City of Sterling Heights General Employees' Retirement System v. Citigroup Inc.
- Alison Nathan
- 1:20-cv-09573
- U.S. District Court · Southern District of New York
- 38
In Sterling Heights v. Citigroup, Judge Nathan’s filing concerns PSP’s request to submit a sur-reply, but the provided text does not state its disposition.
The competing lead-plaintiff applicants, including Public Sector Pension Investment Board, KBC Asset Management NV, and Pembroke Pines Firefighters & Police Officers Pension Fund, and the proposed class in the related Citigroup securities actions.
What happened
City of Sterling Heights General Employees’ Retirement System v. Citigroup Inc. is a securities class-action proceeding involving competing requests to become the lead plaintiff. Public Sector Pension Investment Board asked to respond to arguments made by KBC Asset Management NV and Pembroke Pines Firefighters & Police Officers Pension Fund.
PSP argued that KBC and Pembroke raised a new August 2018 disclosure and submitted a new expert report for the first time in their reply. PSP contended that the court should calculate each applicant’s financial interest using only the allegations in the filed complaints.
The document bears an order from Judge Alison Nathan, but the provided text does not say whether the request to file the sur-reply was granted or denied. It therefore does not establish a ruling on lead-plaintiff appointment or the securities claims.
The detailed version
- City of Sterling Heights General Employees' Retirement System v. Citigroup Inc. · No. 1:20-cv-09573
- Alison Nathan
- Jan. 28, 2021
Background
The provided document is a letter and proposed sur-reply filed in three related securities class actions, including City of Sterling Heights General Employees' Retirement System v. Citigroup Inc. The Public Sector Pension Investment Board (PSP), a lead-plaintiff movant, requested permission to file a sur-reply to the reply memorandum submitted by KBC Asset Management NV and Pembroke Pines Firefighters & Police Officers Pension Fund.
The underlying lead-plaintiff motions concern which investor has the largest financial interest and should be appointed to represent the proposed class. The filing states that the complaints assert claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5, although the provided document does not decide those claims.
PSP’s Arguments
PSP argued that KBC and Pembroke introduced, for the first time in their reply, an August 2018 regulatory disclosure that they claimed could increase their recoverable losses. PSP also objected to a 22-page expert report submitted with that reply. PSP contended that the court should assess financial interest using the allegations in the complaints as they existed when the lead-plaintiff motions were filed, rather than using new allegations raised after the statutory deadline.
PSP further argued that the August 2018 disclosure was inconsistent with the complaint filed in a related proceeding because that complaint identified larger regulatory fines but alleged that the truth about Citigroup’s internal-control problems did not emerge until August 2020. PSP also disputed the expert report’s calculation of PSP’s losses under the loss-calculation framework discussed in the filing and argued that the report was untimely and inadequately explained.
Court Action and Disposition
The document includes the notation “SO ORDERED” and a signature block for Judge Alison J. Nathan dated January 27, 2021. However, the provided text does not state whether Judge Nathan granted or denied PSP’s request to submit the sur-reply. It also does not state which investor would be appointed lead plaintiff, whether the related actions would be consolidated, or how the expert report and August 2018 disclosure would be treated.
Accordingly, the provided text shows a request concerning briefing in the lead-plaintiff selection process, but it does not provide a clear disposition of that request or a merits ruling on the securities claims.
Read the full 38-page opinion on CourtListener, the free public archive maintained by the Free Law Project.