Reddy et al v. LongFin Corp. et al

Filing 210

ORDER: Accordingly, it is hereby ORDERED that a final version of Lead Plaintiffs proposed Class Notice, which includes revisions by the Court, is attached to this Order. IT IS FURTHER ORDERED that plaintiffs April 24, 2020 proposed schedule and pl an for disseminating class notice is approved. The Summary Notice filed with this Court as Exhibit B to Lead Plaintiffs April 24, 2020 filing, Dkt. No. 200, shall be sent to all class members with the Notice of Settlement that will be disseminated by the Securities and Exchange Commission ("SEC") in connection with Securities and Exchange Commission v. Longfin Corp., No. 18cv2977 (DLC) (S.D.N.Y. April 4, 2018), with Securities and Exchange Commission v. Longfin Corp., No. 19cv5296 (DLC) (S.D.N.Y. June 5, 2019). At that time, the Class Notice shall be published by Epiq Systems and Levi and Korsinsky, as well as published on a national wire service. IT IS FURTHER ORDERED that the opt-out period for class members shall close on 90 days from the mailing of the Summary Notice. IT IS FURTHER ORDERED that, by an accompanying Order of Reference, the claims against the Defaulting Defendants are referred to Magistrate Judge Lehrburger for an inquest on damages. (Signed by Judge Denise L. Cote on 5/14/2020) (jca)

Case 1:18-cv-02933-DLC-RWL Document 210 Filed 05/14/20 Page 1 of 7

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

DENISE COTE, District Judge:
On January 3, 2020, Lead Plaintiff Mohammad A. Malik (“Lead
Plaintiff”) moved for class certification and default judgment
against defendants Longfin Corp., Venkata S. Meenavalli, Vivek
K. Ratakonda, and Suresh Tammineedi (the “Defaulting
Defendants”).

On May 14, the Court granted the motion for class

certification, and appointed Lead Plaintiff as Class
Representative and Levi & Korsinsky, LLP as Class Counsel.

The

Court also dismissed without prejudice defendants Dorababu
Penumarthi and Andy Altahawi.

Accordingly, it is hereby

ORDERED that a final version of Lead Plaintiff’s proposed
Class Notice, which includes revisions by the Court, is attached
to this Order.
IT IS FURTHER ORDERED that plaintiff’s April 24, 2020
proposed schedule and plan for disseminating class notice is
approved.

The Summary Notice filed with this Court as Exhibit B

to Lead Plaintiff’s April 24, 2020 filing, Dkt. No. 200, shall
be sent to all class members with the Notice of Settlement that
will be disseminated by the Securities and Exchange Commission

Case 1:18-cv-02933-DLC-RWL Document 210 Filed 05/14/20 Page 2 of 7

(“SEC”) in connection with Securities and Exchange Commission v.
Longfin Corp., No. 18cv2977 (DLC) (S.D.N.Y. April 4, 2018), with
Securities and Exchange Commission v. Longfin Corp., No.
19cv5296 (DLC) (S.D.N.Y. June 5, 2019).

At that time, the Class

Notice shall be published by Epiq Systems and Levi and
Korsinsky, as well as published on a national wire service.
IT IS FURTHER ORDERED that the opt-out period for class
members shall close on 90 days from the mailing of the Summary
Notice.
IT IS FURTHER ORDERED that, by an accompanying Order of
Reference, the claims against the Defaulting Defendants are
referred to Magistrate Judge Lehrburger for an inquest on
damages.
Dated:

New York, New York
May 14, 2020
__________________________________
DENISE COTE
United States District Judge

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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, and Suresh
Tammineedi (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. 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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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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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, Plaintiff and Defendants have stipulated to their dismissal without prejudice from this
Action on the basis that they have no assets from which to recover. The Court granted dismissal
as to Altahawi and Penumarthi on [DATE]. Dismissal without prejudice means that the dismissal
is not binding on the Class, and claims against Altahawi and Penumarthi may still be brought by
individual Class members, or re-raised by the Class, subject to time limitations provided by law.

6.

What are the Class Representatives 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.

8.

When will there be any money available?
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. The Class Representative will
attempt to recover funds from the individual defaulting defendants in India and Singapore. Both
the SEC and the Class will attempt to recover as well from Longfin Corp. in an assignment
proceeding in New Jersey, Longfin Corp., to Anthony Sodono III, Esq., Dkt. No. p-0007-19. The
Class Representative is also contemplating an appeal of the Network 1 dismissal, which might yield
a recovery for the Class. There is no assurance that any of these efforts will be successful or that
any funds will be recovered by the Class.
DETERMINING IF YOU ARE A MEMBER OF THE CLASS

9.

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.

10.

Are there exceptions to being included in the Class?

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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.
11.

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.
YOUR OPTIONS AS A CLASS MEMBER

12.

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

13.

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.

14.

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

15.

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.

16.

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
o

Your name, address, and telephone number;
A statement confirming that you want to opt out of the Class;
The number of Longfin shares you purchased and sold during the Class Period; 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]

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17.

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

18.

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

19.

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 Representatives 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.

20.

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

21.

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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