Pension Fund v. Watson Pharmaceutica

I. Facts

On November 12, 2003, Anchor Capital Advisors (“Anchor Capital”) filed the first of four purported class actions in the Central District of California against Watson Pharmaceuti- cals, Inc. (“Watson Pharmaceuticals”) for alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of EMPLOYERS-TEAMSTERS v. WATSON PHARMACEUTICALS 9977 1934. Appellants did not file a complaint or move to intervene in any of the four district court actions. On February 9, 2004, the district court consolidated the four actions and considered the motions of various parties, including Appellants’, for appointment of lead plaintiff pursuant to the PSLRA. The dis- trict court preliminarily declared Anchor Capital as the lead plaintiff based upon its loss of $3.2 million on behalf of its investors, holding that it had sufficient authority to sue on behalf of its clients and that it was the party with the largest financial stake in the outcome of the litigation.

Watson Pharmaceuticals moved to dismiss the complaint for failure to plead fraud with the particularity required by Fed.R.Civ.P. 9(b) and the PSLRA. On August 2, 2004, the district court dismissed the complaint for…