Tezos securities litigation continues with a new lead plaintiff

Quick Take

  • Court initially appointed Arman Anvari as lead plaintiff in the consolidated class action, 
  • The Court refused to substitute Anvari’s chosen plaintiff replacement and instead granted Trigon’s motion because “Trigon is the sequential plaintiff who contributed the second-most to Tezos and has claims representative of the putative class”
  • The Court said that it did not think it was necessary to restart a statutory 60 day notice period for lead plaintiff selection

Disclaimer: These summaries are provided for educational purposes only by Nelson Rosario and Stephen Palley. They are not legal advice. These are our opinions only, aren’t authorized by any past, present or future client or employer. Also we might change our minds. We contain multitudes.

As always, Rosario summaries are “NMR” and Palley summaries are “SDP".

[related id=1]IN RE TEZOS SECURITIES LITIGATION, Case №17-cv-06779-RS (N.D. Cal, 4/8/19, Document #213) (“Order on Plaintiffs’ Motion to Substitute Lead Plaintiff”) [SDP]

Loyal CCM readers will recall that when we last checked in on the Tezos class action litigation at issue was who was going to be the lead plaintiff and whether or not the defendants would be able to delay the case by requiring a statutory clock to be restarted. The Court on March 8 issued a ruling that addressed both of these issues, allowing the case to trudge forward under slightly different management and without restarting the clock. Also, if this judge reads conspiracy theory blog posts on medium about this case you wouldn’t know, because the opinion unsurprisingly doesn’t mention them.

The court initially appointed Arman Anvari as the lead plaintiff in this consolidated class action. Motions to Dismiss were filed. Tim Draper and Bitcoin Suisse were dismissed but the Breitmans, their company Distributed Ledger Solutions, and the Tezos Foundation remained as Defendant. Anvari then moved to withdraw as the lead plaintiff and substitute Artiom Franze. Another plaintiff, Trigon, also asked to be appointed and asked for its lawyers to be substituted as class counsel. (I’m not saying that money matters to anyone involved here but, yeah, class counsel will end up making more money).

The Defendants didn’t take a position about who should be lead plaintiffs, although they filed briefs saying that Anvari was a really bad guy, and at least one blog post appeared on Medium to this effect. The Court didn’t expressly weigh in on anyone’s character, but said that Anvari didn’t have to be a plaintiff if he didn’t want to be (there’s caselaw to this effect, not surprisingly). They also asked that the court restart a statutory notice period for lead process selection, which would of course have the effect of slowing the case down, not that this was anyone’s intent.