In re UiPath, Inc. Securities Litigation

Background

Two proposed securities class actions were pending against UiPath, Inc., Daniel Dines, Robert Enslin, and Ashim Gupta. The first, brought by Zack Steiner, was filed on June 20, 2024. The second, brought by Simone Brunozzi, was filed on August 6, 2024. Both complaints alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Securities and Exchange Commission Rule 10b-5. They alleged that the defendants misrepresented the success of UiPath’s turnaround strategy during the class period, from December 1, 2023, through the close of trading on May 29, 2024.

Brunozzi moved under the Private Securities Litigation Reform Act to be appointed lead plaintiff, to have Bleichmar Fonti & Auld LLP approved as lead counsel, and to consolidate the two actions. The court noted that Brunozzi was the only class member seeking appointment as lead plaintiff after another movant withdrew.

Consolidation

The court found that the two actions involved common questions of law and fact. It therefore granted the motion to consolidate them under Master File No. 1:24-cv-04702 (JPC) (SDA), for all purposes including discovery and trial. The order directed that filings be made only in the master file, that the caption be renamed “In re UiPath Securities Litigation,” and that Case No. 24-CV-05959 be administratively closed.

Lead Plaintiff

The court explained that the Private Securities Litigation Reform Act requires appointment of the plaintiff who filed a complaint or timely moved for appointment, has the largest financial interest in the relief sought, and otherwise satisfies the relevant requirements of Federal Rule of Civil Procedure 23. At this stage, the court considered whether the proposed lead plaintiff’s claims were typical of the class and whether the plaintiff could adequately represent it.

The court found Brunozzi’s motion timely because it was filed by the deadline stated in the published notices. Brunozzi represented that he had suffered a recoverable loss of more than $5 million from investments in UiPath securities during the class period. Because no prospective lead plaintiff with a larger financial stake had come forward, the court treated Brunozzi as satisfying the financial-interest requirement.

The court also found that Brunozzi’s claims were typical because they arose from the same alleged conduct and injuries as the other class members’ claims. It found him adequate because he certified that he understood his duties, there was no indication of conflicting interests with the class, and he had selected experienced counsel. The court therefore appointed Brunozzi as lead plaintiff.

Lead Counsel

The court approved Brunozzi’s selection of Bleichmar Fonti & Auld LLP as lead counsel. After reviewing the firm’s background and experience, including its experience litigating securities class actions, the court found the firm well qualified.

Disposition

The court granted Brunozzi’s motion in its entirety. It consolidated the two actions, appointed Brunozzi as lead plaintiff, approved Bleichmar Fonti & Auld LLP as lead counsel, and directed the parties to meet and confer and submit a proposed schedule for a consolidated complaint and the defendants’ answer or other response. The opinion addressed case management and leadership issues; it did not decide whether the alleged securities fraud occurred or whether the defendants were liable.

Judge

The opinion is signed by Stewart D. Aaron, United States Magistrate Judge.