In re Transocean Ltd. Securities Litigation

Background

Matay Gabor and David Matteson filed separate securities class actions against Transocean Ltd., Jeremy D. Thigpen, Mark L. Mey, and Thad Vayda. The complaints asserted claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. Plaintiffs alleged that, during 2023 and 2024, the defendants made statements representing that Transocean was in a strong economic position and that its financial statements accurately valued its assets. They alleged that Transocean’s September 3, 2024 announcement that it had agreed to sell two rigs for $342 million, resulting in an impairment of nearly twice that amount, revealed that the assets had not been accurately valued. The complaint alleged that Transocean’s share price then fell $0.42, or 8.86%.

The court considered motions to consolidate the two actions and to appoint a lead plaintiff and lead counsel. John Mahoney filed one motion. Patrick Kocher and John Fogel, applying together as the Transocean Investor Group, filed another. One putative class member withdrew a motion, and another filed a notice of non-opposition.

Consolidation

Under Federal Rule of Civil Procedure 42(a), actions involving a common question of law or fact may be consolidated. The court found that the two complaints involved essentially the same facts and alleged misstatements. No party opposed consolidation, and the court concluded that resolving the actions separately would be inefficient. It therefore consolidated the actions under the caption In re Transocean Ltd. Securities Litigation, No. 24 Civ. 9964.

Lead Plaintiff

The Private Securities Litigation Reform Act governs the appointment of a lead plaintiff in a securities class action. The court generally presumes that the most adequate plaintiff is the timely applicant with the largest financial interest who also satisfies the relevant class-representation requirements under Federal Rule of Civil Procedure 23.

Both Mahoney and the Transocean Investor Group filed timely motions. To compare their financial interests, the court considered the loss calculations and other factors used by courts in the Southern District of New York. Mahoney originally reported a loss of $335,096.67 using the last-in, first-out method. The Investor Group originally reported a combined loss of $250,586.03 using that method. In its opposition papers, the Investor Group presented different loss calculations under modified methods and claimed larger losses.

The court declined to use the Investor Group’s later calculations. It expressed concern that one of the proposed methods was inconsistent with the preference of most courts in the district for the last-in, first-out method and that allowing the Investor Group to change its loss figure in its opposition papers would encourage gamesmanship. The court therefore held the Investor Group to its original loss calculation and found that Mahoney had the largest financial interest.

The court also found that Mahoney made the required initial showing under Rule 23. His claims were typical because he alleged that he bought Transocean stock during the class period, that the defendants’ alleged misstatements inflated the stock price, and that he suffered losses when the truth emerged. The court found no potential conflict between Mahoney and the class, and it found that his selected law firm was qualified and experienced. No party offered evidence rebutting the presumption that Mahoney could adequately represent the class.

Lead Counsel and Disposition

The court approved Mahoney’s selection of Levi & Korsinsky, LLP as lead counsel because the firm had extensive experience litigating securities and shareholder class actions as lead counsel.

Mahoney’s motion was GRANTED. The two actions were CONSOLIDATED under the caption In re Transocean Ltd. Securities Litigation, No. 24 Civ. 9964. John Mahoney was APPOINTED lead plaintiff, and Levi & Korsinsky was APPOINTED lead counsel. The motions at ECF Nos. 9, 13, 16, and 19 were DENIED in all other respects. The parties were directed to submit a joint letter and proposed case management plan by May 7, 2025. The order addressed consolidation and leadership of the litigation; it did not decide the merits of the securities claims.