DeKalb County Pension Fund v. Roblox Corporation

Background

DeKalb County Pension Fund filed a proposed class action alleging that Roblox Corporation and certain executives violated securities laws by inflating the company’s stock value through misrepresentations and omissions. The case was originally filed in the Southern District of New York and was later transferred to the Northern District of California.

DeKalb and Arkansas Teacher Retirement System, a proposed class member, jointly moved for appointment as lead plaintiffs under the Private Securities Litigation Reform Act. They also asked the court to approve Labaton Keller Sucharow LLP as lead counsel for the class and Hagens Berman Sobol Shapiro LLP as liaison counsel for the class.

Two competing motions for appointment as lead plaintiffs were filed. Those motions were effectively withdrawn after the competing parties recognized that DeKalb and Arkansas Teacher Retirement System had the largest financial interest. Ye Ming filed another motion that was not formally withdrawn but conceded that it failed in light of DeKalb and Arkansas Teacher Retirement System’s showing.

Court’s Analysis

The court found that DeKalb and Arkansas Teacher Retirement System adequately showed that they claimed the largest financial interest and satisfied the requirements to serve as adequate plaintiffs under the Act. The court stated that nothing undermined the presumption favoring the plaintiff with the largest financial stake.

The court also found that the proposed lead plaintiffs’ selection of lead and liaison counsel was reasonable and approved that selection. The court determined that the motion could be decided without oral argument and vacated the hearing scheduled for March 7, 2024.

Ruling

The court granted DeKalb and Arkansas Teacher Retirement System’s motion for appointment as lead plaintiffs and approval of their selected counsel. It denied Ye Ming’s motion. The order did not resolve the underlying allegations about Roblox’s securities-law compliance.