Opinion
For Mark Youngers, Individually and on behalf of all others similarly situated, Plaintiff: Laurence M Rosen, LEAD ATTORNEY, The Rosen Law Firm PA, Los Angeles, CA.
For Virtus Group, Movant: Laurence M Rosen, LEAD ATTORNEY, The Rosen Law Firm PA, Los Angeles, CA.
For Leroy Keith, Jr., Philip R. McLoughlin, Geraldine M. McNamara, James M. Oates, Richard E. Segerson, Ferdinand L. J. Vredonck, Defendants: John S Worden, Schiff Hardin LLP, San Francisco, CA.
PROCEEDINGS: (IN CHAMBERS) ORDER TO SHOW CAUSE RE: TRANSFER OF CASE
Fernando M. Olguin, United States District Judge.
On May 8, 2015, plaintiff Matt Youngers (" plaintiff") filed a putative class action alleging federal securities violations in connection with Virtus Investment Partners Inc.'s (" Virtus") sale of funds that used an " AlphaSector" strategy, in which F-Squared Investments, Inc. (" F-Squared") was a co-advisor. (See Complaint at ¶ ¶ 4 & 32-33). Principally, plaintiff alleges that Virtus and F-Squared represented that they used the AlphaSector strategy with live assets since April 2001, when in fact their past results were back-tested. (See id. at ¶ 4).
Plaintiff's claims are similar to the allegations in Cummins v. Virtus Investment Partners, Inc., 15-CV-1249-WHP, which is currently pending in the District Court for the Southern District of New York. (See S.D.N.Y. action). In that complaint, Cummins alleges that " Virtus began to market and offer funds with an 'AlphaSector' strategy through a co-advisory relationship with a newly formed investment advisory firm, [F-Squared]." (S.D.N.Y. Complaint at ¶ 4). The S.D.N.Y. Complaint also alleges that " AlphaSector's past returns back to April 2001 were presented as the legitimate results of live management of client assets, and not back-tested results that were hypothetical." (See id. at ¶ 5).
The court also notes that the Rosen Law Firm, P.A., which represents plaintiff in this action, also represents movant Rufus Bly in the S.D.N.Y. action. Moreover, plaintiff filed this action after multiple motions were filed in the S.D.N.Y. action regarding appointment of a lead plaintiff. Based on the foregoing, IT IS ORDERED that:
1. No later than July 31, 2015, Youngers shall show cause in writing why his claims should not be transferred and consolidated with the Southern District of New York action. Failure to respond to this Order shall be deemed as consent to the transfer of the instant action to the Southern District of New York.
2. Defendant shall file an opposition to plaintiff's response by August 5, 2015.