Can Too Many Cooks Spoil The Settlement?
Many courts have declined to appoint a group of unrelated investors as the lead plaintiff in a securities class action, concluding that a group of this nature will be unable to effectively direct the litigation as envisioned by the PSLRA. See, e.g., In re Milestone Scientific Sec. Litig., 183 F.R.D. 404 (D.N.J. 1998) (“Where multiple lead plaintiffs have divergent interests, the leadership of the class may be divided, and rendered factious.”). If it did not agree with this reasoning before, the U.S. Court of Appeals for the Eighth Circuit probably does now. In In re BankAmerica Corp. Sec. Litig., 2003 WL 22844301 (8th Cir. Dec. 2, 2003), the court addressed what weight a district court must give to “a fraction of a fractured lead plaintiff group” that objected to the settlement terms agreed to by lead counsel. The plaintiffs alleged losses caused by misrepresentations and omissions surrounding the 1998 merger of NationsBank and BankAmerica to form Bank of America. After the consolidati
