Gilbert v. Azure Power Global Limited

Background

This putative securities class action was filed on behalf of people who acquired Azure securities during the stated class period. Under the Private Securities Litigation Reform Act, class members could move to become the lead plaintiff—the person responsible for representing the proposed class—and could seek approval of their choice of lead counsel.

Carson D. Gilbert’s counsel published notice of the action in Business Wire on August 30, 2022. The court found that the notice satisfied the statutory requirements and that motions filed by Serap Lokman, Eric Webb, and Brendin James on October 31, 2022 were timely. The court had previously denied Yannick Sabourin’s motion after he stated that he did not oppose the competing motions.

Lead Plaintiff Analysis

The PSLRA creates a presumption in favor of the timely applicant with the largest financial interest who also makes a preliminary showing of typicality and adequacy under Federal Rule of Civil Procedure 23. The court considers typicality satisfied when the proposed lead plaintiff’s claims arise from the same events and involve similar legal arguments as the class’s claims. Adequacy concerns whether the plaintiff and proposed counsel can fairly and effectively represent the class.

The court found that Lokman had the largest demonstrated financial interest. It stated that she alleged losses of $18,638.13, purchased 4,741 shares in total, purchased 1,798 net shares, and expended $27,166.47 net during the class period. The court compared those figures with Webb’s alleged losses of approximately $11,232.53 and James’s alleged losses of approximately $2,393.61.

The court also found that Lokman had made the required preliminary showing of typicality because her claims arose from the same alleged statements and omissions concerning Azure’s business, operations, and prospects, and because she intended to make legal arguments under the federal securities laws. The court found adequacy because nothing in the record showed that her interests conflicted with those of other class members, her proposed counsel was qualified and experienced, and her alleged losses gave her a sufficient financial interest to pursue the case.

Webb and James argued that Lokman should be disqualified because she resides in Turkey and because her trading activity made her a day trader subject to a unique defense. The court rejected those arguments. It held that foreign residence alone did not disqualify a lead plaintiff and that the opponents had offered speculation rather than the proof needed to rebut Lokman’s presumed adequacy. The court also found that Lokman’s transactions did not establish that she failed to rely on the integrity of Azure’s stock price. The court noted that she made four transactions on one day but that her other transactions did not occur on the same day. It did not decide whether her stated strategy of buying additional shares as the price declined would make her atypical because the issue had not been adequately briefed.

Lead Counsel and Disposition

The PSLRA permits the most adequate plaintiff to select counsel, subject to court approval. The court found Levi & Korsinsky, LLP experienced in securities class-action litigation and saw no reason to reject Lokman’s selection.

The court granted Serap Lokman’s motion and denied the motions filed by Eric Webb and Brendin James. It appointed Serap Lokman as Lead Plaintiff and Levi & Korsinsky, LLP as Lead Counsel. The Clerk of Court was directed to terminate the motions pending at Docket Numbers 11, 14, and 18. The opinion did not decide the underlying securities-fraud claims.