue to sue the Defendants—as part of any
other lawsuit—about the same legal claims that are the subject of this Action. You will also be
legally bound by all of the Orders the Court issues and Judgments the Court makes in this Action.
THE LAWYERS REPRESENTING YOU

17.

As a Class member, do I have a lawyer representing my interests in this Class Action?

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Draft: April 7, 2020
Yes. The Court has appointed lawyers to represent you and other Class members. These lawyers
are called Class Counsel. The following lawyers are representing the Class:
Donald J. Enright, Esq.
Elizabeth K. Tripodi, Esq.
LEVI & KORSINSKY, LLP
1101 30th Street, N.W., Suite 115
Washington, DC 20007
Telephone: [phone]
www.zlk.com

18.

Eduard Korsinsky, Esq.
LEVI & KORSINSKY, LLP
55 Broadway, 10th Floor
New York, NY 10006
Telephone: [phone]
www.zlk.com

How will the lawyers be compensated, and will the Class Representative receive
compensation?
If recovery is obtained for the Class, Class Counsel will request from the Court an award for
attorneys’ fees and expenses. Class Counsel may also ask the Court to approve reasonable
incentive awards for the Class Representative. If approved, these fees and expenses and incentive
award will either be paid from the recovery obtained for the Class or separately by the Defendants.

19.

Should I get my own lawyer?
You do not need to hire your own lawyer. However, you are welcome to hire your own lawyer at
your own expense. If you hire a lawyer to speak for you or to appear in Court, your lawyer must
file a Notice of Appearance.
GETTING MORE INFORMATION

20.

Where do I get more information?
Complete copies of the Court filings and rulings are available at [WEBSITE WITH LITIGATION
DETAILS], or by writing to [NOTICE ADMINISTRATOR ADDRESS].
Please do not contact the Court or Judge Cote.

Dated: [DATE]

BY ORDER OF THE UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

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