JPML Denies Transfer in Auction Rate Securities Cases

Earlier this month, the Judicial Panel on Multidistrict Litigation denied motions to transfer from plaintiffs in twenty-nine separate actions. As the panel noted:

The actions before us are securities fraud actions filed in the wake of
widespread failure in the market for auction rate securities (ARS). While the
actions share some general common factual questions, no single action is against
more than one defendant entity (or its affiliates and/or employees). Further,
the actions involve different representations made to each purchaser of ARS,
which will necessarily vary from institution to institution (and perhaps from
ARS to ARS). The proponents of centralization have failed to convince us that
any common questions of fact among these actions are sufficiently complex and/or
numerous to justify Section 1407 transfer at this time. Alternatives to transfer
exist that may minimize whatever possibilities there might be of duplicative
discovery and/or inconsistent pretrial rulings.

These cases are indicative of the massive amount of litigation that will probably arise out of the recent stock market decline.