United States District Court, E.D. Kentucky, Northern Division, Covington
SATISH DOSHI, Individually And on behalf of all other Persons similarly situated PLAINTIFFS
GENERAL CABLE, DEFENDANTS
MEMORANDUM OPINION AND ORDER
William O. Bertelsman, United States District Judge
a securities class action brought on behalf of all persons
who purchased General Cable securities between February 23,
2012 and February 10, 2016.
matter is currently before the Court on competing motions for
appointment as lead plaintiff. One is by The Employees
Retirement System of the Puerto Rico Electric Power Authority
(“PREPA”) (Doc. 19), and the other is by William
Edward Long, as Trustee of the UA 09-21-2001 William Edward
Long & Bonnie Diane Long Living Trust (“the Long
Trust”) (Doc. 22).
Court has reviewed this matter and concludes that oral
argument is not necessary.
and Procedural Background
Cable is manufacturer and distributor of fiber optic wire and
cable products for use in the energy, industrial,
construction, specialty and communications markets. (Compl.
allege that, beginning on February 23, 2012, the Company made
false or misleading statements in its public filings, or
failed to disclose information, regarding the fact that the
Company was violating the Foreign Corrupt Practices Act of
1992 (“FCPA”) by paying millions of dollars in
bribes to foreign officials in countries where it did
business. (Compl. § 47). When the Company disclosed
information about its potential liability under the FCPA, its
stock price dropped, causing harm to shareholders. (Compl.
¶¶ 48, 49, 63, 64).
the Complaint alleges two such “corrective”
• “On September 22, 2014, General Cable disclosed
that the Company was reviewing ‘payment practices,
' ‘the use of agents, ' and ‘the manner
in which the payments were reflected on our cooks and
records' in connection with General Cable's
operations in Portugal, Angola, Thailand, and India. General
Cable advised investors that these issues ‘may have
implications under' the [FCPA].” (Compl. ¶ 5).
On this news, the company's stock price dropped 4.68%.
(Compl. ¶ 6).
• On February 10, 2016, post-market, General Cable
reported that the Company had increased a previously
disclosed disgorgement of profits related to bribe-tainted
sales in Angola from $24 to $33 million, after identifying
“certain other transactions that may raise
concern.” (Compl. ¶ 8). On this news, the
company's stock price dropped 31.61%. (Compl. ¶ 9).
filed this class action on January 5, 2017, in the United
States District Court for the Southern District of New York.
(Doc. 1). It was transferred to this Court on February 27,
2017. (Doc. 9). The Complaint alleges a claim against General
Cable for violation of Section 10(b) of the Exchange Act, 15
U.S.C. § 78j(b) and Rule 10(b)(5) promulgated
thereunder, as well as a claim against defendants Kenny and
Robinson for violation of Section 20(a) of the Exchange Act
(“control person” liability). (Doc. 1).
Private Securities Litigation Reform Act
(“PSLRA”), 15 U.S.C. § 78u-4, governs the
selection of a lead plaintiff in private securities class
PSLRA provides a rebuttable presumption with regard to the
most adequate plaintiff.” Farrah v. Provectus
Biopharmaceuticals, Inc., 68 F.Supp.3d 800, 804 (E.D.
Tenn. 2014). This presumption is triggered where a potential
lead plaintiff has: (1) either filed the complaint or made a
motion in response to a notice; (2) in the determination of
the Court, has the largest financial interest in the relief
sought by the class; and (3) otherwise satisfies the
requirements of Rule 23 of the Federal Rules of Civil
Procedure. 15 U.S.C. § 78u-4(a)(3)(B)(iii)(I).
this presumption can be overcome by a showing that the
presumptive lead plaintiff will be subject to unique defenses
or is otherwise inadequate. 15 U.S.C. §
Largest Financial Interest
PSLRA does not define the term “largest financial
interest, ” and it does not appear that the Sixth
Circuit has ...