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Stacey M. Kaplan

Partner

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Stacey M. Kaplan, a partner in the Firm’s San Francisco office, concentrates her practice in the area of complex securities litigation. 

Stacey has represented individual and institutional investors in a variety of securities class actions in which the Firm has served as Lead or Co-Lead Counsel, and has contributed to the recovery of hundreds of millions of dollars on behalf of defrauded investors.  

Community Involvement

Stacey served on a team of attorneys representing the Unitarian Universalist Association, General Synod of the United Church of Christ, Pacific Association of Reform Rabbis, Progressive Jewish Alliance, California Council of Churches, and other religious organizations, as amici curiae, challenging the validity of Proposition 8, a constitutional amendment prohibiting same-sex marriage.  More recently, Stacey represented the California Council of Churches, California Faith for Equality, Unitarian Universalist Justice Ministry California, Northern California Nevada Conference, United Church of Christ, Southern California Conference, United Church of Christ, Pacific Association of Reform Rabbis, and California Network of Metropolitan Community Churches, as amici curiae, arguing to the United States Supreme Court that civil marriage is a civil right that cannot be withheld from same-sex couples.

Awards/Rankings

  • Lawdragon 500 Leading Plaintiff Financial Lawyer, 2019-2021
  • Judicial Extern for the Honorable Terry J. Hatter, Jr., United States District Court, Central District of California
Experience

Ongoing Cases

  • CASE CAPTION Arkansas Teacher Retirement System, et al. v. OSI Systems, Inc. et al.
    COURT United States District Court for the Central District of California
    CASE NUMBER 17-8841 FMO (SKx)
    JUDGE Honorable Fernando M. Olguin
    PLAINTIFF Arkansas Teacher Retirement System (“ATRS”)
    DEFENDANTS OSI Systems, Inc. (“OSI” or the “Company”), Deepak Chopra, Ajay Mehra, and Alan Edrick
    CLASS PERIOD August 21, 2013 through February 1, 2018, inclusive

    This securities fraud class action case arises out of Defendants’ representations and omissions regarding the success of OSI’s “turnkey” security screening solutions business and its announcement of a major $150 million to $250 million contract with the government of Albania. During the Class Period, OSI touted the Albanian contract as evidence that its turnkey business was gaining traction in the market and would “transform” the Company’s business model. Unbeknownst to investors, the Albanian contract was subject to an undisclosed profit-sharing arrangement whereby OSI previously sold 49% of the OSI subsidiary holding the rights to the Albanian contract to an Albanian construction company (“ICMS”) owned by an obscure Albanian dentist with reported ties to the outgoing Albanian government, for only 490 Leke—the equivalent of $4.50.

    ATRS filed a 139-page complaint in June 2019 on behalf of a putative class of investors alleging that OSI and its former executives, including CEO Deepak Chopra, CFO Alan Edrick, and Executive Vice President Ajay Mehra, violated Section 10(b) of the Securities Exchange Act by making false and misleading statements and concealing material facts about the success of OSI’s turnkey business and its new contract with the Albanian government. As alleged, following a series of revelations about OSI’s Albanian contract arrangement and related government investigations, OSI’s stock price fell precipitously, causing significant losses and damages to the Company’s investors.

    On September 7, 2021, the parties announced that they had reached an agreement in principle to resolve the action. On October 22, 2021, ATRS filed a motion for preliminary approval.

  • CASE CAPTION     In re Qualcomm/Broadcom Merger Securities Litigation
    COURT United States District Court for the Southern District of California
    CASE NUMBER 18-1208 CAB (AHG)
    JUDGE Honorable Cathy A. Bencivengo
    PLAINTIFF Gatubhai Mistry, Gerald L. Koenig, Leonard Brenner, and Vanessa D. Washington
    DEFENDANTS Qualcomm Incorporated. (“Qualcomm” or “the Company”), Steven M. Mollenkopf, Paul E. Jacobs, Donald J. Rosenberg, and Thomas W. Horton
    CLASS PERIOD January 29, 2018 through March 12, 2018, inclusive

    This securities fraud class action arises out of Defendants’ representations and omissions regarding the potential merger with one of Qualcomm’s biggest competitors—Broadcom Ltd. (“Broadcom”), and Defendants’ covert efforts to prevent the merger from happening.  Publicly during the Class Period, Qualcomm and the individuals directing it told the market they prioritized investor value, including the potential Broadcom merger that was enthusiastically embraced by the market.  But privately, Defendants worked covertly with federal regulators— Committee on Foreign Investment in the United States (“CFIUS”)—to kill the merger and to maintain their own control of Qualcomm.

    Plaintiffs filed a 146-page amended complaint in May 2020 on behalf of a putative class of investors alleging that Qualcomm and its executives, including Steven M. Mollenkopf (CEO), Paul E. Jacobs (former Executive Chairman and Chairman of the Board), Donald J. Rosenberg (Executive Vice President, General Counsel, and Corporate Secretary), and Thomas W. Horton (member and Presiding Director of the Board), violated Section 10(b) of the Securities Exchange Act by making false and misleading statements and concealing material facts about Qualcomm’s potential merger with Broadcom.  As alleged, while publicly touting their support for the merger, Defendants covertly wrote to CFIUS to urge the regulators to block the merger on national security grounds.  Eventually, this led to a Presidential Order blocking the merger.  Qualcomm’s stock price dropped in direct response, causing significant losses and damages to the Company’s investors.

    Initially, this action was assigned to the Honorable Anthony J. Battaglia.  On March 10, 2020, Judge Battaglia dismissed Plaintiffs’ First Amended Complaint in part for failure to adequately allege scienter or loss causation, but concluded that Plaintiffs had adequately alleged that the Defendants’ statements to the market were materially misleading.  He then recused himself, and the action was reassigned to the Honorable Cathy A. Bencivengo on March 24, 2020.  Plaintiffs then filed the Second Amended Class Complaint on May 11, 2020 to address the Court’s perceived deficiencies with regard to scienter and loss causation. 

    On June 25, 2020, Defendants moved to dismiss Plaintiffs’ Second Amended Complaint, which was granted on October 9, 2020.  In that option, Judge Bencivengo disagreed with Judge Battaglia’s ruling on falsity and also held that Plaintiffs failed to adequately allege scienter, and loss causation.  Specifically, according to the Court, Plaintiffs failed to adequately plead that Qualcomm had a duty to disclose that they were lobbying CFIUS to block the merger as in the Court’s view, their boilerplate risk disclosures that CFIUS review was possible were sufficient notice to the market.  The Court also found that the Complaint did not adequately plead the Defendants’ scienter or that the stock price declines were a foreseeable consequence of any omitted or misleading information Plaintiffs’ alleged.   Plaintiffs then appealed to the Ninth Circuit Court of Appeals on November 7, 2020, where this action is currently pending. Oral argument is scheduled for November 16, 2021.  

Representative Outcomes

  • Allergan stockholders alleged that in February 2014, Valeant tipped Pershing Square founder Bill Ackman about its plan to launch a hostile bid for Allergan. Armed with this nonpublic information, Pershing then bought 29 million shares of stock from unsuspecting investors, who were unaware of the takeover bid that Valeant was preparing in concert with the hedge fund. When Valeant publicized its bid in April 2014, Allergan stock shot up by $20 per share, earning Pershing $1 billion in profits in a single day.

    Valeant’s bid spawned a bidding war for Allergan. The company was eventually sold to Actavis PLC for approximately $66 billion.

    Stockholders filed suit in 2014 in federal court in the Central District of California, where Judge David O. Carter presided over the case. Judge Carter appointed the Iowa Public Employees Retirement System (“Iowa”) and the State Teachers Retirement System of Ohio (“Ohio”) as lead plaintiffs, and appointed Kessler Topaz Meltzer & Check, LLP and Bernstein Litowitz Berger & Grossmann, LLP as lead counsel.

    The court denied motions to dismiss the litigation in 2015 and 2016, and in 2017 certified a class of Allergan investors who sold common stock during the period when Pershing was buying.

    Earlier in December, the Court held a four-day hearing on dueling motions for summary judgment, with investors arguing that the Court should enter a liability judgment against Defendants, and Defendants arguing that the Court should throw out the case. A ruling was expected on those motions within coming days.

    The settlement reached resolves both the certified stockholder class action, which was set for trial on February 26, 2018, and the action brought on behalf of investors who traded in Allergan derivative instruments. Defendants are paying $250 million to resolve the certified common stock class action, and an additional $40 million to resolve the derivative case.

    Lee Rudy, a partner at Kessler Topaz and co-lead counsel for the common stock class, commented: “This settlement not only forces Valeant and Pershing to pay back hundreds of millions of dollars, it strikes a blow for the little guy who often believes, with good reason, that the stock market is rigged by more sophisticated players. Although we were fully prepared to present our case to a jury at trial, a pre-trial settlement guarantees significant relief to our class of investors who played by the rules.”

  • After over five years of hard-fought litigation, on February 19, 2020, Judge Michael M. Anello of the U.S. District Court for the Southern District of California granted preliminary approval of a class action settlement brought on behalf of SeaWorld Entertainment, Inc. shareholders.  Since December 2014, Kessler Topaz has served as co-lead counsel in the litigation. 

    The case alleges that SeaWorld and its former executives issued materially false and misleading statements during the Class Period about the impact on SeaWorld’s business of Blackfish, a highly publicized documentary film released in 2013, in violation of Section 10(b) of the Exchange Act of 1934.  Defendants repeatedly told the market that the film and its related negative publicity were not affecting SeaWorld’s attendance or business at all.  When the underlying truth of Blackfish’s impact on the business finally came to light in August 2014, SeaWorld’s stock price lost approximately 33% of its value in one day, causing substantial losses to class members.

    In April 2019, after the close of fact and expert discovery, Defendants moved for summary judgment on all claims—their last and best opportunity to avoid a jury trial on the Class’s claims through a dispositive motion.  After highly contested briefing and oral argument, in November 2019 the Court held in a 98-page opinion that Plaintiffs had successfully shown that the claims should go to a jury.

    With summary judgment denied and the parties preparing for a February 2020 trial, the parties reached a $65 million cash settlement for SeaWorld’s investors.  

Publications

How a Dissent Produced a Majority Rationale, American Association for Justice, Business Torts Program Annual Conference (2013)