Wiley v. Paysafe Limited et al

Filing 67

OPINION AND ORDER granting (19 in 1:21-cv-10611-ER-KHP) MOTION to Appoint Robert J. Viani and Eric C. Price, as trustee for the Eric C. Price & Kristen B. Hennig-Price Rev. Living Trust UA 05/27/2015 to serve as lead plaintiff(s) . MOTION to Appoint Counsel filed by Eric C. Price, Robert J. Viani; denying (16 in 1:21-cv-10611-ER-KHP); denying (21 in 1:21-cv-10611-ER-KHP, denying (23 in 1:21-cv-10611-ER-KHP); denying (30 in 1:21-cv-10611-ER-KHP); denying (36 in 1:21-cv-10611 -ER-KHP); denying (37 in 1:21-cv-10611-ER-KHP); denying (6 in 1:22-cv-00567-ER-KHP); denying (9 in 1:22-cv-00567-ER-KHP). For the reasons set forth above, the Court GRANTS the motion at ECF No. 19 of Viani and Price to be appointed Lead Plaint iffs and to have their choice of counsel approved as lead counsel. All other motions at ECF Nos. 16, 21, 23, 30, 36, and 37 are DENIED. The pending motions in related case O'Brien, 22-cv-567 at ECF Nos. 6 and 9 are also DENIED. IT IS FURTHER ORDERED that Plaintiffs' Amended Complaint in the consolidated action shall be due 45 days from the date of this Opinion and Order. Defendants' Motions to Dismiss shall be due 60 days after the filing of the Amended Complaint. Plaintiffs shall have 60 days to file an opposition to the motion. Defendants shall have 30 days to file a reply in support of the Motions to Dismiss. IT IS FURTHER ORDERED that discovery is stayed pending resolution of the Motions to Dismiss. SO ORDERED. (Signed by Magistrate Judge Katharine H. Parker on 5/10/2022) Filed In Associated Cases: 1:21-cv-10611-ER-KHP, 1:22-cv-00567-ER-KHP (vfr)

Case 1:21-cv-10611-ER-KHP Document 67 Filed 05/10/22 Page 1 of 18

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
-----------------------------------------------------------------X
IN RE PAYSAFE LIMITED f/k/a FOLEY TRASIMENE
ACQQUISITION CORP. II SECURITIES LITIGATION,
________________________________________________

5/10/2022
Master File No.
1:21-CV-10611-ER-KHP
OPINION AND ORDER

KATHARINE H. PARKER, United States Magistrate Judge:
On February 8, 2022, seven motions were filed by movants seeking to (1)
consolidate the related actions; (2) appoint Lead Plaintiff, and (3) approve Lead Counsel.
(ECF Nos. 16 1, 19, 21 2, 23 3, 30 4, 36, 37 5.) Of the seven movants seeking to be made Lead
Plaintiff only two remain to be considered – Robert J. Viani and Eric C. Price Group
(hereafter, “Viani/ Price Group”) and Campbell Capital Management (“CCM”). Specifically,
class members Robert J. Viani (“Viani”) and Eric C. Price (“Price”) moved this Court to
appoint Viani and Price as Lead Plaintiff and approve Kessler Topaz Meltzer & Check, LLP as
Lead Counsel for the class. (ECF No. 19.) Alternatively, CCM moves this Court to appoint
CCM as Lead Plaintiff and approve Glancy Prongay & Murray LLP as Lead Counsel. (ECF No.

By motion dated February 8, 2022, movant Donald Jon Lawrence moved the court to (1) consolidate the
related actions, (2) appoint movant to serve as Lead Plaintiff, and (3) approve Movant’s selection of the Rosen
Law Firm, P.A. as Lead Counsel for the litigation. (ECF No. 16.)

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On February 8, 2022, Kudzanai Muringi moved the court to (1) consolidate the related actions, (2) appoint
Muringi as Lead Plaintiff, and (3) approve Faruqi & Faruqi, LLP as Lead Counsel for the class. (ECF No. 21.)

2

On February 8, 2022, Adam Berry moved the court to (1) consolidate the related actions, (2) appoint Berry as
lead plaintiff, and (3) approve Johnson Fistel, LLP as lead counsel for the proposed class. (ECF No. 23.)

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On February 8, 2022, Richard Cavalier, Samih Ajami, and Alexander Soo moved the court to (1) consolidate
the above-captioned related cases, (2) appoint Movants as Lead Plaintiffs, and (3) approve Bernstein Liebhard
LLP as Lead Counsel for the litigation. (ECF No. 30.)

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Nechuma Terebelo and Ryan Schick moved this Court to (1) consolidate the above-captioned actions; (2)
appoint them as Lead Plaintiff; and (3) approve Bragar Eagel & Squire, P.C. (“BES”) as Lead Counsel. (ECF No.
37.)

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36.) The Viani/ Price Group also submitted further support for their Motion. (ECF No. 49.)
Additionally, all movants request that the related cases (Wiley, 21-CV-10611; and O’Brien,
22-CV-567) be consolidated.
On May 5, 2022, the Court granted the request for consolidation with the amended
caption as represented above.
The Court now appoints Viani and Price as Lead Plaintiff and Kessler Topaz Meltzer &
Check, LLP as lead counsel. (ECF No. 66.)
FACTS ALLEGED IN THE COMPLAINTS
The above-captioned actions were commenced as purported securities class actions
on behalf of a class of persons and entities that purchased or otherwise acquired Paysafe
and/or FTAC securities between December 7, 2020, and November 10, 2021, against
Paysafe Limited (“Paysafe” or the “Company”) f/k/a Foley Trasimene Acquisition Corp. II
(“FTAC”), certain of Paysafe’s executive officers and directors, and certain of FTAC’s former
executive officers and directors (collectively, “Defendants”) under the Securities Exchange
Act of 1934 (the “Exchange Act”), 15 U.S.C. §§ 78j(b) and 78t(a).
Paysafe is incorporated under the laws of Bermuda, with its principal executive
offices located in Bermuda. Wiley Compl. at ¶ 15. Paysafe’s common shares trade on the
New York Stock Exchange (“NYSE”) under the symbol “PSFE.” Id. Paysafe provides end-toend payment solutions through three primary business segments: Integrated Processing,
which processes payments for merchants; Digital Wallet, which enables consumers to make
digital payments for purposes such as e-commerce, online gambling, and gaming; and eCash

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Solutions, which allows consumers to use cash for digital payments for purchasing prepaid
digital vouchers.
FTAC was a special purpose acquisition company (“SPAC”) formed for the purpose of
effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization,
or similar business combination. Id. at ¶ 22. On December 7, 2020, FTAC announced that it
and Paysafe Group Holdings Limited entered into a definitive agreement and plan of
merger. Id. at ¶ 23. On closing of the transaction, the newly combined company was to
operate as Paysafe with its shares trading under the symbol “PSFE.” Id. The merger was
completed on March 30, 2021. Id. at ¶ 24.
On December 7, 2020, FTAC issued a press release titled “Foley Trasimene
Acquisition Corp. II and Paysafe, A Leading Global Payments Provider Focused on Digital
Commerce and iGaming, Announce Merger.” Id. at ¶ 25. The press release highlighted
several aspects of Paysafe’s business and touted its growth opportunities in a large
addressable market. Id.
On May 11, 2021, Paysafe issued a press release announcing its first quarter 2021
financial results. Id. at ¶ 26. The press release announced, among other things, an increase
in revenue of 5% and an increase in total payment volume of 8%. Id. The press release also
reaffirmed the Company’s 2021 yearly outlook. Id. Defendant McHugh, the Company’s
CEO, stated that the company was “well positioned to deliver consistent double-digit
growth[.]” Id. On August 16, 2021, Paysafe issued a press release announcing its second
quarter 2021 financial results. Id. at ¶ 27. The press release announced, among other

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things, an increase in revenue of 13% and an increase in total payment volume of 41%. Id.
The Company again reaffirmed its 2021 full year outlook. Id.
The Actions allege that Defendants made materially false and/or misleading
statements and failed to disclose material adverse facts about the Company’s business,
operations, and prospects. Id. at ¶ 28. Specifically, the Actions allege that Defendants
failed to disclose to investors that: (1) Paysafe was being negatively impacted by gambling
regulations in key European markets; (2) Paysafe was encountering performance challenges
in its Digital Wallet segment; (3) new eCommerce customer agreements were being pushed
back; and (4) that, as a result of the foregoing, Defendants’ positive statements about the
Company’s business, operations, and prospects were materially misleading and/or lacked a
reasonable basis. Id.
The full truth allegedly emerged on November 11, 2021, when, before the market
opened, Paysafe issued a press release titled “Paysafe Reports Third Quarter 2021 Results.”
Id. at ¶ 29. The press release disclosed that Paysafe was revising its 2021 guidance due to
“[g]ambling regulations and softness in key European markets and performance challenges
impacting the Digital Wallet segment” and “[t]he modified scope and timing of new
eCommerce customer agreement relative to the Company’s original expectations for these
agreements.” Id. The press release disclosed that the Company would be revising its
financial guidance downward for 2021. Id. On this news, the Company’s share price fell
more than 40%, on unusually heavy trading volume.
The Wiley Complaint alleges the November 11, 2021 was the corrective disclosure.
The O’Brien complaint pleads two corrective disclosures: the first on August 16, 2021; and
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the second on November 11, 2021. See O’Brien, ECF No. 1, ¶¶ 7-11. Specifically, the
O’Brien complaint alleges that “investors began to learn the truth about Paysafe’s prospects
on August 16, 2021, when the Company announced its financial results for the second
quarter of 2021 and . . . attributed [its] weak guidance to challenges in the Company’s
Digital Wallet segment, including ‘some softness in the [ ] online gambling space’ in
European markets” and that, “[o]n this news, the price of Paysafe common stock declined
$1.58 per share, or more than 15%, from a close of $10.20 per share on August 13, 2021, to
close at $8.62 per share on August 16, 2021.” Id. at ¶ 7.9. It asserts the full truth came out
on November 11, 2021. Id. at 10.
FACTS RELEVANT TO APPOINTMENT OF LEAD PLAINTIFF/COUNSEL
CCM, represented by the Los Angeles-based firm Glancy Prongay & Murray LLP
(“GPM”), is an investment advisory firm located in Miami, Florida. Clay Campbell is the
President and Chief Investment Officer of CCM. Campbell is a retired Certified Public
Accountant. He has attested that he understands the obligations of lead plaintiff and will
dutifully represent the class. (ECF No. 41-4.) Campbell himself, as well as approximately
100 of CCM’s various clients, invested in Paysafe and lost money. The aggregate loss
amounts to approximately $2.9 million. CCM’s clients all signed assignment agreements
assigning to CCM all interest they may have arising from violations of the federal securities
laws in connection with their purchase or acquisition of Paysafe securities and appointing
CCM as attorney-in-fact for purposes of exercising all powers relating to the causes of action
asserted in this matter. CCM, as assignee, agreed to remit any proceeds received as a result
of the assignment to the assignors (its clients). (Id.) The individual losses of CCM’s clients
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range from a few thousand dollars to a maximum of approximately $215,000. (ECF No. 413)
GPM represents investors, consumers and employees and has prosecuted class
action cases and complex litigation in federal and state courts throughout the country. (ECF
No. 41-5.) It has offices in New York and California. It represents that it has served as lead
and co-lead counsel in securities class actions and has been recognized by the Institutional
Shareholder Services unit of RiskMetrics Group as a top plaintiffs’ law firm in its annual
Securities Class Action Services report since 2003. (Id.) It has served as co-lead counsel in
cases in this District as well. See, e.g., Lapin v. Goldman Sachs, 03-cv-850; In re Liven, Inc.
Noteholders Litigation, 99-cv-9425, In re Lumenis, Ltd. Securities Litigation, 02-cv-1989, and
Ree v. Procom Technologies, Inc., 02-cv-7613.
Viani is a resident of New York and owns forty restaurant franchise locations. He has
an associate’s degree from Dutchess Community College and states he has invested in the
stock market since 2005. (ECF No. 22-3.) Price is a resident of California who owns and
manages rental properties and the investments of a family trust. (Id.) He received a
bachelor’s degree in finance from Pacific Union College and an MBA from Pepperdine
University and has been investing in the stock market for 24 years. (Id.) Both individuals
invested in Paysafe and lost money. Viani personally suffered a loss of approximately $2.54
million and Price personally suffered a loss of approximately $1.27 million. (ECF No. 22-2.)
They both are represented by Kessler Topaz Meltzer & Check, LLP (“KT”). They attest that
prior to seeking appointment as Lead Plaintiff they participated in a joint conference call to
formalize their commitment to jointly prosecuting this litigation and their duties if selected
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as lead plaintiff. They agree to make decisions jointly, taking into consideration legal advice
from KT. They state they are confident in their ability to reach joint decisions regarding
litigation matters. (ECF No. 22-3.)
KT is a litigation firm with offices in Pennsylvania and California that specializes in
the prosecution of securities class actions. (ECF No. 22-5.) It has served as lead or co-lead
counsel in various securities class actions, including in this District. See, e.g., In re Wachovia
Preferred Securities and Bond/Notes Litigation, 09-cv-6351, In re Longtop Financial Tec. Ltd.
Securities Litigation, 11-cv-3658, Operative Plasterers and Cement Masons Int’l Assoc. Local
262 Annuity Fund v. Lehman Brothers Holdings, Inc., 08-cv-5523, and In re Satyam Computer
Services, Ltd. Sec. Litigation, 09-md-02027. (Id.)
LEGAL STANDARD
The Private Securities Litigation Reform Act (“PSLRA”) sets forth the standard for
selecting a lead plaintiff in class actions brought pursuant to the Securities Exchange Act. As
an initial matter, the plaintiff who files the first action must publish notice to the class
within twenty (20) days of filing the action, informing class members of (1) the pendency of
the action; (2) the claims asserted therein; (3) the purported class period; and (4) the right
to move the court to be appointed as lead plaintiff within sixty days of the publication of
the notice. See 15 U.S.C. § 78u–4(a)(3)(A)(I). Within sixty days after publication of the
notice, any member or group of members of the proposed class may apply to the court to
be appointed as lead plaintiff, whether or not they have previously filed a complaint in the
action. See id. § 78u–4(a)(3)(A)-(B).

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Next, the PSLRA provides that within ninety days after publication of notice, the
Court shall consider any motion made by a purported class member and shall appoint as
lead plaintiff the “member or members of the purported plaintiff class that the court
determines to be most capable of adequately representing the interest of class members.”
Id. § 78u-4(a)(3)(B). The PSLRA directs that:
the court shall adopt a presumption that the most adequate
plaintiff in any private action arising under this chapter is the
person or group of persons that—
(aa) has either filed the complaint or made a motion in response to
a notice . . . ;
(bb) in the determination of the court, has the largest financial
interest in the relief sought by the class; and
(cc) otherwise satisfies the requirements of Rule 23 of the Federal
Rules of Civil Procedure.
Id. § 78u–4(a)(3)(B)(iii)(I). The Court's identification of the presumptively most adequate
lead plaintiff may be rebutted if class members offer evidence that the presumptive lead
plaintiff: (1) “will not fairly and adequately protect the interests of the class”; or (2) “is
subject to unique defenses that render such plaintiff incapable of adequately representing
the class.” Id. § 78u–4(a)(3)(B)(iii)(II).
A Magistrate Judge may issue an order appointing lead plaintiff and approving lead
counsel under Rule 72 of the Federal Rules of Civil Procedure. See City of Hollywood Police
Officers Ret. Sys. v. Henry Schein, Inc., 2019 WL 13167890, at *1 n.1 (E.D.N.Y. Dec. 23, 2019)
(collecting cases); Salim v. Mobile TeleSystems PJSC, 2019 WL 11095253, at *1 n. 2 (E.D.N.Y.
Sept. 11, 2019); In re VEON Ltd. Sec. Litig., 2022 WL 1284547, at *1 (S.D.N.Y. Apr. 29, 2022)
(Magistrate Judge Wang granting appointments of lead counsel and lead plaintiff).

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a. Both Applications are Timely
The PSLRA allows any member of the class, or group of class members, to move for
appointment as lead Plaintiff within sixty days of the publication of notice that the first
action has been filed. See id. § 78u–4(a)(3)(A)(I)(II). In this case, in connection with the
filing of the first-filed action, Wiley, notice was published in Business Wire on December 10,
2021, alerting investors to the pendency of the action and informing them of the February
8, 2022, deadline to seek appointment as Lead Plaintiff. See Amjed Decl., Ex. D, ECF No. 22.
Here, both movants satisfied this first requirement by filing their respective motions to be
appointed as lead plaintiff by February 8, 2022.
b. Largest Financial Interest
The PSLRA presumes that the movant or group of movants asserting the largest
financial interest in the relief sought by the class and who otherwise satisfy the
requirements of Rule 23 is the most adequate plaintiff. See 15 U.S.C. § 78u–4(a)(3)(B)(iii).
Courts in the Second Circuit have primarily looked to movants’ asserted losses, as calculated
under the Last-In, First-Out (“LIFO” 6) methodology, when assessing financial interest under
the PSLRA.
Here, Viani and Price have the largest financial interest because they suffered
combined losses of approximately $3,819,459 on a LIFO basis in connection with their Class
Period transactions in Paysafe and FTAC securities. (See Amjed Decl., Exs. A-B; see also ECF
No. 49.) Viani personally suffered a loss of approximately $2.54 million and Price personally

LIFO is the preferred and most-widely-accepted methodology for calculating movants’ losses. See Bo Young
Cha v. Kinross Gold Corp., 2012 WL 2025850, at *3 (S.D.N.Y. May 31, 2012) (observing that “the overwhelming
trend . . . nationwide has been to use LIFO”). The movants’ LIFO losses are taken from their respective filings.

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suffered a loss of approximately $1.27 million. In contrast, CCM has a loss of approximately
$2,902,048 via assignments from 101 individuals and entities.
Though the PSLRA expressly permits a “person or group of persons” to be appointed
lead plaintiff, Id. § 78u–4(a)(3)(b)(iii)(I), the PSLRA does not define what a “group” can or
should be, nor how its “members” must be related to one another. See In re eSpeed, Inc.
Sec. Litig., 232 F.R.D. 95, 99 (S.D.N.Y.2005) (“[T]he [PSLRA] does not specify whether the
‘members' must be related in some fashion in order to qualify as an appropriate lead
plaintiff group.”). Historically, district courts have been divided over whether a group of
unrelated investors such as Viani and Price constitutes a “group of persons” that may be
appointed lead plaintiff. See id.; In re Star Gas Sec. Litig., 2005 WL 818617, at *4 (D. Conn.
Apr. 8, 2005) (noting that some courts forbid the aggregation of unrelated plaintiffs while
other courts accept a proposed group of lead plaintiffs without scrutiny).
But the majority of courts, including those in this District, have permitted unrelated
investors to join together as a group seeking lead-plaintiff status on a case-by-case basis, if
such a grouping would best serve the class. See, e.g., In re Oxford Health Plans, Inc. Sec.
Litig., 182 F.R.D. 42, 49 (S.D.N.Y. 1998) (“Because the PSLRA does not recommend or delimit
a specific number of lead plaintiffs, the lead plaintiff decision must be made on a case-bycase basis, taking account of the unique circumstances of each case.”).
Accordingly, a proposed group must proffer an evidentiary showing that unrelated
members of a group will be able to function cohesively and to effectively manage the
litigation apart from their lawyers before its members will be designated as presumptive
lead plaintiffs. Factors that courts have considered when evaluating whether a group's
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members will function cohesively and separately from their lawyers include evidence of: (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.
See, e.g., Freudenberg v. E*Trade Fin. Corp., 2008 WL 2876373, at *4 (S.D.N.Y. July 16, 2008)
(permitting proposed group whose members “submit that they have a longstanding prelitigation relationship and a clear understanding as to consultation, information sharing, and
management of the litigation”); Reimer v. Ambac Fin. Group, Inc., 2008 WL 2073931, at *3
(S.D.N.Y. May 9, 2008) (proposed group held joint conference calls to formulate strategy).
However, courts in this District do not hesitate to deny a proposed group's motion
for lead-plaintiff status if the movants have not provided a sufficient evidentiary basis for
aggregation or if the court otherwise is persuaded that 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. See, e.g.,
Goldberger v. PXRE Group, Ltd., 2007 WL 980417, at *5 (S.D.N.Y. Mar. 30, 2007) (rejecting
proposed group that “shares only this lawsuit in common” and suspecting the group was
the result of the “type of lawyer-driven action that the PSLRA eschews”); In re Doral Fin.
Corp. Sec. Litig., 414 F. Supp. 2d 398, 401–02 (S.D.N.Y. 2006) (rejecting groups of unrelated
investors, stating that “by allowing attorneys to designate otherwise unrelated plaintiffs as
a purported ‘group,’ and by allowing unrelated groups to aggregate investments in an effort
to generate the ‘largest financial interest,’ a strong possibility emerges that lawyers will
form such groups to manipulate the selection process, and thereby gain control of the
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litigation”); In re Pfizer Inc. Sec. Litig., 233 F.R.D. 334, 337 (S.D.N.Y. 2005) (rejecting request
to aggregate when “[n]othing before the Court indicates that this aggregation is anything
other than an attempt to create the highest possible ‘financial interest’ figure under the
PSLRA”); In re Razorfish, Inc. Sec. Litig., 143 F. Supp. 2d 304, 308 (S.D.N.Y. 2001) (rejecting
proposed group because it “is simply an artifice cobbled together by cooperating counsel
for the obvious purpose of creating a large enough grouping of investors to qualify as ‘lead
plaintiff’”).
This skepticism is consistent with core aims of the PSLRA: shifting control of the
litigation from the lawyers to the investors and preventing “the manipulation by class action
lawyers of the clients whom they purportedly represent.” H.R. Conf. Rep. 104–369, at 31,
as reprinted in 1995 U.S.C.C.A.N. 730, 730; see also In re Donnkenny Inc. Sec. Litig., 171
F.R.D. 156, 157–58 (S.D.N.Y. 1997) (“One of the principal legislative purposes of the [PSLRA]
was to prevent lawyer-driven litigation. . . . To allow lawyers to designate unrelated
plaintiffs as a ‘group’ and aggregate their financial stakes would allow and encourage
lawyers to direct the litigation.”).
Judge Castel succinctly summarized the state of the law in this District as follows:
The issue is not whether losses or holdings may be aggregated by
members of a group seeking to become the lead plaintiff;
indisputably, they may. But to enjoy the rebuttable presumption
that the statute confers, there must be some evidence that the
members of the group will act collectively and separately from their
lawyers.
In re Tarragon Corp. Sec. Litig., 2007 WL 4302732, at *2 (S.D.N.Y. Dec. 6, 2007) (citation
omitted).

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In this case, Viani and Price did not have a relationship before this litigation. But,
they submitted an affidavit describing their decision to participate in this case and how they
will cooperate on decisions concerning this case that affect the putative class. Both
individuals are business people familiar with investing and sophisticated investors. It is
unclear to this Court exactly how Viani and Price each found their way to the KT firm,
though the Court assumes they both saw notice of the litigation published by the KT firm
and reached out to KT as a result.
CCM had a pre-existing relationship with all of its clients and they with each other
via CCM. Because of the assignment of claims to CCM, there is no chance of disagreement
between and among the various client – CCM as an entity is the proposed Plaintiff with the
injury. As an investment advisory firm, CCM is sophisticated, as is its principal Clay
Campbell. CCM has a smaller financial stake in the outcome of the litigation than Viani and
Price and the assignments require CCM to relinquish proceeds from the litigation to its
clients. 7
c. Requirements of Rule 23
The final requirement for selecting a lead plaintiff requires that the lead plaintiff
must also “otherwise satisf[y] the requirements of Rule 23 of the Federal Rules of Civil
Procedure” in order to trigger the presumption of adequacy. See 15 U.S.C. § 78u–

The Court notes that this fact does not necessarily deprive CCM of standing in this matter. A valid
assignment gives a plaintiff standing to pursue an assignor's claims, even if the assignee will not receive any
pecuniary gain from pursuing the action and would otherwise not have standing. Sprint Comm. Co., L.P. v.
APCC Services, Inc., 554 U.S. 269, 286-287 (2008) (allowing an assignee to bring suit, even though the assignee
had agreed to remit any recovery to the assignor of the legal claim); Cordes & Co. v. A.G. Edwards & Sons, Inc.,
502 F.3d 91, 102 (2d Cir.2007) (“It is indeed commonplace for an assignee to institute or continue an action of
his or her assignor on an assigned claim even though he or she, apart from the assignment, is without
standing, and the court, apart from the assignment, would be without power to decide the case.”).

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4(a)(3)(B)(iii)(I)(cc). Rule 23(a) provides that a part or group of parties may serve as a class
representative if: (1) the class is so numerous that joinder of all members is impracticable;
(2) there are questions of law or fact common to the class; (3) the claims or defenses of the
representative parties are typical of the claims or defenses of the class; and (4) the
representative parties will fairly and adequately protect the interests of the class. Fed. R.
Civ. P. 23(a). At the lead plaintiff selection stage of litigation, “the moving plaintiff must
only make a preliminary showing that the adequacy and typicality requirements have been
met.” Omdahl v. Farfetch Ltd., 2020 WL 3072291, at *3 (S.D.N.Y. June 10, 2020).
At this stage in the litigation, a prima facie showing that the requirements of Rule 23
are met is sufficient. See In re Fuwei Films Sec. Litig., 247 F.R.D. 432, 439 (S.D.N.Y. 2008)
(“At this point, a prospective lead plaintiff need only make a preliminary, prima facie
showing that his or her claims satisfy the requirements of Rule 23.” (citing Kaplan v.
Gelfond, 240 F.R.D. 88, 94 (S.D.N.Y. 2007), on reconsideration in part sub nom. In re IMAX
Sec. Litig., 2009 WL 1905033 (S.D.N.Y. June 29, 2009)). Further, “typicality and adequacy of
representation are the only provisions relevant to a determination of lead plaintiff under
the PSLRA.” In re Oxford Health Plans, Inc. Sec. Litig., 182 F.R.D. at 49 (citation omitted); see
also Kuriakose v. Federal Home Loan Mortgage Co., 2008 WL 4974839, at *4 (S.D.N.Y. Nov.
24, 2008) (“In a motion to be appointed as lead plaintiff, a class member need only make a
‘preliminary showing’ that the Rule's typicality and adequacy requirements have been
satisfied.” (citation omitted)).
In evaluating the movants’ adequacy, courts consider whether “(1) [their choice of]
class counsel is qualified, experienced, and generally able to conduct the litigation; (2) there
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is no conflict between [them] and the members of the class; and (3) [they have] a sufficient
interest in the outcome of the case to ensure vigorous adequacy.” Kuriakose, 2008 WL
4974839, at *4. 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. Id.
Viani and Price satisfy the typicality requirement because, like all other proposed
class members, they seek recovery for the losses on their investments in Paysafe and FTAC
securities that they incurred as a result of Defendants’ misrepresentations and omissions,
and further that their claims arise from the same conduct as those of the other class
members. They also satisfy the adequacy requirement of Rule 23 because their interest in
aggressively pursuing claims against Defendants is aligned with the interests of other
putative class members who were similarly harmed as a result of Defendants’ false and
misleading statements. There does not appear to be any conflict, or potential conflict,
between Viani’s and Price’s interests and those of the other members of the putative class
and they have attested that they are fully committed to vigorously pursuing the claims on
behalf of the proposed class. Moreover, both movants submitted a Joint Declaration where
they noted that they fully understand the Lead Plaintiff’s responsibilities and obligations to
the class under the PSLRA, which include acting as a fiduciary for all class members, staying
informed about the litigation, participating in court proceedings, depositions, settlement
mediations, and hearings as needed, and reviewing and authorizing the filing of important
litigation documents, and are willing and able to undertake these responsibilities to ensure
the vigorous prosecution of this litigation. See Amjed Decl., Ex. C, 8-9. Based on the
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memoranda and declaration submitted by movants, the Court is persuaded that Viani and
Price have made a preliminary showing that they will adequately protect the interests of the
class. Additionally, Viani and Price are committed to ensuring that this litigation is
prosecuted in an efficient and effective manner. Both movants have participated in a joint
conference call to discuss the claims against Defendants and their plans to jointly prosecute
this litigation, and have arranged to communicate with each other as needed, both with and
without counsel, and plan to use consensus decision making to maximize the recovery for
the class. See id. at 6.
Accordingly, Viani and Price satisfy all three requirements of 15 U.S.C. § 78u–
4(a)(3)(B)(iii)(I): they made a motion in response to a notice; they have the largest financial
interest; and made a preliminary showing that they otherwise satisfy the requirements of
Rule 23. Accordingly, Viani and Price are entitled to a rebuttable presumption that they
should be appointed lead plaintiff in this action. CCM has not come forward with evidence
to suggest that Viani and Price could not work together in an effective manner or to
otherwise rebut the presumption that they should be appointed lead Plaintiffs.
While it is true that Viani and Price had no relationship prior to this action and that
their individual losses are less than CCM’s loss, their aggregate loss is more. Additionally,
CCM’s standing could potentially be challenged if Defendants question the validity of the
approximately 100 assignments of the claim. It also appears that the assignments may be
revocable, meaning that CCM’s financial interest could diminish during the course of the
litigation. Further, discovery on the validity of the assignments and CCM’s standing would
be contrary to the interest of the class in pursuing efficient discovery toward a resolution of
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this matter. Cf. Plymouth County Ret. Assoc. v. Array, Inc., 2021 WL 5051649 (S.D.N.Y. Nov.
1, 2021) (denying appointment as lead plaintiff due to risk that plaintiff would be subject to
unique defenses surrounding assignment of claims).
On balance, the Court finds that Viani and Price should be appointed lead Plaintiff
for the reasons set forth above.
d. Lead Counsel Selection
The PSLRA vests authority in the lead plaintiff to select and retain counsel for the
class, subject to the Court’s approval. See 15 U.S.C. § 78u–4(a)(3)(B)(v). Courts should not
disturb the lead plaintiff’s choice of counsel unless it is necessary to protect the interests of
the class.
Viani and Price have selected and retained KT to serve as Lead Counsel for the class.
As noted above, KT specializes in prosecuting complex class action litigation and is one of
the leading law firms in its field. See Amjed Decl., Ex. E. The firm is actively engaged in
complex litigation and has successfully prosecuted numerous securities fraud class actions
on behalf of injured investors and has obtained record recoveries in those cases, including:
In re Bank of America Corp. Securities, Derivative, & Employee Retirement Income Security
Act (ERISA) Litig., No. 08-md-2058 (PKC) (S.D.N.Y. ($2.425 billion recovery); In re Wachovia
Preferred Securities & Bond/ Notes Litig., No. 08-CV-6351 (RJS) (S.D.N.Y.) ($627 million
recovery); and In re Lehman Bros. Equity/Debt Securities Litig., No. 08-CV-5523 (LAK)
(S.D.N.Y.) ($615 million recovery). KT is also currently serving as lead or co-lead counsel in
several high-profile securities class actions across the country and in this District, including:
Sjunde AP-Fonden v. Goldman Sachs Group, Inc., No. 18-CV-12084 (VSB) (S.D.N.Y.) and
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Sjunde AP-Fonden v. General Electric Co., No. 17-CV-8457 (JMF) (S.D.N.Y.). KT also has
obtained successful verdicts from trials. See In re Longtop Financial Technologies Ltd.
Securities Litig., No. 11-CV-3658 (SAS) (S.D.N.Y.). Thus, it is well qualified to represent the
class.
Thus, the Court appoints KT as lead counsel.
CONCLUSION
For the reasons set forth above, the Court GRANTS the motion at ECF No. 19 of Viani
and Price to be appointed Lead Plaintiffs and to have their choice of counsel approved as
lead counsel. All other motions at ECF Nos. 16, 21, 23, 30, 36, and 37 are DENIED. The
pending motions in related case O’Brien, 22-cv-567 at ECF Nos. 6 and 9 are also DENIED.
IT IS FURTHER ORDERED that Plaintiffs’ Amended Complaint in the consolidated
action shall be due 45 days from the date of this Opinion and Order. Defendants’ Motions
to Dismiss shall be due 60 days after the filing of the Amended Complaint. Plaintiffs shall
have 60 days to file an opposition to the motion. Defendants shall have 30 days to file a
reply in support of the Motions to Dismiss.
IT IS FURTHER ORDERED that discovery is stayed pending resolution of the Motions
to Dismiss.
SO ORDERED.
Dated: May 10, 2022

KATHARINE H. PARKER
United States Magistrate Judge

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