Political “Shoving Match” in North Carolina Rebuts Lead Plaintiff Presumption in Freddie Mac Case

On Monday, US Judge John F. Kennan of the SDNY appointed Central States, Southeast and Southwest
Areas Pension Fund as lead plaintiff and Coughlin Stoia as lead counsel in the securities class action against Freddie Mac pending in that court.  Central States beat out the City of Austin Police Retirement System and Richard H. Moore, Treasurer and Sole Trustee of the North Carolina Retirement Systems (NCRS) for the lead plaintiff spot.

Notably, the court found that NCRS had the largest financial interest, had made a prima facie showing that it met Rule 23’s requirements, and was the presumptively most adequate plaintiff under the PSLRA.  The court found, however, that the presumption was rebutted in this case because of a North Carolina political “shoving match” that left uncertainty surrounding the Treasurer’s legal authority to act on NCRS’s behalf.  It therefore awarded the lead plaintiff role to Central States.

Read the court’s opinion in Kuriakose v. Federal Home Loan Mortgage Co.