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In re Wilmington Trust Securities Litigation

United States District Court, D. Delaware

July 9, 2018

IN RE WILIMINGTON TRUST SECURITIES LITIGATION This document relates to ALL ACTIONS

         (Securities Class Action)

          MEMORANDUM

          EDUARDO C. ROBRENO, J.

         Presently before the Court is “Lead Plaintiffs' Unopposed Motion for (I) Preliminary Approval of Settlements and (II) Approval of Notice to the Class.” On behalf of themselves and other members of the class, Lead Plaintiffs[1] have agreed to two class action settlements:[2] (i) a settlement with the Wilmington Trust Defendants and Underwriter Defendants, and (ii) a settlement with KPMG LLP (“KPMG”). The settlements will resolve the instant matter, in which Lead Plaintiffs allege that Defendants violated federal securities laws by making false and misleading statements to conceal Wilmington Trust Corporation's (“Wilmington Trust”) true financial condition and lending practices. Lead Plaintiffs allege that these statements caused investors to purchase stock at artificially inflated prices and to suffer damages as a result.

         For the reasons that follow, the Court will grant the motion, preliminarily approve the proposed class action settlements set forth in the Stipulations, and approve the form, content, and manner of giving notice to the Class.

         I. BACKGROUND

         A. Factual Background and Procedural History

         Beginning in November 2010, numerous securities class actions were filed against certain Defendants in the United States District Court for the District of Delaware, alleging violations of federal securities laws. On March 7, 2010, the Court consolidated the various actions under the caption In re Wilmington Trust Securities Litigation pursuant to the Private Securities Litigation Reform Act of 1995 (“PSLRA”), and appointed Lead Plaintiffs and Lead Counsel.

         Lead Plaintiffs allege that Defendants violated the federal securities laws by making false and misleading statements regarding Wilmington Trust in the offering materials for the Offering.[3]

         On May 16, 2011, Lead Plaintiffs filed their Consolidated Securities Class Action Complaint. ECF No. 39. The matter was assigned to the Honorable Sue L. Robinson. After several rounds of motions to dismiss and to amend, Lead Plaintiffs filed the operative complaint, their Fourth Amended Consolidated Securities Class Action Complaint (“FAC”), on June 13, 2013. ECF No. 149.

         The FAC asserted claims for (i) violations of § 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”), and Rule 10b-5, (ii) violations of § 20(a) of the Exchange Act, (iii) violations of § 11 of the Securities Act of 1933 (the “Securities Act”) in connection with the Offering, (iv) violations of § 12(a)(2) of the Securities Act in connection with the Offering, and (v) violations of § 15 of the Securities Act in connection with the Offering. On March 20, 2013, the Court denied Defendants' motions to dismiss the FAC as to all Defendants except two. ECF No. 185.

         On September 12, 2014, Lead Plaintiffs moved for class certification. ECF No. 259. On September 3, 2015, the Court granted Lead Plaintiff's class certification motion in full, appointed Lead Plaintiffs as “Class Representatives, ” Lead Counsel as “Class Counsel, ” and Chimicles & Tikellis LLP as “Liaison Counsel” for the Class. ECF No. 406.

         On January 15, 2016, the Court approved notice to be disseminated to potential members of the class (the “Class Notice”). ECF No. 429. The Class Notice informed Class Members of (i) the action pending against the Defendants, (ii) the Court's certification of the action as a class action, and (iii) Class Members' right to request exclusion from the Class.[4] Id.

         Beginning on March 1, 2016, the Notice of Pendency of Class Action was mailed to potential Class Members, and on March 8, 2016, the Summary Notice of Pendency of Class Action was published in the Investor's Business Daily and transmitted over the PR Newswire.

         On June 13, 2017, the Action was reassigned to the Honorable Eduardo C. Robreno of the United States District Court for the Eastern District of Pennsylvania, sitting by designation in the District of Delaware.

         At that time, Lead Plaintiffs, Wilmington Trust Defendants and Underwriter Defendants reached an agreement to settle. The agreed-upon settlement stipulated that Wilmington Trust would pay $200, 000, 000 in cash to resolve all claims against Wilmington Trust Defendants and Underwriter Defendants. On May 15, 2018, the parties signed the stipulated settlement.

         On May 21, 2018, Lead Plaintiffs and KPMG reached an agreement stipulating that KPMG would pay $10, 000, 000 to resolve all claims against it. On May 25, 2018, ...


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