Howard Gunty Profit Sharing Plan v. Superior Court

Background

The Howard Gunty Profit Sharing Plan (the Plan) commenced this action in 1998 on behalf of itself and all others similarly situated, against Bank Plus Corporation, its chief executive officer, and its chief financial officer. The original complaint charged negligent misrepresentation, common law fraud, deceit under Civil Code sections 1709 and 1710, and unlawful market manipulation activity under Corporations Code sections 25400 and 25500.

In March 2000, the Plan brought a motion to be appointed lead plaintiff of the class, and for certification of the class only as to the fourth cause of action, alleging violations of Corporations Code sections 25400 and 25500. On May 3, 2000, the trial court found that the Plan was a “professional plaintiff,” that it was not typical of the class, did not have sufficient knowledge of the facts of the case or involvement in it, and was not, therefore, an adequate class representative. The court refused to appoint the Plan as lead plaintiff, and continued the certification motion to an unspecified date.

On June 30, 2000, Gary Feldman sought leave to intervene in the action. The trial court denied the motion after finding…