In re FASTLY, INC. SECURITIES LITIGATION
- Phyllis Hamilton
- 4:20-cv-06024
- U.S. District Court · Northern District of California
- 12
Fastly Securities Litigation: Judge Hamilton appointed Andrew R. Zenoff lead plaintiff, approved his counsel, and denied Pineda and Feit’s competing motion.
The order directly affected Andrew R. Zenoff, Ramiro Pineda, William Feit, the proposed securities class, Fastly, Inc., Joshua Bixby, Adriel Lares, and the lawyers seeking appointment as lead counsel.
What happened
In re FASTLY, INC. SECURITIES LITIGATION involved two related securities class actions alleging that Fastly, Inc. and two individuals failed to disclose Fastly’s business relationship with ByteDance, the operating entity of TikTok, during the proposed class period.
Andrew Zenoff and Ramiro Pineda and William Feit competed to become lead plaintiffs and select lead counsel. The court found that Zenoff had the largest financial interest and met the requirements that his claims be typical and that he adequately represent the class.
Judge Hamilton granted Zenoff’s request for appointment and counsel approval, terminated the consolidation requests as moot because the cases had already been consolidated, and denied Pineda and Feit’s competing motion and the withdrawn or abandoned motions.
The detailed version
- In re FASTLY, INC. SECURITIES LITIGATION · No. 4:20-cv-06024
- Phyllis Hamilton
- Feb. 10, 2021
Background
The court addressed competing motions concerning two related securities class actions against Fastly, Inc., Joshua Bixby, and Adriel Lares. The complaints alleged violations of the Private Securities Litigation Reform Act and federal securities laws based on alleged failures to disclose Fastly’s business relationship with ByteDance, which operated TikTok during the relevant period. The proposed class period was May 6, 2020, through August 5, 2020.
The court had already consolidated the two actions after the competing motions were filed. As a result, the parties’ requests to consolidate were moot, leaving the competing requests to appoint a lead plaintiff and approve lead counsel.
Lead Plaintiff
The Private Securities Litigation Reform Act requires the court to appoint the class member most capable of adequately representing the class. The court generally presumes that the most adequate plaintiff is the one with the largest financial interest who also satisfies the requirements of Rule 23, including typicality and adequacy.
The court compared Andrew R. Zenoff’s claimed losses with the losses claimed collectively by Ramiro Pineda and William Feit. Rather than use either side’s proposed calculation method, the court used a method that considered both Zenoff’s losses from selling shares during the class period and Pineda and Feit’s claimed losses from shares they retained and sold afterward.
The court found that Zenoff showed an approximately $105,848 loss from Fastly shares acquired during the class period. Pineda and Feit claimed a combined loss of $70,848 based on 2,600 retained shares. The court therefore found that Zenoff had the larger financial interest. It rejected Pineda and Feit’s argument that Zenoff’s calculations improperly omitted shares held before the class period, finding that Zenoff acquired and sold the same total number of shares and that their evidence also supported the conclusion that he sold shares acquired during the class period.
The court also found that Zenoff satisfied Rule 23’s typicality and adequacy requirements. His alleged injury arose from the same conduct alleged to have injured other class members, and the court found no evidence of conflicts with the class or defenses unique to him. No party attempted to rebut his presumptive status.
Lead Counsel and Disposition
The court found Zenoff’s selection of Robbins Geller Rudman & Dowd LLP as lead counsel reasonable. No party objected to the selection, and the court found the firm experienced in securities class actions.
The court GRANTED Zenoff’s motion for appointment as lead plaintiff and approval of his selected lead counsel. It appointed Andrew R. Zenoff as lead plaintiff and Robbins Geller Rudman & Dowd LLP as lead counsel in the consolidated action. The court TERMINATED the requests to consolidate the already-consolidated actions as moot. It DENIED Pineda’s and Feit’s competing motion and the withdrawn or abandoned motions identified as Docket Nos. 29, 30, and 36. The order did not decide whether the alleged securities violations occurred.
Read the full 12-page opinion on CourtListener, the free public archive maintained by the Free Law Project.