White Collar and Government Investigations partner Michael Grudberg is quoted in Law 360’s article, “Investors Denied Cert. In Suit Against Twitter Stock Fraudster,” which discusses a suit against Gregory W. Gray, a convicted promoter of limited partnership offerings of pre-IPO Twitter securities, who was sued by the SEC and served a prison sentence after pleading guilty to securities fraud and lying to the regulator. The article summarizes the court’s rejection of an effort by plaintiffs to certify a class action against Michael’s client.
Michael, who represents Gregory P. Edwards, an investor and partner in Gray’s company, Archipel Capital, explained that asserting common issues of reliance can prove difficult in proposed securities fraud class actions involving stock that is not publicly traded.
He goes on to state, “These were limited partnership investments which did not trade on a public market, so the fraud-on-the-market presumption that informs most securities class actions is irrelevant; each putative plaintiff relied on his or her own combination of factors, and classwide resolution of the reliance question would be unworkable. Mr. Edwards is gratified by the court's careful consideration of the fact allegations, which would have made class treatment inapt and unfair here.”
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