3-7. Private Securities Actions
(a) Civil Cover Sheet Notation Requirement.
If a complaint or other pleading contains a cause of action governed by the Private Securities
Litigation Reform Act of 1995, Pub. L. No. 104-67, 109 Stat. 737 (1995), the following shall be so
noted in Block VI of the civil cover sheet: "Private Securities Litigation Reform Act."
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(b) Certification by Party Filing Complaint and Seeking to Serve as Lead Plaintiff.
Any person or group of persons filing a complaint and seeking to serve as lead plaintiff in a civil
action containing a cause of action governed by the Private Securities Litigation Reform Act of 1995,
Pub. L. No. 104-67, 109 Stat. 737 (1995), must serve and file with the initial pleading a certificate
under penalty of perjury which contains the following averments:
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(1) the party has reviewed the complaint and authorized its filing;
(2) the party did not engage in transactions in the securities which are the subject of the
action at the direction of plaintiff's counsel or in order to participate in this or any other
litigation under the securities laws of the United States;
(3) the party is willing to serve as a representative party on behalf of a class, including
providing testimony at deposition and trial, if necessary;
(4) the party has made no transactions during the class period in the debt or equity
securities that are the subject of the action except those set forth in the certificate;
(5) the party has not, within the three years preceding the date of the certification, sought
to serve or served as a representative party on behalf of a class in an action involving alleged
violations of the federal securities laws, except as set forth in the certificate; and
(6) the party will not accept any payment for serving as representative on behalf of a class
beyond the party's pro rata share of any recovery, unless ordered or approved by the court pursuant to
section 27(a)(4) of the Securities Act, 15 U.S.C.
§ 77z-1(a)(4), or section 21D(a)(4) of the Securities Exchange Act, 15 U.S.C. § 78u-4(a)(4).
As used herein, "equity security" shall have the same meaning as that term has for purposes of section
16(a) of the Securities Exchange Act of 1934,
15 U.S.C. § 78p(a).
(c) Certification by Party Not Filing Complaint Seeking to Serve as Lead Plaintiff.
Any party seeking to serve as lead plaintiff, but who does not also file a complaint, need not file the
certification required in subpart (b) of this rule, but shall at the time of initial appearance state
that the party has reviewed a complaint filed in the action and either (i) adopts its allegations or, if
not, (ii) specifies the allegations the party intends to assert.
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(d) Certification by Lawyers Seeking to Serve as Class Counsel.
Each lawyer seeking to serve
as class counsel in all civil actions containing a cause of action governed by the Private Securities
Litigation Reform Act of 1995, Pub. L. No. 104-67, 109 Stat. 737 (1995), must serve and file a
certificate under penalty of perjury which contains the following averments:
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(1) the lawyer does not directly own or otherwise have a beneficial interest in securities
that are the subject of the action; or
(2) the extent of such ownership or interest and whether such ownership or interest does or
does not constitute a conflict of interest sufficient to disqualify the attorney from representing the
Cross Reference: New Commentary to Civil L.R. 23-1:
A Model Stipulation and Proposed Consolidation Order for Securities Fraud
Class Actions are available from the clerk of court in civil actions containing a cause of action
governed by the Private Securities Litigation Reform
Act of 1995, Pub. L. No. 104-67, 109 Stat. 737 (1995), and are part of the materials provided to the
filing party for service on all parties in the action pursuant to Civil L.R. 4-3.
ADD: New (d) and (e) to Civil L.R. 23-1:
(d) Not later than 20 days after filing the complaint in any action governed by the Private
Securities Litigation Reform Act of 1995, Pub. L. No. 104-67, 109 Stat. 737 (1995), the party filing
that complaint and seeking to serve as lead plaintiff shall serve and file a copy of any notice required
by the Act.
(e) Not later than 60 days after publication of the notices referred to in subpart (d), any
party seeking to serve as lead plaintiff shall serve and file a motion to do so. The motion shall set
forth whether the party claims entitlement to the presumption set forth in section 27(a)(3)(B)(iii)(I)
of the Securities Act or section 21D(a)(3)(B)(iii)(I) of the Securities Exchange Act or that the
presumption is rebutted and the reasons therefor.
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23-2. Electronic Posting of Certain Documents Filed in Securities
Fraud Class Actions
(a) Electronic Posting.
All postable documents, as defined in
subsection (b) of this rule, required to be filed pursuant to Civil L.R.
5-1 in any private civil action containing a claim governed by the Private
Securities Litigation Re
form Act of 1995, Pub. L. No. 104-67, 109 Stat. 737 (1995), shall be timely posted at a Designated
Internet Site. The party or other person filing such document shall be responsible for timely posting.
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(b) Postable Documents.
For purposes of this Rule, "postable documents" shall mean:
(1) Any pleading specified in FRCivP 7(a);
(2) Any briefs, declarations or affidavits filed pursuant to
FRCivP 12, 41 or 56;
(3) Any briefs, declarations or affidavits relating to
certification of a class pursuant to FRCivP 23;
(4) Any briefs, declarations or affidavits relating to
designation of a lead plaintiff pursuant to 15 U.S.C. §§ 77z-1(a)(3) or 78u-4(a)(3);
(5) Any report, statement, declaration or affidavit of an
expert witness designated to testify whether filed pursuant to FRCivP 26(a)(2)(B), or otherwise;
(6) Any pretrial conference statement pursuant to Civil L.R.
16-16(B), pretrial briefs or motions in limine;
(7) Any filing concerning approval of a settlement of the
(8) Any filing concerning any request for attorney fees or
(9) Provided however, that no person shall be required by this
Rule to post any:
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(A) Document which is filed under seal with the written
of the court, whether pursuant to a pre-existing written confidentiality
order, or otherwise; or
(B) Exhibits, appendixes or other attachments to documents
otherwise required to be posted; or
(C) Briefs, declarations or affidavits which are not
in electronic form in the possession, custody or control of the person filing the document, or such
person's counsel, agents, consultants or employees.
(c) Timely Posting.
A postable document shall be deemed timely posted at a Designated
Internet Site in accordance with subsection (a) of this rule if, on the same day that the document is
filed with this court:
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(1) An electronic form of the filing, prepared in any commonly
used word processing format, is forwarded to a Designated Internet Site by electronic transmission,
e-mail, physical delivery of a diskette, or any other means acceptable to that De
signated Internet Site, provided that such electronic delivery occurs by means reasonably calculated to
result in delivery by the third day following the filing; and
(2) The certificate of service required pursuant to Civil L.R.
5-4 states that service in compliance with this rule has been accomplished to a Designated Internet Site
that is identified by its physical and electronic addresses.
(d) Designated Internet Site.
"Designated Internet Site" for
purposes of this rule shall mean an Internet site that:
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(1) Is accessible at no cost to all members of the public who
are otherwise able to access the Internet through commonly used web
(2) Charges no fee to any party, intervenor, amicus or other
person subject to the provisions of this rule;
(3) Places no restrictions on any person's ability to copy or
to download, free of charge, any materials posted on the site pursuant to the requirements of this rule;
(4) Maintains and responsibly operates a notification feature
whereby any member of the public can request to receive e-mail notification, at no charge, of any
posting of materials to the Designated Internet Site;
(5) Undertakes to post on its site within two days of receipt
of the electronic copy described in Civil L.R. 26-2(c)(1) of this rule all
forwarded to it in compliance with the provisions of Civil L.R. 26-2(a);
(6) Undertakes to provide e-mail notification within one day
of receipt of the electronic copy described in Civil L.R. 26-2(c)(1) of
this rule to all other
Designated Internet Sites informing them of the posting of any materials related to securities
class action litigation;
(7) Maintains and publicizes a physical address to which the
United States Postal Service or other commonly used delivery services can
make physical delivery of documents, and/or diskettes, an Internet address in the form of an operational
orm Resource Location ("URL"), and an e-mail address to which persons subject to paragraph (a) of this
rule can transmit electronic copies of documents subject to the posting requirement of this rule;
(8) Undertakes to disclose prominently the URLs, physical
addresses, and facsimile numbers of all other Designated Internet Sites known to it; and
(9) Submits to the Secretary of the Securities and Exchange
Commission (the "Secretary") a statement, signed by a member of the bar that: identifies the Designated
Internet Site through its URL; provides the name, address, telephone number, facsimile number and e-mail
address of one or more persons responsible for operation of the site; and attests that the site
satisfies the requirements of the rule and that it will promptly notify the Secretary should it cease to
be a Designated Internet Site
(e) Suspension of Posting Requirements.
Compliance with this rule shall not be required for
any document filed at any time during which no Designated Internet Site is operational.
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Cross Reference: Commentary to Civil L.R. 3-7
See Civil L.R. 3-7 "Civil Cover Sheet and Certification in Private Securities
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The Private Securities Litigation Reform Act of 1995, Pub. L. No.
104-67, 109 Stat. 737 (1995), (the "Reform Act") contains several provisions designed to disseminate
broadly to investors information relating to the initiation and settlement of class action securities
fraud litigation in the federal courts. See, e.g., 15 U.S.C. §§ 77z-1(a)(3)(A), 77z-1(a)(7),
78u-4(a)(3)(A), 78u-4(a)(7). The legislative history of that Act makes clear that Congress intended
that litigants also make use of "
electronic or computer services" to notify class members. H.R. Conf. Rep. 369, 104th Cong., 1st Sess.
Notification to class members traditionally involves a combination
of mailings and newspaper advertisements that are expensive, employ small type, convey little
substantive information and that may be difficult for members of the class to locate. The
rapid growth of Internet technology provides a valuable means whereby
extensive amounts of information can be communicated at low cost to all actual or potential members of a
class, as well as to other members of the public. Consistent with Congressional
intent to promote the use of "electronic or computer services", this rule
seeks to employ Internet technology to disseminate broadly information related to class action
securities fraud litigation.
Civil L.R. 23-2 is designed to capitalize on the potentially
benefits of the Internet for class members, counsel, and the court while
imposing de minimus costs. Compliance is simple and relatively costless: it is accomplished by
sending an e-mail copy or diskette of a filing that already exists on a wordprocessor to a Designated
Internet Site which charges no fee for the services it renders. The rule specifically does not require
that counsel create electronic versions of filings, attachments, exhibits, or other materials that do
not already exist in readily accessible machine-readable form. Posting to a Designated Internet Site is
not a substitute for other applicable filing requirements.
The benefits of Internet access to these documents are several.
Clients will be able easily to monitor developments in litigation pursued on their behalf. Courts and
counsel will be able to observe litigation developments over a broader span of disputes and thereby
become better informed with regard to emerging issues in this complex area of the law. With addition of
full text search engines to the data contained in Designated Internet Sites, courts, litigants, and
class members alike will be able to search efficiently the most significant filings in class action
securities fraud litigation for issues and facts relevant to their analyses. Search tools now limited
to the analysis of judicial decisions will thus become applicable to the record in a case itself.
The court is informed that the Securities and Exchange Commission
is considering maintaining links to Designated Internet Sites that have provided notice to the
Commission pursuant to the provisions of section (d)(9).
The court recognizes the novel nature of this posting requirement.
The court therefore proposes to adopt the rule on a temporary basis and will regularly review its
operation and any difficulties that may arise.
58. Entry of Judgment
ADD: New Civil L.R. 58.
In any private action subject to section 27(c)(1) of the Securities Act, 15 U.S.C. §
77z-1(c)(1), and section 21D(c)(1) of the Securities Exchange Act, 15 U.S.C. § 78u-4(c)(1), the
findings required thereunder shall be entered by separate order; until entry of such order, the clerk
shall not enter judgment in the action.
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