United States District Court, M.D. Florida, Orlando Division
REPORT AND RECOMMENDATION
R. HOFFMAN UNITED STATES MAGISTRATE JUDGE.
THE UNITED STATES DISTRICT COURT:
cause came on for consideration without oral argument on the
following motion file d herein:
MOTION:PLAINTIFF MAZ PARTNERS LP'S MOTION FOR APPOINTMENT
AS LEAD PLAINTIFF AND APPROVAL OF SELECTION OF COUNSEL, AND
ACCOMPANYING MEMORANDUM OF LAW (Doc. No. 29)
FILED: May 28, 2019
THEREON it is RECOMMENDED that the motion be GRANTED in part
and DENIED in part.
March 29, 2019, Plaintiff MAZ Partners LP filed a purported
class action complaint against Defendants First Choice
Healthcare Solutions, Inc. and Christian Romandetti, Sr.,
alleging violations of the federal securities laws. Doc. No.
1. The proposed “class” consists of:
all persons other than Defendants who purchased or otherwise
acquired First Choice common stock from April 1, 2014 through
November 14, 2018, both dates inclusive (the “Class
Period”), seeking to recover damages caused by
Defendants' violations of the federal securities laws and
to pursue remedies under Sections 10(b) and 20(a) of the
Exchange Act and SEC Rule 10b-5 promulgated thereunder,
Id. ¶ 1. Plaintiff alleges that Defendant
Romandetti, the former CEO and Chairman of the Board of
Trustees of First Choice Healthcare, engaged in a
“classic pump and dump scheme” that artificially
inflated the price of First Choice's stock. Id.
¶¶ 3, 19, 78, 94. Plaintiff also alleges that
Defendants issued misleading statements due to material
omissions regarding the trading of First Choice's stock.
Id. ¶ 94. In November 2018, the Department of
Justice filed a criminal indictment against Romandetti and
co-conspirators based on the stock manipulation scheme.
Id. ¶ 56. The Securities and Exchange
Commission also filed an SEC complaint against Romandetti and
his co-conspirators. Id. ¶ 61. Thereafter,
First Choice Healthcare common stock declined dramatically.
Id. ¶ 68.
Defendants have moved to dismiss the complaint. Doc. Nos. 13,
28. The motions will not become ripe until June 28, 2019.
Doc. No. 33. Accordingly, discovery in this matter is stayed
pending the Court's ruling on the motions to dismiss.
See 15 U.S.C. § 78u-4(b)(3)(B).
instant motion, Plaintiff seeks to be appointed the lead
plaintiff in this case pursuant to the Private Securities
Litigation Reform Act (“PSLRA”). Doc. No. 29.
Plaintiff also asks that the Court approve the law firm of
Wolf Popper, LLP, as lead counsel and the law firm of Rice
Pugatch Robinson Storfer & Cohen PLLC as liaison counsel
on behalf of the class. Id. at 3. Defendants have
not filed responses to the motion, and the time for doing so
has passed. The matter was referred to the undersigned, and
it is ripe for review.
PSLRA sets forth the procedures required in class actions
alleging violations of the federal securities laws.
See 15 U.S.C. § 78u-4. As relevant here, no
later than twenty days after the complaint is filed, the
plaintiff must publish notice of the pendency of the action
to the purported plaintiff class. Id. §
78u-4(a)(3)(A). No. later than sixty days after publication,
any member of the purported class may move to serve as lead
plaintiff of the purported class. Id. § 78u-
4(a)(3)(A)(i)(II). No. later than ninety days after the
published notice of the action, “the court shall
consider any motion made by a purported class member in
response to the notice . . . and shall appoint as lead
plaintiff the member or members of the purported plaintiff
class that the court determines to be most capable of
adequately representing the interests of class members [i.e.,
the ‘most adequate plaintiff'] . . . .”
Id. § 78u-4(a)(3)(B)(i). The Court must presume
that the most adequate plaintiff is a person that: (1) either
filed the complaint or filed a motion in response to the
notice; (2) has the largest financial interest in the relief
sought by the class; and (3) otherwise satisfies the
requirements of Federal Rule of Civil ...