Tiessen v. The Toronto-Dominion Bank

Background

James Tiessen filed a proposed securities class action on October 22, 2024, on behalf of people who purchased The Toronto-Dominion Bank securities between February 29, 2024, and October 9, 2024. The complaint alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Securities and Exchange Commission Rule 10b-5.

The Private Securities Litigation Reform Act requires a plaintiff in this type of case to publish notice of the action, the claims, and the proposed class period. Class members then have 60 days after publication to seek appointment as lead plaintiff. The court must appoint the class member most capable of adequately representing the class, generally presuming that the person with the largest financial interest who satisfies the requirements of Federal Rule of Civil Procedure 23 is the most adequate plaintiff.

Lead-Plaintiff Motions

The required notice was published on October 22, 2024. James Tiessen and Pedro Gonzalez moved by the December 23, 2024 deadline to be appointed lead plaintiff. The court held a hearing on January 15, 2025, and separately consolidated this action with another action asserting substantially the same claims.

The court found that Gonzalez had the larger financial interest. The opinion states that Tiessen reported a loss of $1,512.56, while Gonzalez reported a loss of $314,000. The court also found that Gonzalez’s claims were typical because he bought the bank’s securities and suffered substantial losses after the alleged stock-price inflation was revealed. The court further found that Gonzalez could fairly and adequately represent the class because he was a sophisticated investor and would be represented by experienced counsel.

Tiessen argued that Gonzalez’s larger financial interest resulted from an artificially expanded class period. The court rejected that argument for purposes of selecting the lead plaintiff, explaining that courts generally use the longer proposed class period when comparing potential lead plaintiffs unless that period is implausible or obviously frivolous. The court also declined to rely on possible future standing issues that might arise if the class period were later shortened.

Rulings

The court concluded that Gonzalez was presumptively the most adequate plaintiff and that the presumption had not been rebutted. Tiessen’s motion to be appointed lead plaintiff at Docket 17 was DENIED. Gonzalez’s motion to be appointed lead plaintiff and to appoint Bleichmar Fonti & Auld LLP as lead counsel at Docket 20 was GRANTED.

The court found that Bleichmar Fonti & Auld LLP had the knowledge, experience, and resources to serve as lead counsel. It required Gonzalez to designate a single lawyer as lead trial counsel. The court also noted that attorneys’ fees and any class-representative award would be subject to court review. Gonzalez’s counsel stated that it would not seek fees exceeding 23% of any recovery and agreed that the court could consider Tiessen’s competing fee proposal.

The Clerk of Court was directed to terminate the motions at Dockets 17, 20, and 29. The order selected the proposed class’s lead plaintiff and counsel; it did not decide the underlying securities-fraud allegations.