(The news featured below is a selection from the news covered in Federal Securities Law Reporter, which is distributed to subscribers of Federal Securities Law Reporter.)

Shareholder Group Did Not Have Largest Financial Loss

A group of shareholders seeking appointment as lead plaintiff was denied the appointment because they did not have the largest financial stake in the outcome of the litigation. The shareholders, who purchased the shares at an allegedly inflated price, sold the shares prior to the release of corrective disclosures. Under the Private Securities Litigation Reform Act, recoverable losses are only those involving sales of the security after dissemination of information correcting the misstatement or omission that is the basis for the action. As such, the court (DC Minn) held that because the shareholders both purchased and sold the shares at an inflated price, they failed to prove loss causation and did not suffer the greatest financial loss.

Kops v. NVE Corp. (DC Minn) is reported at ¶93,927.