Upload
others
View
1
Download
0
Embed Size (px)
Citation preview
Case 9:13-cv-80923-KLR Document 133-1 Entered on FLSD Docket 02/27/2015 Page 2 of 121
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA
Case No. 9:13-cv-80923-KLR
TODD STANAFORD a/k/a JERALD TODD STANAFORD, on behalf of himself and all others similarly situated,
Plaintiff, vs.
ROBERT DONALD BRUCE GENOVESE, WILLIAM TAFURI, GEOFFREY BROWNE, BG CAPITAL GROUP LTD, LOOK BACK INVESTMENTS, INC., LIBERTY SILVER CORPORATION, AND OUTLOOK INVESTMENTS, INC.,
Defendants.
DECLARATION OF WILLIAM B. FEDERMAN IN SUPPORT OF PLAINTIFFS' UNOPPOSED MOTION FOR PRELIMINARY APPROVAL OF PARTIAL
SETTLEMENT
William B. Federman declares under penalty of perjury on February 27, 2015:
1. I am a member of the law firm Federman & Sherwood, Lead Counsel for Plaintiffs
in this action. I am a member of the Bars of the State of Texas, Oklahoma and numerous United
States District Courts and Courts of Appeals. I am admitted pro hac vice in this action. I submit
this declaration in support of Plaintiffs' Unopposed Motion for Preliminary Approval of Partial
Settlement.
2. Attached hereto as Exhibit 1 is a true and correct copy of the Stipulation of
Settlement ("Stipulation") dated February 20, 2014.
3. Attached hereto as Exhibit 2 is a true and correct copy of the Cornerstone Research
report: "Securities Class Action Settlements: 2013 Review and Analysis."
4. Attached hereto as Exhibit 3 is a true and correct copy of the firm resume of Lead
Counsel Federman & Sherwood.
1
Case 9:13-cv-80923-KLR Document 133-1 Entered on FLSD Docket 02/27/2015 Page 3 of 121
5. Attached hereto as Exhibit 4 is a true and correct copy of the firm resume of Liaison
Counsel Hill & Menzer.
6. Attached hereto as Exhibit 5 is a true and correct copy of excerpts from Liberty
Silver Corporation's Form 10-K for fiscal year ended 2012 filed with the SEC on September 28,
2012
7. Plaintiffs and Defendants Liberty Silver Corporation, William Tafuri, and Geoffrey
Browne (collectively the "Liberty Silver Defendants") (together with Plaintiffs, the "Settling
Parties") have reached a $1.0 million cash settlement (the "Settlement") in partial settlement of
this action. The Settlement resolves all claims against each of the Liberty Silver Defendants, while
preserving all claims against Defendants Robert Genovese ("Genovese"), BG Capital Group Ltd.
("BG Capital"), Look Back Investments, Inc. ("Look Back"), and Outlook Investments, Inc.
("Outlook") (collectively the "BG Defendants")
8. The Settlement resulted from extensive arms-length negotiations between the
Settling Parties, including a full-day mediation session on November 20, 2014, and numerous
additional follow-up telephone conferences, with experienced JAMS' mediator Jed D. Melnick
("Melnick" or the "Mediator"). Plaintiffs and Plaintiffs' Counsel were well informed about the
strengths and weaknesses of the case as a result of their extensive pre-complaint investigations,
motion practice, consultation and discussions with damages and market efficiency experts, and
consideration of all arguments presented.
9. In particular Lead Counsel: (1) conducted an extensive pre-complaint investigation,
culminating in the filing of the Third Amended Consolidated Class Action Complaint, which
included (i) reviewing public documents and announcements issued by Liberty Silver Corporation
("Liberty Silver"), filings with the Securities and Exchange Commission ("SEC"), wire and press
2
Case 9:13-cv-80923-KLR Document 133-1 Entered on FLSD Docket 02/27/2015 Page 4 of 121
releases published by and regarding the Company, securities analysts' reports and articles about
the Company, a detailed anonymous letter to the SEC regarding Defendant Genovese's various
activities and the companies he has invested in and the stocks he has traded, Genovese's trading
records filed with the System for Electronic Disclosures, and other information readily obtainable
on the internet, (ii) interviewing numerous confidential witnesses, including former employees and
high ranking officers of John Thomas Financial ("JTF"), a broker-dealer alleged to be involved in
the Defendants' scheme, and (iii) reviewing over 25,000 pages of documents provided by JTF's
former employees; (2) consulted with damages and market efficiency experts; (3) fully considered
and briefed a response to the BG Defendants' motion to dismiss and fully considered and partially
briefed a response to the Liberty Silver Defendants' motion to dismiss; and (4) participated in a
full-day mediation session and multiple telephonic conferences with the Mediator.
10. I believe and submit that the proposed $1.0 million cash payment in partial
settlement of the claims pending in this action satisfies all of the relevant legal standards for
preliminary approval under Rule 23(e) of the Federal Rules of Civil Procedure. The proposed
Settlement will recover approximately 12% of Plaintiffs' damages expert's preliminary estimate
of aggregate damages ($8-9 million). The Settlement is fair considering the sizeable recovery to
the Class, the risks and costs attendant to further protracted litigation, and the fact that the
Settlement preserves claims against the remaining BG Defendants to which Plaintiffs and the Class
can look for additional recovery. In fact, the proposed Settlement compares favorably with
historical median settlement recoveries as a percentage of estimated damages in securities class
action lawsuits of this size. In comparison, the median recovery in settlements of securities class
action lawsuits with damages estimated to be less than $50 million for the year 2013 and the period
1996 to 2012, respectively, was 15.1% and 10.7%. See Securities Class Action Settlements 2013
3
Case 9:13-cv-80923-KLR Document 133-1 Entered on FLSD Docket 02/27/2015 Page 5 of 121
Review and Analysis, Cornerstone Research at 9, Exhibit 2, attached. The fact that the Settlement
only resolves some of Plaintiffs' claims, leaving potential upside for Plaintiffs and the Class,
makes it even that much more significant.
11. During the Class Period Liberty Silver was listed on the Over-the-Counter-Bulletin-
Board ("OTCBB"), an interdealer quotation system that is used by subscribing Financial Industry
Regulatory Authority ("FINRA") members to reflect market making interest in OTCBB-eligible
securities. Liberty Silver reported in its Form 10-K for fiscal year ended 2012, filed on September
28, 2012, that as of September 25, 2012, there were 80,710,834 shares of Liberty Silver common
stock issued and outstanding held by "approximately 29 registered stockholders of record." See
Exhibit 5, attached. In truth, based on trading activity, it appears that these shares are beneficially
held by hundreds if not thousands of geographically diverse owners.
12. It is my belief that Plaintiffs have shown their commitment to this litigation.
Plaintiff Todd Stanaford initiated this action by filing the first-filed complaint. Both Plaintiff Todd
Stanaford and Plaintiff Philip Hobley agreed to serve as Lead Plaintiffs in this case, and both
Plaintiffs have satisfied their duties as Lead Plaintiffs. Plaintiffs have submitted documents to
Plaintiffs' Counsel, reviewed and approved multiple complaints and briefs, kept abreast of the
litigation's status and have reviewed orders from the Court, participated in the mediation process,
and approved the proposed Settlement. Plaintiffs selected Federman & Sherwood as lead counsel;
as evidenced by Federman & Sherwood's firm resume (see Exhibit 3, attached), Federman &
Sherwood is amply qualified, experienced and able to conduct this litigation vigorously and
effectively. Indeed, through Federman & Sherwood's efforts, Plaintiffs' claims were thoroughly
investigated, pled and survived the BO Defendants' PSLRA-based Motion to Dismiss. With
4
Case 9:13-cv-80923-KLR Document 133-1 Entered on FLSD Docket 02/27/2015 Page 6 of 121
respect to the Liberty Silver Defendants, through Federman & Sherwood's efforts Plaintiffs have
reached this favorable partial Settlement.
I declare under penalty of perjury that the foregoing is true and correct.
Dated: February 27, 2015 Respectfully submitted,
Is/William B. Federman William B. Federman (admitted Pro Hac Vice) FEDERMAN & SHERWOOD
10205 North Pennsylvania Ave. Oklahoma City, OK 73120 Telephone: (405) 235-1560 Facsimile: (405) 239-2112 Email: wbf(it:fedcrm. an] .a.wcoin
Lead Counsel for Plaintiffs
Case 9:13-cv-80923-KLR Document 133-1 Entered on FLSD Docket 02/27/2015 Page 8 of 121
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA
TODD STAN AFORD a/k/a JERALD TODD STANAFORD, on behalf of himself and all others similarly situated,
Plaintiffs, vs.
ROBERT DONALD BRUCE GENOVESE WILLIAM TAFIJRI, GEOFFREY BROWNE, BG CAPITAL GROUP LTD, LOOK BACK INVESTMENTS, INC., OUTLOOK INVESTMENTS, INC., AND LIBERTY SILVER CORPORATION,
Defendants.
Case No, 9:13-cv-8092 3 (KLR)
STIPULATION OF SETTLEMENT
Subject to the approval of the Court, this Stipulation of Settlement ("Stipulation") is
entered into by and between Lead Plaintiffs Todd Stanaford and Philip Hobley ("Lead
Plaintiffs") and the other members of the Settlement Class (as defined herein); and Defendants
Liberty Silver Corporation ("Liberty Silver"), Geoffrey Browne, and William Tafuri (the
"Liberty Silver Defendants"), each by and through his or its attorneys. This Stipulation is
intended by the parties hereto to fully, finally and forever resolve, discharge, release and settle
the claims that Lead Plaintiffs have alleged against the Liberty Silver Defendants and Released
Parties, subject to the terms and conditions of this Stipulation, and does not constitute a
settlement of any claims by Lead Plaintiffs against any other Defendants in this Action.
Specifically, this Stipulation does not settle, resolve or release any claims that Lead Plaintiffs
have against Defendants Robert Donald Bruce Genovese, BG Capital Group Ltd, Look Back
Investments, Inc., or Outlook Investments Inc., or any parent or subsidiary, present or former
director, officer, or subsidiary of any of these defendants, any entity in which any of these
defendants has a controlling interest, and any of these defendants' respective legal
206081891 vi
Case 9:13-cv-80923-KLR Document 133-1 Entered on FLSD Docket 02/27/2015 Page 9 of 121
representatives, heirs, successors and assigns, or any immediate family member of any of these
defendants (collectively the "BG Defendants").
iaxuiu
WHEREAS, the above captioned action commenced in the United States District Court
for the Southern District of Florida on September 12, 2013 (the "Action");
WHEREAS, on September 27, 2013, Stanaford and Hobley filed the Amended Class
Action Complaint for Violations of Federal Securities Laws;
WHEREAS, by Order dated January 22, 2014, the Court appointed Stanaford and Hobley
as Lead Plaintiffs, and appointed the law firm of Federman & Sherwood ("Federman &
Sherwood") as Lead Counsel ("Lead Counsel") and Menzer & Hill, PA ("Menzer & Hill") as
Liaison Counsel;
WHEREAS, on March 24, 2014, Lead Plaintiffs filed the Second Amended Class Action
Complaint for Violations of Federal Securities Laws;
WHEREAS, on May 8, 2014, the Liberty Silver Defendants moved to dismiss the Second
Amended Class Action Complaint;
WHEREAS, on August 4, 2014, Lead Plaintiffs filed the Third Amended Class Action
Complaint for Violations of Federal Securities Laws;
WHEREAS, on August 6, 2014, the Court denied the Liberty Silver Defendants' Motion
to Dismiss the Second Amended Complaint as moot;
WHEREAS, on October 6 2014, the Liberty Silver Defendants moved to dismiss the
Third Amended Class Action Complaint for Violations of Federal Securities Laws ("the Motion
to Dismiss");
WHEREAS, pursuant to the PSLRA, all proceedings, including discovery, have been
2
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 10 of 121
stayed pending the Court's decision on the motions to dismiss;
WHEREAS, following arms-length negotiations with the assistance of an experienced
mediator on November 20, 2014, and subsequent negotiations, Lead Plaintiffs and the Liberty
Silver Defendants have agreed to a settlement of the Action;
WHEREAS, Lead Counsel, on behalf of Lead Plaintiffs, have conducted an investigation
relating to the claims and the underlying events and transactions alleged in the Complaint;
WHEREAS, Lead Counsel and Lead Plaintiffs recognize the expense, risks and uncertain
outcome of any litigation and subsequent appeals, especially for a complex action such as this
with its inherent difficulties and delays, Lead Plaintiffs, on behalf of themselves and other
members of the Settlement Class (collectively, "Plaintiffs"), desire to settle the Plaintiffs' claims
against the Liberty Silver Defendants in this Action on the terms and conditions set forth in this
Stipulation;
WHEREAS, Lead Plaintiffs and Lead Counsel consider the Settlement to be fair;
reasonable, adequate and in the best interests of the members of the Settlement Class and have
agreed that the Released Parties should be released from the Released Claims (as defined below)
pursuant to the terms and provisions of this Stipulation; and have agreed to the dismissal of the
Action with prejudice, after considering the substantial benefits that the Lead Plaintiffs and all
members of the Settlement Class will receive from the settlement of the Action; and
WHEREAS, the Liberty Silver Defendants, while continuing to deny all allegations of
wrongdoing or liability whatsoever arising out of any of the conduct, statements, acts or
omissions alleged, or that could have been alleged in this action, also recognize the expense,
risks and uncertain outcome of any litigation, especially in a complex action such as this, and the
Liberty Silver Defendants desire to settle the claims against them so as to avoid lengthy,
3
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 11 of 121
distracting and time-consuming litigation and the burden, inconvenience and expense connected
therewith, without in any way acknowledging any fault or liability, such that this Stipulation and
all related documents are not, and shall not in any event be construed or deemed to be evidence
of or an admission or concession on the part of the Liberty Silver Defendants with respect to any
claim or of any fault or liability or wrongdoing or damage whatsoever, or any infirmity in the
defenses that the Liberty Silver Defendants have asserted or could have, of or by any of them or
of any other person;
NOW, THEREFORE, IT IS HEREBY STIPULATED, CONSENTED TO AND
AGREED between Lead Plaintiffs and the Liberty Silver Defendants, by and through their
respective attorneys or counsel of record, that the Action and the Released Claims as against the
Released Parties shall be settled, compromised, and dismissed with prejudice, subject to the
approval of the Court, in the manner and upon the terms and conditions hereafter set forth:
I. DEFINITIONS
A. To the extent not otherwise defined herein, as used in this Stipulation, the
following terms have the meanings specified below:
"Authorized Claimant" means a member of the Settlement Class who
submits a timely and valid Proof of Claim and Release form to the Claims Administrator and
whose proof of claim is not rejected. Only those members of the Settlement Class filing valid
and timely Proofs of Claim and Releases shall be entitled to receive any distributions from the
Net Settlement Fund.
2. "Claims Administrator" means the administrator appointed by the Court.
3, "Court" means the United States District Court for the Southern District of
Florida.
4
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 12 of 121
4, "Effective Date" means the date on which all of the conditions to the
Settlement, set forth in Section X1(A), are satisfied.
5. "Escrow Account" means the interest-bearing account created pursuant to
Sections TI-HI.
6, "Escrow Agent" means Lead Counsel or its designees. The Escrow Agent
shall perform the duties as set forth in this Stipulation.
7. "Execution Date" means the date that this Stipulation has been signed by
all the signatories hereto through their counsel,
8. "Final" means, with respect to any judgment or order, including but not
limited to the Final Judgment, that such judgment or order represents a final and binding
determination of all issues within its scope and is not subject to further review on appeal or
otherwise. Without limitation, a judgment or order becomes "Final" when: (a) the time within
which to seek review, alteration, amendment or appeal of such judgment or order, including (if
applicable) any three (3) day period for service by mail under Federal Rule of Civil Procedure
6(a) and (e) or any such service period applicable to an action in state court, has expired without
any review, alteration, amendment or appeal having been sought or taken; or (b) if an appeal,
petition for writ of certiorari, motion or other application for review, alteration or amendment is
filed, sought or taken, the date as of which such appeal, petition, motion or other application
shall have been finally determined in such a manner as to affirm the Court's original order
without material modification and the time, if any, for seeking further review has expired.
9. "Final Judgment" means the Order of Final Judgment and Dismissal of the
Court approving the Stipulation of Settlement and dismissing the Action with prejudice and
without costs, substantially in the form of Exhibit B hereto.
5
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 13 of 121
10. "Final Settlement Approval Hearing" means the final hearing to be held
by the Court as required by Federal Rule of Civil Procedure 23 to determine whether the
proposed Settlement should be approved as fair, reasonable and adequate; whether all Released
Claims should be dismissed with prejudice; whether an order approving the Settlement should be
entered thereon; whether the plan of allocation of the Settlement Fund should be approved; and
whether and in what amounts to award attorneys' fees and expenses to Lead Counsel and
reimbursement awards to Lead Plaintiffs. "Net Settlement Fund" means the Settlement Amount
plus all interest earned thereon, less: (i) attorneys fees and expenses and reimbursement awards
awarded by the Court; (ii) taxes and tax expenses; and (iii) Notice and Administration Expenses.
11. "Notice and Administration Expenses" means all expenses incurred
(whether or not paid) in connection with the settlement administration, and shall include, among
other things, the cost of publishing summary notice,and printing and mailing the notice and Proof
of Claim and Release, as directed by the Court, and the cost of processing proofs of claim and
distributing the Net Settlement Fund to Settlement Class Members who timely submit a valid
Proof of Claim and Release.
12. "Parties" means the Lead Plaintiffs, the Settlement Class Members, and
the Liberty Silver Defendants. The "parties hereto" means all those Persons whose counsel have
signed this Stipulation on their behalf.
13. "Person" means any individual, corporation, partnership (whether general
or limited), limited liability company, association, affiliate, joint stock company, trust, estate,
unincorporated association, government and any political subdivision thereof, and any other type
of legal or political entity.
6
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 14 of 121
14. "Plan of Allocation" means the plan or formula of allocation of the Net
Settlement Fund, to be approved by the Court, which plan or formula shall govern the
distribution of the Net Settlement Fund to Authorized Claimants. The Plan of Allocation is not a
part of this Stipulation; the Liberty Silver Defendants shall not have any responsibility or liability
with respect thereto, and any order or proceedings relating to the Plan of Allocation shall not
operate to terminate or cancel this Stipulation or affect the finality of the Final Judgment or any
other orders entered by the Court pursuant to this Stipulation.
15. "Released Claims" shall mean all claims, demands, rights, liabilities, and
causes of action, known or unknown, whether direct, individual, or representative thereof, arising
under federal, state, local or foreign statutory or common law or any other law, rule or
regulation, to the fullest extent that the law permits their release, asserted or that might have been
asserted by Lead Plaintiffs or any member of the Settlement Class in any forum arising out of,
based upon, or in any way related to their purchase, sale, or holding of Liberty Silver stock
during the Settlement Class Period and the allegations, transactions, facts, matters or
occurrences, representations or omissions involved, set forth, or referred to in the Complaint
including all claims that were or could have been asserted in the Action. This release does not
and will not affect any claim asserted or to be asserted against named defendants in the Action,
including the BG Defendants, other than the Liberty Silver Defendants.
16, "Liberty Silver Defendants' Released Claims" means any and all claims,
rights, or causes of action or liabilities whatsoever, whether based in federal, state, local,
statutory or common law or any other law, rule or regulation, including both known claims and
Unknown Claims, that have been or could have been asserted in the Action or any forum by the
Liberty Silver Defendants against the Lead Plaintiffs, Settlement Class Members or their
ii
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 15 of 121
attorneys from any claims relating to the institution or prosecution of the Action (except for
claims to enforce the Settlement).
17. "Released Parties" means the Liberty Silver Defendants, and each of their
immediate family members, heirs, executors, administrators, successors, and assigns; the Liberty
Silver Defendants' present, former and future employees, insurers, officers, directors, partners,
attorneys, accountants, legal representatives, receivers, assigns, subrogees, trustees, heirs,
beneficiaries, servants, representatives, agents, and all other Persons in privity with any of them;
any Person or entity which is or was related to or affiliated with any Defendant, or in which any
Defendant has or had a controlling interest; and the present, former and future parents,
subsidiaries, divisions, affiliates, predecessors, successors, employees, officers, directors,
principals, partners, attorneys, accountants, assigns, and agents of all of the foregoing.
Specifically excluded from the definition of "Released Parties" and this release are all named
defendants in the Action, including the BO Defendants, other than the Liberty Silver Defendants.
18. "Settlement Amount" means One Million Dollars ($1,000,000.00) in
cash.
19. "Settlement Class" or "Settlement Class Members" means, for purposes
of this Settlement only, all persons or entities who, during the Settlement Class Period, purchased
publicly traded shares of Liberty Silver (OTC: LBSV) Common Stock during the period
February 10, 2010 through October 5, 2012, inclusive of those dates, and were damaged thereby.
Excluded from the definition of "Settlement Class" and "Settlement Class Members" are (a)
Defendants; any parent or subsidiary, present or former director, officer, or subsidiary of on any
of the Defendants; any entity in which any Defendant respectively has a controlling interest; and
Defendants' respective legal representatives, heirs, successors and assigns, any immediate
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 16 of 121
family member of an individual defendant and (b) any putative members of the Settlement Class
who timely and validly exclude themselves from the Settlement Class in accordance with the
requirements set forth in the Mailed Notice and Rule 23 of the Federal Rules of Civil Procedure.
20. "Settlement Class Period" means the period of time from February 10,
2010 through October 12, 2012, inclusive of those dates.
21. "Settlement Fund" means the Settlement Amount plus all interest earned
thereon.
22. "Unknown Claims" means any and all claims, demands, rights, liabilities,
and causes of action of every nature and description which Lead Plaintiffs, any member of the
Settlement Class or any Defendant does not know or suspect to exist in his, her or its favor at or
after the Execution Date and including, without limitation, those which, if known by him, her or
it, might have affected his, her or its decision(s) with respect to the Settlement, including the
decision not to object or not to exclude himself, herself, or itself from the Settlement. With
respect to any and all Released Claims, the parties hereto stipulate and agree that, upon the
Effective Date, Lead Plaintiffs and Liberty Silver Defendants shall expressly waive, and each of
the Settlement Class Members shall be deemed to have waived, and by operation of the Final
Judgment shall have waived, any and all provisions, rights, and benefits conferred by any law of
any state or territory of the United States, or principle of common law, which is similar,
comparable, or equivalent to Cal. Civ. Code § 1542, which provides:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.
9
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 17 of 121
23. Lead Plaintiffs and the Liberty Silver Defendants and the members of the
Settlement Class may hereafter discover facts in addition to or different from those that any of
them now know or believe to be true with respect to the subject matter of the Released Claims,
or the Liberty Silver Defendants' Released Claims but Lead Plaintiffs and Liberty Silver
Defendants shall expressly have, and each member of the Settlement Class shall be deemed to
have and by operation of the Final Judgment shall have, fully, finally, and forever settled and
released any and all Released Claims or Liberty Silver Defendants' Released Claims known or
unknown, suspected or unsuspected, contingent or non-contingent, whether or not concealed or
hidden, that now exist, or heretofore have existed upon any theory of law or equity now existing
or coming into existence in the future, including, but not limited to, conduct that is negligent,
reckless, intentional, with or without malice, or a breach of any duty, law or rule, without regard
to the subsequent discovery or existence of such different or additional facts. Lead Plaintiffs and
Liberty Silver Defendants acknowledge, and the members of the Settlement Class by operation
of the Final Judgment shall be deemed to have acknowledged, that the waivers contained in this
paragraph, and the inclusion of "Unknown Claims" in the definition of Released Claims and the
Liberty Silver Defendants' Released Claims were separately bargained for and are key elements
of the Settlement,
II. THE SETTLEMENT CONSIDERATION
A. Within thirty (30) business days following preliminary approval of the Settlement
by the Court and receipt by the Liberty Silver Defendants of complete information for paying by
wire transfer, including a W-9 for the Settlement Fund, Liberty Silver Defendants and/or their
insurers will collectively pay $1,000,000 (the "Settlement Amount") in cash into a separate,
interest-bearing escrow account maintained by the Escrow Agent on behalf of Lead Plaintiffs and
10
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 18 of 121
the Settlement Class to resolve the Action. The Liberty Silver Defendants' payment obligations,
as set forth above, are not joint and several.
III. THE ESCROW ACCOUNT
A. Lead Plaintiffs shall cause to be opened an Escrow Account maintained by the
Escrow Agent into which the Settlement Amount is to be deposited. The Escrow Agent shall
invest the Settlement Fund exclusively in instruments or accounts backed by the full faith and
credit of the United States Government or fully insured by the United States Government or an
agency thereof, including a U.S. Treasury Money Market Fund or a bank account that is either
(a) fully insured by the Federal Deposit insurance Corporation ("FDIC") or (b) secured by
instruments backed by the full faith and credit of the United States Government, The Escrow
Agent shall reinvest the proceeds of these instruments as they mature in similar instruments at
their then-current market rates, Lead Plaintiffs and Settlement Class Members shall look solely
to the Net Settlement Fund for payment and satisfaction of any and all Released Claims,
B. All funds held by the Escrow Agent shall be deemed in custodia içgjs of the Court
and shall remain subject to the jurisdiction of the Court until such time as such funds shall be
distributed pursuant to the Stipulation and/or further orders of the Court.
C. The Escrow Agent shall not disburse the Settlement Fund except as provided in
this Stipulation, by order of the Court, or with the prior written agreement of counsel for the
Liberty Silver Defendants and Lead Counsel.
D. The Escrow Agent shall be authorized to execute only such transactions as are
consistent with the terms of this Stipulation and the order(s) of the Court,
E. After the Effective Date, the Liberty Silver Defendants shall have no interest in
the Settlement Fund or in the Net Settlement Fund,
19
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 19 of 121
F. Defendants shall not bear any responsibility for or liability related to the
investment of the Settlement Fund by the Escrow Agent.
i itt aaii iii asi a iii i u t nv i watasiva i
A. The Claims Administrator, in consultation with Lead Counsel, shall establish and
administer the Notice and Administration Account. The Notice and Administration Account
shall be established using funds in the Settlement Fund and shall be used only for the payment of
Notice and Administration Expenses. Funds deposited in the Notice and Administration Account
shall not be excessive, and Lead Counsel shall not deposit more than $250,000 into the Notice
and Administration Account from the Settlement Fund without obtaining prior written approval
from counsel for the Liberty Silver Defendants. The Escrow Agent is authorized to transfer
funds from the Settlement Fund to the Notice and Administration Account for Notice and
Administration Expenses. To the extent that the funds in the Notice and Administration Account
exceed the Notice and Administration Expenses, the Claims Administrator shall return such
funds to the Escrow Agent, and the Escrow Agent shall treat such funds as part of the Settlement
Fund as described herein,
V. CONFIRMATORY DISCOVERY
A. The Parties agree to reasonable cooperation with each other to the extent
necessary to conduct reasonable confirmatory discovery with respect to the factual and legal
issues in the Action, the settlement, and the fairness of its terms as set forth in the Stipulation
("Confirmatory Discovery").
VI. PRELIMINARY IUTRIH) tXIII *1] I] t%I
1I
A. Lead Plaintiffs shall submit this Stipulation together with their Exhibits to the
Court, and the Lead Plaintiffs shall apply for entry of an order (the "Preliminary Approval
12
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 20 of 121
Order") substantially in the form and content of Exhibit A attached hereto, requesting, inter alia,
the preliminary approval of the settlement set forth in the Stipulation, and final approval of forms
of notice to be mailed to all potential Settlement Class Members who can be identified with
reasonable effort (the "Mailed Notice") and to be published (the "Summary Notice"),
substantially in the forms and contents of Exhibits A-i and A-2 hereto, respectively. The Mailed
Notice shall include the general terms of the settlement set forth in the Stipulation and shall set
forth the procedure by which Persons who otherwise would be Members of the Settlement Class
may request to be excluded from the Settlement Class.
B. Within seven (7) calendar days of entry of the Preliminary Approval Order,
Liberty Silver shall provide or cause to be provided to the Claims Administrator, without any
charge to Lead Plaintiffs or the Settlement Class, Liberty Silver's registered shareholder lists in
electronic and searchable form, as appropriate for providing notice to the Settlement Class
Members.
C. The Parties shall request that, after the Mailed Notice and Summary Notice have
been mailed and published, respectively, in accordance with this Stipulation, the Court hold the
Final Approval Settlement Hearing and finally approve the settlement of the Action with respect
to the Parties,
D. The Parties hereby stipulate to certification of the Settlement Class, pursuant to
Rule 23(b)(3) of the Federal Rules of Civil Procedure, solely for purposes of this Stipulation and
the Settlement set forth herein. The Settlement Class is to be certified solely for claims asserted
in the Action against the Liberty Silver Defendants. if this Stipulation is not approved by the
Court, however, then (a) Liberty Silver Defendants shall retain all rights to (i) object to and
oppose class certification, or (ii) challenge the standing of Lead Plaintiffs or any other
In Ii
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 21 of 121
intervening plaintiff; and (b) this Stipulation and any motion or other papers filed in support of
its approval shall not be offered as evidence of any agreement, admission or concession that any
class should be or remain certified in the Action or that Lead Plaintiffs or any other intervening
plaintiff has standing or any legal right to represent any class.
VII. FINAL JUDGMENT APPROVING THE SETTLEMENT
A. At the Final Settlement Approval Hearing, the Parties shall jointly request entry of
the Final Judgment, substantially in the form attached hereto as Exhibit B and such form shall
include the following language, in accordance with Section 21D-4(f)(7)(A) of the Private
Securities Litigation Reform Act of 1995, IS U.S.C. §78u-4(f)(7)(A) (the "PSLRA"), that bars:
all future claims for contribution arising out of the Action - (i) by any person against any
Released Party; and (ii) by the Released Parties against any person, other than a person whose
liability has been extinguished by the Settlement,
VIII. ATTORNEYS' FEES AND EXPENSES
A. Lead Counsel may submit an application (the "Fee and Expense Application") for
distributions to them from the Settlement Fund for an award of attorneys' fees and payment of
expenses (including the fees and expenses of any experts or consultants) incurred in connection
with prosecuting the Action, plus any interest on such attorneys' fees, costs, and expenses at the
same rate and for the same periods as earned by the Settlement Fund (until paid) as may be
awarded by the Court, Lead Counsel may also request reimbursement awards for Lead
Plaintiffs.
B. Lead Counsel's attorneys' fees and expenses, and any reimbursement awards to
the Lead Plaintiffs, as are awarded by the Court, shall be payable from the Settlement Fund
immediately after the Court executes an order awarding such fees and expenses and/or
reimbursement awards, subject to Lead Counsel's and Lead Plaintiffs' obligations to make
14
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 22 of 121
appropriate refunds or repayments to the Settlement Fund. The obligations to make appropriate
refund or repayment may be enforced by the Court. in the event that (i) the Effective Date does
not occur, (ii) the Judgment and/or order making such fee and expense award is finally reversed
or modified, (iii) the Stipulation is canceled or terminated for any reason, (iv) the Judgment does
not become Final, or (v) if and when as a result of any appeal and/or further proceedings on
remand, or successful collateral attack, the fee expense or reimbursement award are reduced or
reversed, and in the event that any attorneys' fees, expenses or costs have been paid to any
extent, then Lead Counsel and Lead Plaintiffs and/or the Class Representatives shall within ten
(JO) Days from receiving notice from any Defendant or from a court of appropriate jurisdiction,
refund to the Settlement Fund the fees, expenses and costs previously paid to them from the
Settlement Fund in an amount consistent with the event requiring the repayment. All such
attorneys' fees and expenses shall be paid solely from the Settlement Fund, and none of the
Released Parties shall be required to pay any portion of such attorneys' fees and/or
reimbursement of expenses.
B. The failure of the Court to award the full amount of any fees and expenses
requested by Lead Counsel shall not affect the finality of the Final Judgment or the Settlement
contemplated by this Stipulation.
i 1.7. i iuvitw:i winmtrar LI I bi i
A. The Claims Administrator shall discharge its duties under Lead Counsel's
supervision. Neither the Liberty Silver Defendants nor the Released Parties shall have any
responsibility for the administration of the Settlement, except as described by Section VI.B, and
shall have no liability to any person, including, but not limited to, the Settlement Class, in
connection with such administration, Lead Counsel shall cause the Claims Administrator to send
15
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 23 of 121
the Mailed Notice and shall cause to be published the Summary Notice pursuant to the terms of
the Preliminary Approval Order or whatever other form or manner might be ordered by the
Court. Each Settlement Class Member wishing to participate in the Settlement shall be required
to submit a Proof of Claim and Release in substantially the form annexed hereto as Exhibit A-3,
signed under penalty of perjury by the beneficial owner(s) of the stock or by someone with
documented authority to sign for the beneficial owner(s), and supported by such documentation
as specified in the instructions accompanying the Proof of Claim and Release,
B. All Proofs of Claim and Releases must be received within the time prescribed in
the Preliminary Approval Order unless otherwise ordered by the Court. Any Settlement Class
Member who fails to submit a properly completed Proof of Claim and Release within such
period as shall be authorized by the Court, or otherwise allowed, shall be forever barred from
receiving any payments pursuant to this Stipulation or from the Net Settlement Fund, but will in
all other respects be subject to the provisions of this Stipulation and the Final Judgment,
including, without limitation, the release of the Released Claims and dismissal of the Action with
prejudice. Notwithstanding the foregoing, Lead Counsel may, in their discretion, recommend
that the Court accept for processing late submitted claims so long as the distribution of the Net
Settlement Fund to Authorized Claimants is not materially delayed.
C. The Claims Administrator shall administer the Settlement subject to such
approvals of the Court as circumstances may require.
D. Each Proof of Claim and Release shall be submitted to the Claims Administrator
who shall determine, in accordance with this Stipulation and the Plan of Allocation to be
formulated by Lead Counsel, with the assistance of an economic/financial consultant, for
16
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 24 of 121
approval by the Court, the extent, if any, to which each claim shall be allowed, subject to appeal
to the Court.
F. Under the supervision of Lead Counsel, the Claims Administrator shall administer
and calculate the claims submitted by the members of the Settlement Class, determine the extent
to which claims shall be allowed, and oversee distribution of the Net Settlement Fund subject to
appeal to, and jurisdiction of the Court. Neither Lead Counsel, its designees or agents,
consultants, Lead Plaintiffs, the Liberty Silver Defendants' counsel or the Liberty Silver
Defendants shall have any liability to any Person arising out of such determination.
F. The administrative determination of the Claims Administrator accepting and
rejecting claims shall be presented to the Court by Lead Counsel, on notice to the Liberty Silver
Defendants' counsel, for approval by the Court.
EL Following the Effective Date, the Net Settlement Fund shall be distributed to
Authorized Claimants by the Claims Administrator upon application to the Court by Lead
Counsel.
H. The Net Settlement Fund shall be distributed to the Authorized Claimants
substantially in accordance with the terms of this Stipulation and a Plan of Allocation to be
approved by the Court, subject to and in accordance with the following:
Any such Plan of Allocation is not a part of this Stipulation and it is not a
condition of this Settlement that any particular Plan of Allocation be approved. No funds from
the Net Settlement Fund shall be distributed to Authorized Claimants until after the Effective
Date.
2, Each Settlement Class Member who claims to be an Authorized Claimant
shall be required to submit to the Claims Administrator a completed Proof of Claim and Release
17
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 25 of 121
signed under penalty of perjury and supported by such documents as specified in the Proof of
Claim and Release and as are reasonably available to such Settlement Class Member.
3. Except as otherwise ordered by the Court, all Settlement Class Members
who fail timely to submit a Proof of Claim and Release within such period as may be ordered by
the Court, or otherwise allowed, shall be forever barred from receiving any payments pursuant to
the Stipulation and the Settlement set forth herein, but shall in all other respects be subject to and
bound by the provisions of the Stipulation, the releases contained herein, and the Final Judgment.
4. All Persons who fall within the definition of the Settlement Class and who
do not timely and validly request to be excluded from the Settlement Class in accordance with
the instructions set forth in the Mailed Notice (as defined in Section V.A., above) shall be subject
to and bound by the provisions of this Stipulation, the releases contained herein, and the Final
Judgment with respect to all Released Claims, regardless of whether such Persons seek or obtain
by any means, including, without limitation, by submitting a Proof of Claim and Release or any
similar document, any distribution from the Settlement Fund or the Net Settlement Fund.
1. Neither the Liberty Silver Defendants nor their counsel shall have any
responsibility for, interest in, or liability whatsoever with respect to the investment or distribution
of the Settlement Fund, the Plan of Allocation, the determination, administration, or calculation
of claims, the distribution of the Net Settlement Fund, or any losses incurred in connection with
any such matters.
J. The Liberty Silver Defendants shall have no involvement in the solicitation of, or
review of Proofs of Claim and Releases, or involvement in the administration process, which will
be conducted by the Claims Administrator in accordance with this Stipulation.
18
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 26 of 121
K. Any change in the allocation of the Net Settlement Fund ordered by the Court
shall not affect the validity or finality of this Settlement.
L. No Person shall have any claim against Lead Plaintiffs or Lead Counsel, the
Claims Administrator, the Liberty Silver Defendants or their respective counsel based on
investments or distributions made substantially in accordance with this Stipulation and the
Settlement contained herein, the Plan of Allocation or further orders of the Court.
M. To the extent that any monies remain in the Net Settlement Fund after the Claims
Administrator has caused distributions to be made to all Authorized Claimants, whether by
reason of un-cashed distributions or otherwise, then, after the Claims Administrator has made
reasonable and diligent efforts to have Authorized Claimants cash their distributions, any balance
remaining in the Net Settlement Fund one (1) year after the initial distribution of such funds shall
be re-distributed to Authorized Claimants who have cashed their initial distributions and who
would receive at least $1000 from such re-distribution, after payment of any unpaid costs or fees
incurred in administering the Net Settlement Fund for such re-distribution. Additional re-
distributions to Authorized Claimants who have cashed their prior distribution checks and who
would receive at least $1000 on such additional re-distributions may occur thereafter if Lead
Counsel, in consultation with the Claims Administrator, determine that additional re-
distributions, after the deduction of any additional fees and expenses that would be incurred with
respect to such re-distributions, would be cost-effective. At such time as it is determined that the
re-distribution of funds remaining in the Net Settlement Fund is not cost-effective, the remaining
balance in the Net Settlement Fund shall be contributed to non-sectarian, not-for-profit 501(c)(3)
organization(s), to be recommended by Lead Counsel and approved by the Court.
19
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 27 of 121
N. The amount of any verdict or judgment entered against a Non-settling Defendant in
the Action shall be reduced by no more than the greater of (a) the total amount paid by the
Liberty Silver Defendants and/or by (b) no more than the amount of any contribution claim the
Court determines that a Non-settling Defendant would be entitled to assert against the Liberty
Silver Defendants, which shall be no more than the proportionate share of liability of the Liberty
Silver Defendants.
0. This Stipulation permanently bars, restrains and enjoins any other person or entity
who is or may be liable to Lead Plaintiffs and/or the Class and the successors and assigns of any
of them from commencing, prosecuting or asserting any action or claim against the Liberty
Silver Defendants or any of the Released Parties for indemnification and/or contribution arising
out of claims made by Lead Plaintiffs on behalf of themselves or any Class Member.
A. The Parties, their counsel, the Court, and the Escrow Agent shall treat the Escrow
Account as being at all times a "qualified settlement fund" within the meaning of Treas. Reg. §
1.46813-1 for all periods on and after the date of the Preliminary Approval Order, The Parties,
their counsel, the Court and the Escrow Agent agree to take no action inconsistent with the
treatment of the Escrow Account in such manner. In addition, the Escrow Agent, and as
necessary, the Liberty Silver Defendants, shall timely make such elections as are necessary or
advisable to carry out the terms of this Stipulation, including making the "relation back election"
(as defined in Treas. Reg. § 146813-10)) back to the earliest permitted date. Such elections shall
be made in compliance with the procedures and requirements contained in such regulations. It
shall be the responsibility of the Escrow Agent to timely and properly prepare and deliver the
necessary documentation for signature by all necessary parties and thereafter to cause the
appropriate filing to occur. All provisions of this Stipulation shall be interpreted in a manner that
20
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 28 of 121
is consistent with the Escrow Account being a "qualified settlement fund" within the meaning of
Treas. Reg. § 1.468B-1,
B. For the purpose of § 468B of the Internal Revenue Code of 1986, as amended,
and the regulations promulgated thereunder, the "administrator" shall be the Escrow Agent. The
Escrow Agent shall satisfy the administrative requirements imposed by Treas. Reg. § 1.468B-2
by e.g., (i) obtaining a taxpayer identification number, (ii) timely and properly satisfying any
information reporting or withholding requirements imposed on distributions from the Escrow
Account, and (iii) timely and properly filing or causing to be filed on a timely basis, all federal,
state, local and foreign tax returns and other tax related statements necessary or advisable with
respect to the Escrow Account (including, without limitation, all income tax returns, all
informational returns, and all returns described in Treas. Reg. § 1.468B-2(i)), and timely and
properly paying any taxes imposed on the Escrow Account. Such returns and Statements (as
well as the election described in this X.B. shall be consistent with this X.B. and in all events shall
reflect that all taxes (including any estimated taxes, interest or penalties) on the income earned
by the Escrow Account shall be paid out of the Escrow Account as provided in X.C. hereof.
C. All (i) taxes arising with respect to the income earned by the Escrow Account and
(ii) tax expenses shall be paid out of the Escrow Account. Further, taxes and the tax expenses
shall be treated as, and considered to be, a cost of administration of the settlement and shall be
timely paid by the Escrow Agent out of the Escrow Account without prior order from the Court,
and the Escrow Agent shall be obligated (notwithstanding anything herein to contrary) to
withhold from distribution to Authorized Claimants any funds necessary to pay such amounts (as
well as any amounts that may be required to be deducted or withheld under
21
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 29 of 121
Treas. Reg, § 146813-2(1)(2)), All parties and their tax attorneys and accountants shall to the
extent reasonably necessary carry out the provisions of paragraphs A-C of this Section.
D. The Liberty Silver Defendants shall have no responsibility to make any filings
relating to the Escrow Account and will have no responsibility to pay tax on any income earned
by the Escrow Account. After the Settlement Amount is funded into the Escrow Account, the
Escrow Agent shall indemnify each of the Liberty Silver Defendants and Released Parties for all
taxes imposed on the income earned by the Settlement Fund. Without limiting the foregoing,
from the Settlement Fund, the Escrow Agent shall reimburse Liberty Silver Defendants within
ten (JO) days of written demand jointly submitted by Liberty Silver Defendants' Counsel for any
such taxes to the extent they are imposed on Liberty Silver Defendants for a period in which the
Settlement Fund does not qualify as a "qualified settlement fund" In the event this Stipulation is
canceled or terminated, Liberty Silver (and/or its insurer) shall be responsible for the payment of
their respective share of taxes (including any interest or penalties), if any, on their respective
portion of said income.
XI. CONDITIONS OF SETTLEMENT; RELEASE; EFFECT OF DISAPPROVAL, CANCELLATION OR TERMINATION
A. This Stipulation shall be subject to the following conditions and, except as
provided herein, shall be canceled and terminated unless:
The Court enters the Preliminary Approval Order, as provided in Section
2, Liberty Silver Defendants and/or their insurers shall have caused to be
timely transferred, or caused to be transferred, their respective shares of the Settlement Amount
($1.0 million);
22
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 30 of 121
3, The Court has approved the settlement as described herein, following
notice to the Settlement Class and a Hearing, as prescribed by Rule 23 of the Federal Rules of
Civil Procedure, and has entered the Final Judgment, as provided in Section VI;
4, The time within which Liberty Silver Defendants may exercise their
option to terminate this Stipulation in accordance with the terms of the Supplemental Agreement
described in Section X1(G) shall have expired without the exercise of that option;
5, The Court shall have entered the Final Judgment, in all material respects
in the form set forth in Exhibit B attached hereto, or an order and final judgment in a form that is
not in all material respects identical to Exhibit B attached hereto (an "Alternative Judgment")
and Liberty Silver Defendants do not elect to terminate the settlement following the entry of such
Alternative Judgment;
6. Counsel for all Persons listed on the signature pages of this Stipulation
have executed this Stipulation; and
7. The Final Judgment, or any Alternative Judgment, has become Final.
B. Upon the Effective Date:
Lead Plaintiffs and the Settlement Class Members, on behalf of
themselves, and to the fullest extent permitted by law, their respective present or past heirs,
executors, estates, administrators, predecessors, successors, assigns, parents, subsidiaries,
partners, directors, personal representatives, attorneys, agents, partners, and any other Person
claiming (now or in the future) to have acted through or on behalf of them, shall hereby be
deemed to have, and by operation of the Final Judgment shall have, fully, finally, and forever,
released, relinquished, settled and discharged the Released Parties from the Released Claims and
shall be permanently barred and enjoined from instituting, commencing, or prosecuting any
Li nfl
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 31 of 121
Released Claim against any of the Released Parties directly, indirectly or in any other capacity,
whether or not such members of the Settlement Class execute and deliver a Proof of Claim and
Release to the Claims Administrator.
2. The Released Parties, on behalf of themselves, and to the fullest extent
permitted by law, their heirs, executors, administrators, personal representatives, attorneys,
agents, partners, successors and assigns, and any other Person claiming (now or in the future) to
have acted through or on behalf of them, shall hereby be deemed to have, and by operation of the
Final Judgment shall have, fully, finally, and forever, released, relinquished, settled and
discharged the Lead Plaintiffs, the members of the Settlement Class and their attorneys from the
Liberty Silver Defendants' Released Claims and shall be permanently barred and enjoined from
instituting, commencing, or prosecuting any Liberty Silver Defendants' Released Claims against
any of them directly, indirectly or in any other capacity.
C. If, except as provided herein, all of the conditions specified in paragraph A of this
Section are not met, then this Stipulation shall be canceled and terminated, unless Lead Counsel
and the Liberty Silver Defendants' counsel mutually agree in writing to proceed with the
Settlement,
D. If either (a) the Effective Date does not occur, (b) this Stipulation is canceled or
terminated pursuant to its terms, or (c) this Stipulation does not become final for any reason, then
the Settlement Fund and all interest earned on the Settlement Fund while held in escrow (less
Notice and Administration Expenses paid, or incurred but not paid), plus any amount then
remaining in the Notice and Administration Account, including both interest paid and accrued
(less expenses and costs which have not yet been paid but which are properly chargeable to the
Notice and Administration Account), shall be refunded by the Escrow Agent to Liberty Silver
24
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 32 of 121
Defendants and/or their respective insurers in accordance with the amounts contributed by each
such Person pursuant to Section 11(A) of this Stipulation. The Escrow Agent shall make the
refund described in the preceding sentence within ten (10) business days of such cancellation or
termination.
E. Upon the occurrence of all of the events specified in paragraph A of this Section,
the obligation of the Escrow Agent to return funds from the Settlement Fund to Liberty Silver
Defendants and/or their respective insurers pursuant to paragraph D of this Section, shall be
absolutely and forever extinguished.
F. If either (a) the Effective Date does not occur, (b) this Stipulation is canceled or
terminated pursuant to its terms, or (c) this Stipulation does not become final for any reason, all
of the parties to this Stipulation shall be deemed to have reverted to their respective status prior
to the execution of this Stipulation, and they shall proceed in all respects as if this Stipulation had
not been executed and the related orders had not been entered, preserving in that event all of their
respective claims and defenses in the Action. Notwithstanding the foregoing language, the
following provisions of this Stipulation shall survive any termination or cancellation of the
Settlement: this Section Xi(F); Section XT(D) ("Conditions of Settlement, Effect of Disapproval
Cancellation or Termination"); Section Xli ("No Admissions"); and, to the extent applicable,
Section XIII (Miscellaneous Provisions).
G. Liberty Silver shall have options to terminate the settlement in its entirety in the
event that purchasers who collectively purchased more than a certain amount of Liberty Silver
Common Stock choose to exclude themselves from the Settlement Class, as set forth in a
separate confidential agreement (the "Supplemental Agreement") executed among the Parties,
XII. NO ADMISSIONS
25
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 33 of 121
A. The parties hereto intend the Settlement as described herein to be a final and
complete resolution of all disputes between them with respect to the Action and to compromise
claims that are contested and entry in this Settlement shall not be deemed an admission by any
Defendant as to the merits of any claim or defense or any allegation made in the Action.
B. Neither this Stipulation nor the Settlement, nor any act performed or document
executed pursuant to or in furtherance of this Stipulation or the Settlement: (a) is or may be
deemed to be or may be used as an admission of, or evidence of the validity of any Released
Claim, of any allegation made in the Action, or of any wrongdoing or liability of any of the
Released Parties; or (b) is or may be deemed to be or may be used as an admission of, or
evidence of any liability, fault or omission of any of the Released Parties in any civil, criminal or
administrative proceeding in any court, administrative agency or other tribunal. Neither this
Stipulation nor the Settlement, nor any act performed or document executed pursuant to or in
furtherance of this Stipulation or the Settlement shall be admissible in any proceeding for any
purpose, except to enforce the terms of the Settlement, and except that any of the Released
Parties may file this Stipulation and/or the Final Judgment in any action that may be brought
against any of them in order to support a defense or counterclaim based on principles of res
judicata, collateral estoppel, release, good faith settlement, judgment bar or reduction or any
other theory of claim preclusion or issue preclusion or similar defense or counterclaim.
XIII. MISCELLANEOUS PROVISIONS
A. The parties hereto: (a) acknowledge that it is their intent to consummate the
Settlement contemplated by this Stipulation; (b) agree to cooperate to the extent necessary,
consistent with the terms described herein, to effectuate and implement all terms and conditions
of this Stipulation; and (c) agree to exercise their best efforts and to act in good faith, consistent
26
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 34 of 121
with the terms described herein, to accomplish the foregoing terms and conditions of the
Stipulation.
B. All counsel who execute this Stipulation represent and warrant that they have
authority to do so on behalf of their respective clients.
C. All of the exhibits attached hereto are hereby incorporated by reference as though
fully set forth herein.
D. This Stipulation may be amended or modified only by a written instrument signed
by counsel for all parties hereto or their successors in interest.
F. This Stipulation, exhibits attached hereto, and the Supplemental Agreement
constitute the entire agreement between Lead Plaintiffs on the one hand, and the Liberty Silver
Defendants on the other hand, and supersede any and all prior agreements, written or oral,
between the Parties. No representations, warranties or inducements have been made concerning
this Stipulation or its exhibits other than the representations, warranties and covenants contained
and memorialized in such documents,
F. This Stipulation may be executed in one or more original, photocopied or
facsimile counterparts. All executed counterparts and each of them shall be deemed to be one
and the same instrument. Counsel for the parties hereto shall exchange among themselves
original signed counterparts and a complete set of original executed counterparts shall be filed
with the Court,
G. This Stipulation shall be binding upon, and inure to the benefit of the successors,
assigns, executors, administrators, affiliates (including parent companies), heirs and legal
representatives of the parties hereto. No assignment shall relieve any party hereto of obligations
hereunder.
27
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 35 of 121
H. All terms of this Stipulation and all exhibits hereto shall be governed and
interpreted according to the internal laws of the State of New York without regard to its rules of
conflicts of law and in accordance with the laws of the United States.
I. The Liberty Silver Defendants, Lead Plaintiffs, and each member of the
Settlement Class hereby irrevocably submit to the jurisdiction of the Court with respect to
enforcement of the terms of this Stipulation and for any suit, action, proceeding or dispute
arising out of or relating to this Stipulation or the applicability of this Stipulation.
J. The parties to this Stipulation intend the Settlement to be a final and complete
resolution of all disputes asserted or which could be asserted by the Settlement Class Members
against the Released Parties with respect to the Released Claims, Accordingly, Lead Plaintiffs
and Liberty Silver Defendants agree not to assert in any forum that the litigation was brought by
Lead Plaintiffs or their counsel, or defended by the Liberty Silver Defendants, or their counsel, in
bad faith or without a reasonable basis. The parties hereto shall assert no claims of any violation
of Rule 11 of the Federal Rules of Civil Procedure relating to the prosecution, defense, or
settlement of the Action, The Parties agree that the amount paid and the other terms of the
Settlement were negotiated at arm's-length in good faith by the Parties, and reflect a settlement
that was reached voluntarily after consultation with experienced legal counsel
K. This Stipulation, offer of this Stipulation and compliance with this Stipulation
shall not constitute or be construed as an admission by any of the Released Parties of any
wrongdoing or liability. This Stipulation is to be construed solely as a reflection of the desire of
the parties hereto to facilitate a resolution of the claims in the Action and of the Released Claims.
The parties hereto agree that no party was or is a "prevailing party" in this case. In no event
shall this Stipulation, any of its provisions, or any negotiations, statements or court proceedings
28
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 36 of 121
relating to its provisions in any way be construed as, offered as, received as, used as or deemed
to be evidence of any kind in the Action, any other action, or any judicial (whether civil or
criminal), administrative, regulatory or other proceeding, except a proceeding to enforce this
Stipulation.
L. This Stipulation shall not be construed more strictly against one party than
another merely by virtue of the fact that it, or any part of it, may have been prepared by counsel
for one of the Parties, it being recognized that this Stipulation is the result of arm's-length
negotiations between the Parties and all Parties have contributed substantially and materially to
its preparation.
N. Except as otherwise provided herein, each party shall bear its own fees and costs.
a The headings herein are used for the purpose of convenience and are not intended
to have legal effect.
F Notices required or permitted by this Stipulation shall be submitted either by
overnight mail or in person as follows:
Notice to Lead Plaintiffs:
William B. Federman FEDERMAN & SHERWOOD 10205 North Pennsylvania Avenue Oklahoma City, OK 73120 Telephone: (405) 235-1560 Facsimile: (405) 239-2112 [email protected]
Notice to the Liberty Silver and Geoffrey Browne:
Michelle A. Reed AKIN GIJMP STRAUSS HAUER & FELD LLP 1700 Pacific Avenue, Suite 4L00 Dallas, Texas 75201 Telephone: 214- 969-2800 Facsimile: 214-969-4343
Notice to William Tafuri:
Guy Petrillo (pro hac vice) 655 Third Avenue, 22 Floor New York, New York Telephone: (212)370-0331
29
Case 9:13-cv-80923-KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 37 of 121
Facsimile: (212) 370-0391 Email: gpetrillopkbllp.com
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound February
2015.
FEDERMAN & SHERWO9-
tt / ,,2William B. Fed(rman
10205 N. Pennsylvania Avenue Oklahoma City, OK 73120 Telephone: (405) 235-1560 Facsimile: (405) 239-2112 Email: [email protected]
Lead Counselfor Plaintiffs
The PGD LAW FIRM LLC
Patrick Dempsey Florida Bar No. 27676 THE POD LAW FIRM LLC Southeast Financial Center, Suite 2790 200 South Biscayne Boulevard Miami, Florida 33131 Telephone: (305) 549-8601 Facsimile: (305) 440-4051 Email: dempseypgdlawifiim.com
PETRILLO KLEIN & BOXER
Counsel for Liberty Silver, Geoffrey Browne, and William Tafuri
AKIN GUMP STRAUSS HAUER & FELD
Michelle A. Reed (pro hac vice) 1700 Pacific Avenue, Suite 4100 Dallas, Texas 75201-4624 Telephone: (214) 969-2800 Facsimile: (214) 969-4343 Email: mreedakingump.com
Douglass Maynard (pro hac vice) Jennifer C. Hildebrand (pro hac vice) One Bryant Park New York, NY 10036 Telephone: (212) 872-1028 Facsimile: (212) 872-1002 Email: rhotzakingump.com Email: jhildebrandalcingump.com
Counsel for Liberty Silver and Geoffrey Browne
Guy Petrillo (pro hac vice) 655 Third Avenue, 22" Floor New York, New York Telephone: (212) 370-0331 Facsimile: (212) 370-0391 Email: gpetri1lopkb1lp.com
Counsel for William Tafuri
30
Case 9:13cv-80923KLR Document 1334 Entered on FLSD Docket 02/2712015 Page 38 of 121
iK\;.\c'i1! i\'.(....)
•
HHC
\tr. •L,ltL (;v.c.
1: , .... • ;)][ ...
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 39 of 121
I .. }cl' if! 'I1Ij•i LL' ]1:fliI]\ !tiuI
(iU :H1FHN) i;i .
kin] Ac:nIc. 22ool
Ncn York. '½ York ICLL]Ylt)IIL. *. N'.)
Y1(1.uC)j
/t[//(IfjIj IciJnri
INjrrk
FiriJn Br No. 2.676
IUL IiF) T,.'\o I]]&MLI,( 1190
Now] 10 I cLWLO.IW
hdjw,'L
< mLr woe H ieI\01tr112 corn
( ,Y;iIfr/ /hr ///.wj . irNf./ i•r... e,co / ..Norl I?j.ownë, and ill/i:
AKIN (II NW N] N: 1A], 1H H
1) 1, \ 1
1700 loewIit: AvcI tc. ciIo 100
0Ici)I101itO II -.2201]
2./IN)
III ;It: ;1lE:eikilrulp.co;Tl
PcILIoLls-. • :1:vt.rirt/ iwo
.jcr]IE!iL r .
IL)
]i)]ii]:]l]i]LII':)l)iiItl(.)]])l;I:' ']i'l])'t'.ifl
/011 ..No'irl'i/rci' ueic/ Geoffrey I'
I.I)IHLN1.\ N N 1111 ()OD
WiIlHotLLir.L;'Lro
OkH}uir; Yitv, U]H/3] i,4(1Y) :Hy IYC;i,)
•'. hiNr Icck' LII
Lea / ( () 2r1<y/ !)' P/,/;'i;///
30
Case 9:13-cv-80923-KLR Document 133-1 Entered on FLSD Docket 02/27/2015 Page 40 of 121
Facsimile: (212) 370-0391 Email: [email protected]
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound February
_,2015.
FEDERMAN & SHERWOOD
The PGD LAW FIRM LLC
William B. Federman
Patrick Dempsey 10205 N. Pennsylvania Avenue Florida Bar No. 27676 Oklahoma City, OK 73120
THE PGD LAW FIRM LLC
Telephone: (405) 235-1560
Southeast Financial Center, Suite 2790 Facsimile: (405) 239-2112
200 South Biscayne Boulevard
Email: [email protected]
Miami, Florida 33131 Telephone: (305) 549-8601
Lead Counsel for Plaintiffs Facsimile: (305) 440-4051
Email: [email protected]
Counsel for Liberty Silver; Geoffrey Browne, and William Tafuri
U4114-1 P014fl41flhI•x4E1 AKIN GUMP STRAUSS HAUER & FEL
,___ Miclle A. Reed (pro hac vice 1700 Pacific Avenue, Suite 4100 Dallas, Texas 75201-4624 Telephone: (214) 969-2800 Facsimile: (214) 969-4343 Email: [email protected]
Douglass Maynard (pro hac vice) Jennifer C. Hildebrand (pro hac vice) One Bryant Park New York, NY 10036 Telephone: (212) 872-1028 Facsimile: (212) 872-1002 Email: [email protected] Email: [email protected]
Counsel for Liberty Silver and Geoffrey Browne
Guy Petrillo (pro hac vice) 655 Third Avenue, 22nd Floor New York, New York Telephone: (212) 370-0331 Facsimile: (212) 370-0391 Email: [email protected]
Counsel for William Tafuri
30
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 41 of 121
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA
TODD STANAFORD a/k/a JERALD TODD STANAFORD, on behalf of himself and all others similarly situated, Case No. 9:13-cv-80923 (KLR)
Plaintiffs,
vs.
ROBERT DONALD BRUCE GENOVESE, WILLIAM TAFURI, GEOFFREY BROWNE, BG CAPITAL GROUP LTD, LOOK BACK INVESTMENTS, INC., OUTLOOK INVESTMENTS, INC., AND LIBERTY SILVER CORPORATION,
Defendants.
[PROPOSED] ORDER PRELIMINARILY APPROVING SETTLEMENT AND PROVIDING FOR NOTICE
EXHIBIT A
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 42 of 121
WHEREAS, an action is pending before this Court styled Todd Stanaford v. RobertDonald
Bruce Genovese, et al., No. 4:13-cv-80923 (the "Action");
WHEREAS, the Parties having made application, pursuant to Federal Rule of Civil
Procedure 23(e), for an order preliminarily approving the partial settlement of this Action, in
accordance with a Stipulation of Settlement dated as of February 20, 2015 (the "Stipulation"),
which, together with the exhibits annexed thereto, set forth the terms and conditions for the
proposed Settlement of this Action and for dismissal of this Action with prejudice against
Defendants Liberty Silver Corporation, Geoffrey Browne, and William Tafuri upon the terms and
conditions set forth therein; and the Court having read and considered the Stipulation and the
exhibits annexed thereto; and
WHEREAS, all defined terms herein have the same meanings as set forth in the Stipulation
unless otherwise defined.
NOW, THEREFORE, IT IS HEREBY ORDERED:
1. The Court does hereby preliminarily approve the Stipulation and the Settlement set
forth therein, subject to further consideration at the Final Approval Hearing described below.
2. A hearing (the "Final Approval Hearing") shall be held before the Court on
2015, at _.m., at the Paul G. Rogers Federal Building and United States
Courthouse, 701 Clematis Street, West Palm Beach, FL 33401, Courtroom 1, to determine whether
the proposed Settlement of the Action on the terms and conditions provided for in the Stipulation
is fair, reasonable, and adequate to the Settlement Class and should be approved by the Court;
whether a Final Judgment and Dismissal as to the claims against Liberty Silver Corporation,
Geoffrey Browne, and William Tafuri (the "Liberty Silver Defendants"), as provided in Section
1
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 43 of 121
l.A ¶9 of the Stipulation, should be entered herein; to determine whether the proposed Plan of
Allocation should be approved; and to determine the amount of attorneys' fees and expenses that
should be awarded to Lead Counsel and the amount, if any, of reimbursement awards to be made
to Lead Plaintiffs. The Court may adjourn the Final Approval Hearing without further notice to
Members of the Settlement Class.
3. Pursuant to 15 U.S.C. § 78u-4(a)(3)(B)(iii), the Court conditionally appoints, for
purposes of effectuating the Settlement, Lead Plaintiffs Todd Stanaford and Philip Hobley as class
representatives.
4. Pursuant to Rule 23 of the Federal Rules of Civil Procedure, the Court conditionally
certifies, for purposes of effectuating the Settlement, a Class of all Persons who purchased or
otherwise acquired the publicly traded securities of Liberty Silver Corporation (OTC: LBSV)
("Liberty Silver" or the "Company") during the period February 10, 2010 through October 5, 2012,
inclusive (the "Settlement Class Period"), and were damaged thereby. Excluded from the
Settlement Class are each of the Defendants; any parent or subsidiary, present or former director,
officer, or subsidiary of any of the Defendants; any entity in which any Defendant respectively has
a controlling interest; Defendants' respective legal representatives, heirs, successors and assigns;
and any immediate family member of an individual defendant. Also excluded from the Settlement
Class are those Persons who request exclusion from the Settlement Class in such form and manner,
and within such time, as the Court shall prescribe.
5. With respect to the Settlement Class, the Court preliminarily finds for purposes of
effectuating the Settlement that: (a) the members of the Settlement Class are so numerous that
joinder of all Settlement Class Members in the Action is impracticable; (b) there are questions of
2
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 44 of 121
law and fact common to the Settlement Class which predominate over any individual questions;
(c) the claims of the Lead Plaintiffs are typical of the claims of the Settlement Class; (d) the Lead
Plaintiffs and Lead Counsel have fairly and adequately represented and protected the interests of
all the Settlement Class Members; and (e) a class action is superior to other available methods for
the fair and efficient adjudication of the controversy, considering: (i) the interests of the Members
of the Settlement Class in individually controlling the prosecution of separate actions; (ii) the
extent and nature of any litigation concerning the controversy already commenced by Members of
the Settlement Class; (iii) the desirability or undesirability of concentrating the litigation of these
claims in this particular forum; and (iv) the difficulties likely to be encountered in the management
of the class action.
6. The Court approves, as to form and content, the Notice of Pendency and Proposed
Settlement of Class Action (the "Notice"), the Proof of Claim and Release form (the "Proof of
Claim"), and Summary Notice ("Summary Notice") annexed as Exhibits A- 1, A-2, and A-3 hereto,
and finds that the mailing and distribution of the Notice and publishing of the Summary Notice
substantially in the manner and form set forth in ¶J7-8 of this Order meet the requirements of
Federal Rule of Civil Procedure 23, the Private Securities Litigation Reform Act of 1995 and due
process, and is the best notice practicable under the circumstances and shall constitute due and
sufficient notice to all Persons entitled thereto.
7. Pursuant to Rule 53(c) of the Federal Rules of Civil Procedure, the Court appoints
Heffler Claims Group ("Claims Administrator") to supervise and administer the notice procedure
as well as the processing of claims as more fully set forth below:
3
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 45 of 121
(a) Not later than seven (7) calendar days after the date of this order (the
"Notice Date"), Liberty Silver shall provide the Claims Administrator with an electronic and
searchable list of Liberty Silver's registered shareholders, as appropriate for providing notice to
those shareholders.
(b) Not later than fifteen (15) calendar days after the date of this order, the
Claims Administrator shall cause a copy of the Notice and the Proof of Claim, substantially in the
forms annexed as Exhibits A-i and A-2 hereto, to be mailed by First-Class Mail to all Settlement
Class Members who can be identified with reasonable effort;
(c) Not later than twenty (20) calendar days after the date of this order, the
Claims Administrator shall cause the Summary Notice to be published once in the national, news-
oriented business publication Investor's Business Daily and once electronically over PR Newswire;
(d) Not later than twenty (20) calendar days after the date of this order, the
Claims Administrator shall cause the Stipulation and its Exhibits to be posted on the following
website: wwwLibcrtySilverSetticrnentcorn; and
(e) On or before seven (7) calendar days prior to the Final Approval Hearing,
Lead Counsel shall cause to be served on Defendants' Counsel and filed with the Court proof, by
affidavit or declaration, of such mailing, publishing, and posting.
8. Nominees who held Liberty Silver common stock purchased during the period
February 10, 2010 through October 5, 2012, inclusive, for the beneficial ownership of another
Person, shall send the Notice and the Proof of Claim to such beneficial owners of such Liberty
Silver common stock within ten (10) calendar days after receipt thereof, or send a list of the names
and addresses of such beneficial owners to the Claims Administrator within ten (10) calendar days
4
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 46 of 121
of receipt thereof, in which event the Claims Administrator shall promptly mail the Notice and the
Proof of Claim to such beneficial owners. The Claims Administrator shall, if requested, reimburse
from the Settlement Fund banks, brokerage houses or other nominees solely for their reasonable
out-of-pocket expenses incurred in providing notice to beneficial owners who are Settlement Class
Members, which expenses would not have been incurred except for the sending of such notice,
subject to further order of the Court with respect to any dispute concerning such compensation.
Nominees who do not intend to comply with the provisions of this paragraph shall be requested to
notify the Claims Administrator of that fact.
9. All fees, costs, and expenses incurred in identifying and notifying Members of the
Settlement Class shall be paid from the Settlement Fund and in no event shall Defendants or the
D&O Insurer bear any responsibility for such fees, costs, or expenses, except as provided in
Section IV.A of the Stipulation.
10. All Members of the Settlement Class shall be bound by all determinations and
judgments in the Action concerning the Settlement, whether favorable or unfavorable to the
Settlement Class.
11. Settlement Class Members who wish to participate in the Settlement shall complete
and submit Proofs of Claim in accordance with the instructions contained therein. Unless the Court
orders otherwise, all Proofs of Claim must be postmarked no later than 90 (ninety) calendar days
after Notice is sent to prospective Settlement Class Members. Any Class Member who does not
timely submit a Proof of Claim within the time provided for shall be barred from sharing in the
distribution of the proceeds of the Net Settlement Fund, unless otherwise ordered by the Court or
5
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 47 of 121
allowed by the Stipulation, but shall nevertheless be bound by the Final Judgment and Dismissal
with Prejudice.
12. Any Person who desires to request exclusion from the Settlement Class shall do so
within the time set forth and in the manner described in the Notice. All requests for exclusions
must be postmarked no later than twenty-one (21) calendar days prior to the Final Approval
Hearing. Upon receiving any request(s) for exclusion, the Claims Administrator shall promptly
notify Lead Counsel and Defendants' Counsel of such request(s) and provide them copies of such
request(s) and documentation accompanying them by facsimile or electronic mail.
13. All Persons who submit valid and timely requests for exclusion in the manner set
forth in the Notice shall have no rights under the Stipulation, shall not share in the distribution of
the Net Settlement Fund, and shall not be bound by the Stipulation or the Final Judgment and
Dismissal with Prejudice entered in the Action.
14. Any Member of the Settlement Class may enter an appearance in the Action, at his,
her or its own expense, individually or through counsel of his, her or its choice. If he, she or it
does not enter an appearance, he, she or it will be represented by Lead Counsel.
15. Any Settlement Class Member may appear and show cause, if he, she or it has any
reason why the proposed Settlement of the Action should or should not be approved as fair,
reasonable, and adequate, why the Final Judgment and Dismissal as to the Liberty Silver
Defendants should or should not be entered thereon, why the Plan of Allocation should or should
not be approved, or why attorneys' fees and expenses should or should not be awarded to Lead
Counsel or why reimbursement awards should not be made to Lead Plaintiffs; provided, however,
that no Settlement Class Member or any other Person shall be heard or entitled to contest the
6
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 48 of 121
approval of the terms and conditions of the proposed Settlement, or, if approved, the Final
Judgment and Dismissal to be entered thereon approving the same, or the order approving the Plan
of Allocation, or the attorneys' fees and expenses to be awarded to Lead Counsel or the
reimbursement awards to Lead Plaintiffs, unless that Person has filed said objections, papers, and
briefs with the Clerk of the United States District Court for the Southern District of Florida no later
than twenty-one (21) calendar days prior to the Final Approval Hearing, and delivered copies of
any such papers to Federman & Sherwood, Attn: William B. Federman, 10205 N. Pennsylvania
Avenue, Oklahoma City, OK 73120 and Akin Gump Strauss Hauer & Feld, Attn: Michelle A.
Reed, 1700 Pacific Avenue, Suite 4100, Dallas, Texas, 75201, such that they are received on or
before the same date. Any Settlement Class Member who does not make his, her or its objection
in the manner provided shall be deemed to have waived such objection and shall forever be
foreclosed from making any objection to the fairness or adequacy of the proposed Settlement as
set forth in the Stipulation, to the Plan of Allocation, or to the award of attorneys' fees and expenses
to Lead Counsel or the reimbursement awards to Lead Plaintiffs, unless otherwise ordered by the
Court.
16. All funds held by the Escrow Agent shall be deemed and considered to be in the
custody of the Court, and shall remain subject to the jurisdiction of the Court, until such time as
such funds shall be distributed pursuant to the Stipulation and/or further order(s) of the Court.
17. All papers in support of the Settlement, the Plan of Allocation, and the application
for attorneys' fees or expenses shall be filed and served no later than thirty (30) calendar days prior
to the Final Approval Hearing. If reply papers are necessary, they shall be filed and served no
later than seven (7) calendar days prior to the Final Approval Hearing.
7
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 49 of 121
18. Neither the Liberty Silver Defendants nor the Released Parties shall have any
responsibility for, or liability with respect to, the Plan of Allocation or any application for
attorneys' fees or expenses or requests for reimbursement awards to Lead Plaintiffs submitted by
Lead Counsel, and such matters will be considered separately from the fairness, reasonableness,
and adequacy of the Settlement.
19. At or after the Final Approval Hearing, the Court shall determine whether the Plan
of Allocation proposed by Lead Counsel and any application for attorneys' fees or expenses, or
reimbursement awards to Lead Plaintiffs, shall be approved.
20. All reasonable expenses incurred in identifying and notifying Settlement Class
Members, as well as administering the Settlement Fund, shall be paid as set forth in the Stipulation.
In the event the Settlement is not approved by the Court, or otherwise fails to become effective,
neither Plaintiffs nor Lead Counsel shall have any obligation to repay any amounts actually and
properly disbursed from the Settlement Fund, as provided in the Stipulation.
21. Neither the Stipulation, nor any of its terms or provisions, nor any of the
negotiations or proceedings connected with it, shall be construed as an admission or concession
by any of the Liberty Silver Defendants or the Released Parties of the truth of any of the allegations
in the Action, or of any liability, fault, or wrongdoing of any kind and shall not be construed as, or
deemed to be evidence of, or an admission or concession that Plaintiffs or any Settlement Class
Members have suffered any damages, harm or loss.
22. Pending final determination of whether the Settlement should be approved, none of
Plaintiffs or Settlement Class Members, or anyone who acts or purports to act on their behalf, shall
E1
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 50 of 121
institute, commence or prosecute any action that asserts Released Claims against the Liberty Silver
Defendants or the Released Parties.
23. In the event that the Settlement does not become effective in accordance with the
terms of the Stipulation or the Effective Date does not occur, or in the event that the Settlement
Fund, or any portion thereof, is returned pursuant to the terms of the Stipulation, then this Order
shall be rendered null and void to the extent provided by and in accordance with the Stipulation
and shall be vacated and, in such event, all orders entered and releases delivered in connection
herewith shall be null and void to the extent provided by and in accordance with the Stipulation.
24. The Court reserves the right to adjourn the date of the Final Approval Hearing
without further notice to the Members of the Settlement Class, and retains jurisdiction to consider
all further applications arising out of or connected with the proposed Settlement. The Court may
approve the Settlement, with such modifications as may be agreed to by the Parties, if appropriate,
without further notice to the Settlement Class.
IT IS SO ORDERED.
DATED: THE HONORABLE KENNETH L. RYSKAMP UNITED STATES DISTRICT JUDGE
9
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 51 of 121
EXHIBIT A-i UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA
TODD STANAFORD a/k/a JERALD TODD STANAFORD, on behalf of himself and all others similarly situated,
Plaintiffs, vs.
ROBERT DONALD BRUCE GENOVESE, WILLIAM TAFURI, GEOFFREY BROWNE, BG CAPITAL GROUP LTD, LOOK BACK INVESTMENTS, INC., OUTLOOK INVESTMENTS, INC., AND LIBERTY SILVER CORPORATION,
Defendants.
Case No. 9:13-cv-80923 (KLR)
NOTICE OF PENDENCY AND PROPOSED PARTIAL SETTLEMENT OF CLASS ACTION
If you purchased or otherwise acquired the common stock of Liberty Silver Corporation (OTC: LBSV) during the period from February 10, 2010 through October 5, 2012, inclusive, you could get a payment from a class action settlement.
A Federal Court Authorized This Notice. This is not a solicitation from a lawyer.
Notice of Partial Settlement: Please also be advised that the Court-appointed Lead Plaintiffs, Todd Stanaford and Philip Hobley, on behalf of themselves and the Settlement Class (defined in paragraph 4 below), have reached a proposed partial settlement of the Action with Defendants Liberty Silver Corporation ("Liberty Silver"), Geoffrey Browne, and William Tafuri (the "Liberty Silver Defendants") in the amount of $1 million in cash, plus any interest earned (the "Settlement"). Defendants Robert Donald Bruce Genovese, BG Capital Group Ltd, Look Back Investments, Inc., and Outlook Investments Inc. (the "BG Defendants") who are also named as defendants in this Action, are not parties to this Settlement. The litigation is continuing against the BG Defendants regardless of whether the proposed partial settlement is approved, however, there is no guarantee of an additional settlement or distribution.
Security and Time Period: Liberty Silver Corporation (OTC: LBSV) common stock ("Stock") purchased or acquired from February 10, 2010 through October 5, 2012, inclusive (the "Settlement Class Period").
• Settlement Fund: The Settlement Fund consists of $1 million plus interest earned. Your recovery will depend on the number of shares of Liberty Silver Stock that you purchased or otherwise acquired, the number of those share you sold, and the timing of those transactions. It will also depend on the number of valid claim forms that members of the Settlement Class submit and the amount of such claims. Plaintiffs' expert estimates the total net number of Liberty Silver shares damaged is no greater than 15.187 million shares. Assuming that all of
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 52 of 121
the investors who purchased or otherwise acquired Liberty Silver Stock during the Settlement Class Period and were damaged thereby participate in the Settlement, Lead Counsel estimates that the estimated average distribution will be approximately $0066 per damaged share of Liberty Silver Stock before the deduction of Court-approved awards, fees and Litigation Expenses, as described below, and the cost of notice and claims administration. Please note, this is a partial settlement of the Action, and Settlement Class Members may be entitled to additional recovery amounts in the event of recoveries from some or all of the BO Defendants.
• Litigation Fees and Expenses Sought: Lead Counsel have been prosecuting this Action on a wholly contingent basis since its inception in 2013, have not received any payment of attorneys' fees for their representation of the Class and they have advanced the funds to pay expenses necessarily incurred to prosecute the Action. Lead Counsel will apply to the Court for an award of attorneys' fees for Lead Counsel in an amount no greater than 30% of the Settlement Fund and for reimbursement of Litigation Expenses incurred in connection with the prosecution and resolution of the claims against the Liberty Silver Defendants, in an amount not to exceed $65,000. Lead Counsel will also apply to the Court for reimbursement awards for Lead Plaintiffs, who have overseen the litigation on behalf of all Settlement Class Members, in the amount of $1,000 each (the "Reimbursement Awards"). Any fees and expenses, or any Reimbursement Awards, awarded by the Court will be paid from the Settlement Fund. Settlement Class Members are not personally liable for any such fees, expenses or Reimbursement Awards. if the Settlement is approved, and Lead Counsel's application for attorneys' fees and expenses and for Reimbursement Awards to Lead Plaintiffs is granted, the average cost of these fees, expenses, and awards will be approximately $0024 per share of Liberty Silver Stock. After deduction of the requested attorneys' fees, expenses, and Reimbursement Awards, the approximate recovery is an average of $0042 per damaged share of Liberty Silver stock.
• Reasons for the Settlement: The Settlement resolves claims against the Liberty Silver Defendants in this Action for alleged violations of the federal securities laws that have been pending since 2013. The Liberty Silver Defendants deny all allegations of wrongdoing. The Settlement provides the Settlement Class with a substantial benefit now (namely $1 million, plus interest), as compared to the risk that a smaller or no recovery would be achieved after engaging in years of further litigation - including contested motions, trial, and likely appeals, in which the Liberty Silver Defendants would have the opportunity to assert defenses to the claims asserted against them. The Settlement further allows Lead Plaintiffs and Lead Counsel to focus on litigating the claims against the remaining BO Defendants who are not a part of this Settlement. In light of the amount of the Settlement, the immediacy of recovery to the Settlement Class Members, and the preservation of claims against the BO Defendants, Lead Plaintiffs believe that the proposed Settlement is fair, reasonable and adequate, and in the best interests of the Settlement Class.
Page 2
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 53 of 121
YOUR LEGAL RIGHTS AND OPTIONS IN THIS SETTLEMENT
SUBMIT A CLAIM FORM The only way to get a payment. NO LATER THAN
EXCLUDE YOURSELF Get no payment. This is the only option that allows NO LATER THAN you to be part of any other lawsuit against Defendants
-, 2015 about the legal claims in this case. OBJECT NO LATER THAN Write to the Court about why you do not like the
-, 2015 Settlement.
GO TO A HEARING ON Speak in Court about the fairness of the Settlement. ,2015
DO NOTHING Get no payment. Give up rights.
WHAT THIS NOTICE CONTAINS
Why Did I Get This Notice? What Is The Case About? Why Is This A Class Action? How Do I Know If Am Affected By The Settlement? Why Is There A Settlement? How Much Will My Payment Be? What Is The Plan Of Allocation? How Do I Participate In The Settlement? What Do I Need To Do? How Do I Tell The Court That I Don't Like The Settlement? What Rights Am I Giving Up By Remaining In The Class? What If Do Not Want To Participate In The Settlement? How Do I Exclude Myself? Do I Have A Lawyer In This Case? How Will The Lawyers In This Case Be Paid? When And Where Will the Court Decide Whether To Approve The Settlement? Do I Have To Come To The Hearing? What Happens If Do Nothing At All? How Can I Get More Information?
Page - Page - Page - Page - Page - Page - Page - Page - Page - Page - Page - Page - Page - Page - Page - Page -
\N 11V DID 1 (;l:I [Ills NOIl(F?
1. This Notice is being sent to you pursuant to an Order of the United States District Court for the Southern District of Florida because you or someone in your family may have purchased or otherwise acquired Liberty Silver Stock during the Settlement Class Period.
\\II .\I 1SF lIE ('SF IM)tF?
2. The Action is a class action alleging that Defendants violaicd Scctions 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act") by participating in a scheme to manipulate the price of Liberty Silver's stock, which included issuing materially false or
Page 3
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 54 of 121
misleading statements to the public during the Settlement Class Period. Lead Plaintiffs allege that as a result of the allegedly improper conduct, the market price of Liberty Silver's stock was artificially inflated, and that the Settlement Class Members overpaid for Liberty Silver Stock purchased during the Settlement Class Period. Lead Plaintiffs and the Liberty Silver Defendants disagree on liability and damages. The Liberty Silver Defendants deny that they can be held liable under the federal securities laws. The Settlement resolves all claims against the Liberty Silver Defendants, while preserving claims against the BO Defendants.
NN Ily 1St IllS .'. (ISS .( "lION?
3. Class actions are generally used in lawsuits that affect a large number of individuals; in effect, the class action operates to consolidate into a single action all of the claims of individuals allegedly harmed by the same conduct or course of conduct, thus alleviating the need for members of the class to file their own individual lawsuits to recover for the harm alleged. One court resolves all of the issues for all class members, except for those class members who exclude themselves from the class. Judge Kenneth L. Ryskamp presides over this class action.
IIO\\ l)() I IC\O\\ II' I .\\I .IIl: (IEl) l\ 11111,1 sl:IIIl:\lF\I?
4. The Settlement Class consists of all persons and/or entities who purchased or otherwise acquired common stock in Liberty Silver Corporation (OTC: LBSV) during the Settlement Class Period from February 10, 2010 through October 5, 2012, inclusive, and were damaged thereby. Excluded from the Settlement Class are: (a) Defendants; any parent or subsidiary, present or former director, officer, or subsidiary of any of the Defendants; any entity in which any Defendant respectively has a controlling interest; Defendants' respective legal representatives, heirs, successors and assigns; and any immediate family member of an individual defendant; and (b) any putative members of the Settlement Class who timely and validly exclude themselves from the Settlement Class.
\\II\ Is! IIFItE A SFII'Lll.\IE\I?
5. The Court did not decide in favor of Lead Plaintiffs or the Liberty Silver Defendants. Instead, both sides agreed to a Settlement. The Lead Plaintiffs and Class Counsel believe the Settlement is best for all Settlement Class Members because of the risks associated with continued litigation against the Liberty Silver Defendants and the nature of the defenses raised by the Liberty Defendants.' The Settlement provides the Settlement Class with a substantial
Before agreeing to the Settlement, Lead Counsel conducted an extensive investigation into the events and transactions underlying the claims alleged in the Action, conducted detailed interviews of individuals with relevant information, reviewed tens of thousands of documents obtained through Lead Counsel's investigation, consulted with damages experts, and researched the applicable law with respect to the claims of Lead Plaintiffs and the Settlement Class against Defendants, including the Liberty Silver Defendants, and the potential defenses thereto. At the time the agreement to settle with the Liberty Silver Defendants was reached, Lead Counsel had an understanding of the strengths and weaknesses of Lead Plaintiffs' and the Liberty Silver Defendants' positions based on their investigation, the briefing of a motion to dismiss filed by the Liberty Silver Defendants, and the preparation of a mediation statement.
Page 4
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 55 of 121
benefit now, as compared to the risk that a smaller or no recovery would be achieved after engaging in years of further litigation - including contested motions, trial, and likely appeals, in which the Liberty Silver Defendants would have the opportunity to assert defenses to the claims asserted against them. The Settlement also allows Lead Plaintiffs and Lead Counsel to focus on litigating the claims against the remaining BO Defendants who are not a part of this Settlement. In light of the amount of the Settlement, the immediacy of recovery to the Settlement Class Members, and the preservation of claims against the BO Defendants, Lead Plaintiffs believe that the proposed Settlement is fair, reasonable and adequate, and in the best interests of the Settlement Class.
IR)NN \It( II \\II!I, \1\ P)\1I\I HF? \\II\I II lIE PLAN ( )F IU )( \IION?
6. The proposed Settlement calls for Defendants to create a Settlement Fund (the "Settlement Fund") in the amount of $1,000,000. The Settlement will not become effective unless it receives final approved by the Court.
7. The Jollowing Plan ol Allocation is designed to fairly allocate the proceeds of the Settlement Fund, less all taxes, approved attorneys' fees, litigation expenses, the cost of Notice and Administration, and Reimbursement Awards (the "Net Settlement Fund"), to the members of the Settlement Class who submit timely and valid Proofs of Claim ("Authorized Claimants"). The Claims Administrator shall determine each Authorized Claimant's pro rata share of the Net Settlement Fund based upon each Authorized Claimant's Recognized Claim. This Plan of Allocation schedule reflects the declines in the stock price of Liberty Silver during the Settlement Class Period that were found to he reasonably attributable to the manipulative conduct alleged in this Action.
THE PLAN OF ALLOCATION
8. Only shares purchased on a United States stock exchange or other United States market shall be eligible for damages.
9. Only shares that suffer a loss will be eligible for damages.
10. All sales on Canadian markets or markets other than a United States market will be converted to U.S. dollars at the end-of-the-day exchange rate on the date of sale.
11. For each share of Liberty Silver Corporation stock purchased on a United States stock exchange or other United States market in U.S. dollars and purchased during the period February 10, 2010 through October 5, 2012, inclusive and:
a) Sold at a loss prior to the trading halt at 9:30 AM, EDT on October 5, 2012: the Recognized Loss is 10% of the difference between the purchase price and the sales price per share.
b) Sold at a loss during the period beginning with the trading halt at 9:30 AM, EDT on October 5, 2012 and ending with the close of trading on January 2, 2013, the
Page 5
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 56 of 121
Recognized Loss is the lesser of i) the purchase price minus the sales price; or, ii) the difference between the purchase price and the PSLRA Average Price on the date of sale as appears in the Table below. 2
c) Held as of the close of trading on January 2, 2013: the Recognized Loss shall be the difference between the purchase price per share and the January 2, 2013 PSLRA average price of $0.68 per share, if greater than zero.
2 Pursuant to Section 21(D)(e)(1) of the Private Securities Litigation Reform Act of 1995 (15 U.S.C. § 78u- 4(e)(1)) (the "PSLRA"), "in any private action arising under this title in which the plaintiff seeks to establish damages by reference to the market price of a security, the award of damages to the plaintiff shall not exceed the difference between the purchase or sale price paid or received, as appropriate, by the plaintiff for the subject security and the mean trading price of that security during the 90-day period beginning on the date on which the information correcting the misstatement or omission that is the basis for the action is disseminated."
Pursuant to Section 21(D)(e)(2) of the PSLRA (15 U.S.C. § 78u-4(e)(2)), "if the plaintiff sells... the subject security prior to the expiration of the 90-day period described in paragraph (1), the plaintiffs damages shall not exceed the difference between the purchase or sale price paid or received, as appropriate, by the plaintiff for the security and the mean trading price of the security during the period beginning immediately after dissemination of information correcting the misstatement or omission and ending on the date on which the plaintiff sells or repurchases the security."
$0.68 was the reported average last price of Liberty Silver common stock on the US markets during the 90-day period beginning on October 5, 2012 and ending on January 2, 2013. (The SEC Division of Enforcement halted trading in Liberty Silver stock from October 5, 2012 through October 18, 2012. During that time period there was no U. S. reported last price. The PSLRA average for any share sold during this period is the price on the first day trading resumed: $0.15).
Page 6
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 57 of 121
PSLRA Mean Price
10/5/2012 10/8/2012 10/9/2012
10/10/2012 10/11/2012 10/12/2012 10/15/2012 10/16/2012 10/17/2012 10/18/2012 10/19/2012 10/22/2012 10/23/2012 10/24/2012 10/25/2012 10/26/2012 10/29/2012 10/30/2012 10/31/2012
11/1/2012 11/2/2012 11/5/2012 11/6/2012 11/7/2012 11/8/2012 11/9/2012
11/12/2012 11/13/2012 11/14/2012 11/15/2012 11/16/2012
$0.15 $0.15 $0.15 $0.15 $0.15 $0.15 $0.15 $0.15 $0.15 $0.15 $0.15 $0.50 $0.70 $0.79 $0.86 $0.93 $0.93 $0.93 $0.98 $1.00 $1.01 $1.02 $1.02 $1.02 $1.00 $0.97 $0.94 $0.92 $0.92 $0.91 $0.90
11/19/2012 11/20/2012 11/21/2012 11/23/2012 11/26/2012 11/27/2012 11/28/2012 11/29/2012 11/30/2012
12/3/2012 12/4/2012 12/5/2012 12/6/2012 12/7/2012
12/10/2012 12/11/2012 12/12/2012 12/13/2012 12/14/2012 12/17/2012 12/18/2012 12/19/2012 12/20/2012 12/21/2012 12/24/2012 12/26/2012 12/27/2012 12/28/2012 12/31/2012
1/2/2013
$0.88 $0.87 $0.87 $0.86 $0.85 $0.84 $0.83 $0.81 $0.80 $0.78 $0.77 $0.77 $0.76 $0.75 $0.74 $0.73 $0.72 $0.72 $0.72 $0.72 $0.71 $0.70 $0.70 $0.70 $0.69 $0.69 $0.69 $0.68 $0.68 $0.68
12. For all purposes, the transaction date and not the settlement date shall be used as the date for determining inflation per share, eligibility to file a claim, and the calculation of Recognized Losses. All purchases and sales of Liberty Silver common shares shall be accounted for and matched using the first-in-first-out (FIFO) method of accounting.
13. The Court has reserved jurisdiction to allow, disallow or adjust the Claim of any Settlement Class Member on equitable grounds. Each claimant shall be deemed to have submitted
Page 7
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 58 of 121
to the jurisdiction of the United States District Court for the Southern District of Florida with respect to his, her or its Claim Form.
14. Persons and entities that are excluded from the Settlement Class by definition or that exclude themselves from the Settlement Class will not be eligible to receive a distribution from the Net Settlement Fund and should not submit Claim Forms.
II 0\\ l)() I I&\ItII(IPAII1. IN I Jil L l. SEll F\IF\I? \\IIAI 1)0 I N ELl) 1'() 1)0?
15. To be eligible for a payment from the proceeds of the Settlement, you must be a member of the Settlement Class and you must timely complete and return the Claim Form with adequate supporting documentation postmarked no later than ,2015. A Claim Form is included with this Notice, or you may obtain one from the website maintained by the Claims Administrator for the Settlement, www.LibertvSilverSettlement.com , or you may request that a Claim Form be mailed to you by calling the Claims Administrator toll free at 1-844-777-8053. If you request exclusion from the Settlement Class or do not submit a timely and valid Claim Form, you will not be eligible to share in any of the Net Settlement Fund.
110\\ l)() 1 ILl!. FIlE ('011(1 TIIXF I DON't lIKE 11W LIIlL\lENI?
16. A Settlement Class Member (who does not request exclusion) may object to the Settlement, the proposed Plan of Allocation, Lead Counsel's request for Reimbursement Awards for Lead Plaintiffs, or Lead Counsel's request for an award of attorneys' fees and reimbursement of litigation expenses. Objections must be in writing and must include your name, address, telephone number, your signature, and documents sufficient to prove the number of shares of Liberty Silver Stock you purchased and sold during the Settlement Class Period, as well as the dates and prices of each such purchase and/or sale. Any objection must be mailed or delivered such that the papers are received by all of the following on or before ,2015.
Clerk's Office
United States District Court for the Southern District of Florida
Clerk of the Court 400 North Miami Ave.
8' Floor South Miami, FL 33128
Lead Counsel for Plaintiffs
William B. Federman, Esq. FEDERMAN & SHERWOOD 10205 N. Pennsylvania Avenue
Oklahoma City, Oklahoma 73120 Facsimile: (405) 239-2112
Counsel for Defendants
Michelle A. Reed, Esq. AKIN GLTMP STRAUSS HALTER
& FELD 1700 Pacific Avenue, Suite 4100
Dallas, Texas 75201 Facsimile: 214-969-4343
\VIl.\F RI(;1IF S .\\l I (;lVIN(; II' 1 f ltE\I.1N1NG tNt lIE ( !! S?
17. Unless you timely and validly exclude yourself, you are a Member of the Settlement Class, and that means that you will not be able to sue, continue to sue, or be part of any other lawsuit against the Liberty Silver Defendants or the Released Parties about the Released Claims
Page 8
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 59 of 121
in this Action. It also means that all of the Court's orders will apply to you and legally bind you, releasing your claims in this Action against the Liberty Silver Defendants.
\II.\t II I 1)0 NOT W\NF tO PRTI( IPFF INI lit SFtFLF\IF\F? IIO\\ I)() I F\( It l)li\I\Sl1I?
18. To exclude yourself from the Settlement Class, you must deliver a written Request for Exclusion addressed to Liberty Silver Securities Litigation, EXCLUSIONS, do Heffler Claims Group, P.O. Box 59089, Philadelphia, PA 19102-9089. The exclusion request must be received no later than , 2015. Each Request for Exclusion must (a) state the name, address and telephone number of the person or entity requesting exclusion; (b) state that such person or entity "requests exclusion from the Settlement Class in Stanaford v. Genovese, et al., No. 9: 13-cv-80923 (KLR)"; (c) state the number of shares of Liberty Silver Stock that the person or entity requesting exclusion purchased and/or sold during the Settlement Class Period, as well as the dates and prices of each such purchase and sale; (d) provide documents sufficient to prove the number of shares of Liberty Silver Stock the person or entity purchased and sold during the Settlement Class Period, as well as the dates and prices of each such purchase and/or sale; and (e) be signed by such person or entity requesting exclusion or an authorized representative. A Request for Exclusion shall not be effective unless it provides all the information called for in this paragraph and is received within the time stated above, or is otherwise accepted by the Court. If you ask to be excluded from the Settlement Class, you will not be eligible to receive any payment out of the Net Settlement Fund.
IX) I IIVF .'. IWVFR IN t Ill S ('SF?
19. The Court appointed the law firm of Federman & Sherwood to represent you and other Settlement Class Members. The lawyers are called Lead Counsel. You will not be personally liable for the fees and expenses incurred by these lawyers. If you want to be represented by your own lawvcr, you may hire one at your own expense.
hOW Will tilE lW\FRS tNT Ill S (SF BE P.Il)?
20. Lead Counsel have not received any payment for their services in pursuing claims against the Defendants on behalf of the Class, nor have they been reimbursed for their out-of-pocket expenses. Before final approval of the Settlement, Lead Counsel will apply to the Court for an award of attorneys' fees on behalf of all Lead Counsel in the amount no greater than 30% of the Settlement Fund. At the same time, Lead Counsel also intend to apply for reimbursement of Litigation Expenses to be paid from the Settlement Fund in an amount not to exceed $65,000. Lead Counsel will also apply to the Court for Reimbursement Awards in the amount of $1,000 to be paid to each of the two Lead Plaintiffs who have overseen the litigation on behalf of the Settlement Class Members.
Page 9
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 60 of 121
\\IIFN NI) \\IIIItl \\III , tilE (Otiti l)F(il)F WilEFI1ER I() \PPItOVF tilE SEttI!E\IE\t?
21. The Settlement Hearing will be held on , 2015 at _.m. before the Honorable Kenneth L. Ryskamp, at the United States District Court for the Southern District of Florida, Paul G. Rogers Federal Building and United States Courthouse, 701 Clematis Street, West Palm Beach, FL 33401, Courtroom 1. At this hearing, the Court will consider whether the Settlement is fair, reasonable, and adequate. If there are objections, the Court will consider them. The Court may also decide how much to pay Lead Counsel for attorneys' fees and expenses and whether and how much to award Lead Plaintiffs as reimbursement awards. The Court may adjourn or postpone the date of the hearing without further notice to the Settlement Class.
1)0 I hAVE 10 ( ( )\il TO FIlE Ilk RIM;?
22. No, you do not need to attend. Lead Counsel will answer any questions the Court may have. However, you are welcome to attend at your own expense. If you send an objection, you do not have to come to Court to talk about it. As long as you mail your written objection on time, the Court will consider it. if, however, you, or an attorney you hire, intend to appear at the Settlement Hearing you must indicato that you will do so in the letter containing your objections or in a separate letter which must be sent to the same persons by the same deadline.
\\11\I 1II'I'l\ IF I l)() NUTI1IN(; AtI
kIL?
23. If you do nothing, you will not receive a payment from the Settlement. However, unless you exclude yourself, you will not be able to start a lawsuit, continue with a lawsuit, or be part of any other future lawsuit against the Liberty Silver Defendants about the claims made in this casc, if the Settlement is approN cd by the Court.
110W ( AN I GET \IORF i\FOR\1.FIO\?
24. More details about the Settlement are in the Stipulation of Settlement, a copy of which is available on www.LibertySilverSettlement.com . Any questions concerning this Notice should be directed to:
Page 10
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 61 of 121
Claims Administrator: Lead Counsel for Plaintiffs:
Liberty Silver Securities Litigation do Heffler Claims Administration P.O. Box 59089 Philadelphia, PA 19102-9089 1-844-777-8053 www.LibertySilverSettlement.com
William B. Federman FEDERMAN & SHERWOOD 10205 N. Pennsylvania Avenue Oklahoma City, OK 73120 (405) 235-1560 wbffederman law. corn
SPECIAL NOTICE TO BANKS, BROKERS, AND OTHER NOMINEES
Bankers, brokers, and nominees ("Nominees") who held Liberty Silver Stock purchased during the period February 10, 2010 through October 5, 2012, inclusive, for the beneficial ownership of another Person, shall send the Notice and the Proof of Claim to such beneficial owners of such Liberty Silver Stock within ten (10) calendar days after receipt thereof, or send a list of the names and addresses of such beneficial owners to the Claims Administrator within ten (10) calendar days of receipt thereof, in which event the Claims Administrator shall promptly mail the Notice and the Proof of Claim to such beneficial owners. Nominees may obtain reimbursement for reasonable administrative costs actually incurred in connection with forwarding the Notice and which would not have been incurred but for the obligation to forward the Notice, upon submission of appropriate documentation to the Claims Administrator. Nominees who do not intend to comply with the provisions of this paragraph are requested to notify the Claims Administrator of that fact.
DO NOT CALL OR WRITE THE COURT OR THE OFFICE OF THE CLERK OF THE COURT REGARDING THIS NOTICE.
Dated: 12015 By Order of the Court United States District Court
Page 11
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 63 of 121
Liberty Silver Corp. Securities Litigation
c/o Heftier Claims Group
P.O. Box 59089
Philadelphia, PA 19102-9089
PROOF OF CLAIM AND RELEASE
Deadline for Submission:
IF YOU PURCHASED THE COMMON STOCK OF LIBERTY SILVER CORP. (OTC: LBSV)
("LIBERTY SILVER") DURING THE PERIOD FROM FEBRUARY 10, 2010 THROUGH
OCTOBER 5, 2012, INCLUSIVE, (THE "SETTLEMENT CLASS PERIOD"), AND WERE
DAMAGED THEREBY, YOU ARE A "SETTLEMENT CLASS MEMBER" AND YOU MAY BE
ENTITLED TO SHARE IN THE SETTLEMENT PROCEEDS.
IF YOU ARE A SETTLEMENT CLASS MEMBER, YOU MUST COMPLETE AND SUBMIT THIS FORM TO BE ELIGIBLE FOR ANY SETTLEMENT BENEFITS.
YOU MUST COMPLETE AND SIGN THIS PROOF OF CLAIM AND RELEASE ("PROOF OF CLAIM") AND MAIL IT BY FIRST CLASS MAIL, POSTMARKED NO LATER THAN TO HEFFLER CLAIMS GROUP, THE CLAIMS ADMINISTRATOR, AT THE FOLLOWING ADDRESS:
Liberty Silver Corp. Securities Litigation
c/o Heftier Claims Group
P.O. Box 59089
Philadelphia, PA 19102-9089
YOUR FAILURE TO SUBMITYOUR CLAIM BY_____ 2015 WILL SUBJECTYOUR CLAIM TO REJECTION AND PRECLUDE YOUR RECEIVING ANY MONEY IN CONNECTION WITH THE SETTLEMENT OF THIS ACTION. DO NOT MAIL OR DELIVER YOUR CLAIM TO THE COURT OR TO ANY OF THE PARTIES OR THEIR COUNSEL AS ANY SUCH CLAIM WILL BE DEEMED NOT TO HAVE BEEN SUBMITTED. SUBMIT YOUR CLAIM ONLY TO THE CLAIMS ADMINISTRATOR.
CLAIMANT'S STATEMENT
1. I (we) purchased common stock of Liberty Silver (OTC: LBSV) during the period February 10, 2010 through October 5, 2012, inclusive, and was (were) damaged thereby. (Do not submit this Proof of Claim if you did not purchase Liberty Silver common stock during the designated Settlement Class Period).
2. By submitting this Proof of Claim, I (we) state that I (we) believe in good faith that I am (we are) a Class Member as defined above and in the Notice of Pendency and Proposed Settlement of Class Action (the "Notice"), or am (are) acting for such person(s); that I am (we are) not a Defendant in the Action or anyone excluded from the Class; that I (we) have read and understand the Notice; that I (we) believe that I am (we are) entitled to receive a share of the Net Settlement Fund, as defined in the Notice; that I (we) elect to participate in the proposed Settlement described in the Notice; and that I (we) have not filed a request for exclusion. (If you are acting in a representative capacity on behalf of a Class Member [e.g., as an executor, administrator, trustee, or other representative], you must submit evidence of your current authority to act on behalf of that Class Member. Such evidence would include, for example, letters testamentary, letters of administration, or a copy of the trust documents.)
Page 2
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 64 of 121
3. I (we) consent to the jurisdiction of the Court with respect to all questions concerning the validity of this Proof of Claim. I (we) understand and agree that my (our) claim may be subject to investigation and discovery under the Federal Rules of Civil Procedure, provided that such investigation and discovery shall be limited to my (our) status as a Class Member(s) and the validity and amount of my (our) claim. No discovery shall be allowed on the merits of the Action or Settlement in connection with processing of the Proof of Claim.
4. I (we) have set forth where requested below all relevant information with respect to each transaction in Liberty Silver stock during the Settlement Class Period. I (we) agree to furnish additional information to the Claims Administrator to support this claim if requested to do so.
5. I (we) have enclosed photocopies of the stockbroker's confirmation slips, stockbroker's statements, or other documents evidencing each purchase, sale or retention of Liberty Silver stock listed below in support of my (our) claim. (IF ANY SUCH DOCUMENTS ARE NOT IN YOUR POSSESSION, PLEASE OBTAIN A COPY OR EQUIVALENT DOCUMENTS FROM YOUR BROKER BECAUSE THESE DOCUMENTS ARE NECESSARY TO PROVE AND PROCESS YOUR CLAIM.)
6. I (we) understand that the information contained in this Proof of Claim is subject to such verification as the Claims Administrator may request or as the Court may direct, and I (we) agree to cooperate in any such verification. (The requested information is designed to provide the minimum amount of information necessary to process most simple claims. The Claims Administrator may request additional information as required to efficiently and reliably calculate your recognized claim. In some cases, the Claims Administrator may condition acceptance of the claim based upon the production of additional information, including, where applicable, information concerning transactions in any derivatives securities such as options.)
Upon the occurrence of the Court's approval of the Settlement, as detailed in the Notice, I (we) agree and acknowledge that my (our) signature(s) below shall effect and constitute a full and complete release, remise and discharge by me (us) and my (our) heirs, joint tenants, tenants in common, beneficiaries, executors, administrators, predecessors, successors, attorneys, insurers and assigns (or, if I am (we are) submitting this Proof of Claim on behalf of a corporation, a partnership, estate or one or more other persons, by it, him, her or them, and by its, his, her or their heirs, executors, administrators, predecessors, successors, and assigns) of each of the "Released Parties" of all "Released Claims," as defined in the Stipulation of Settlement.
8. NOTICE REGARDING ELECTRONIC FILES: Certain claimants with large numbers of transactions may request, or may be requested, to submit information regarding their transactions in electronic files. All Claimants MUST submit a manually signed paper Proof of Claim form listing all their transactions whether or not they also submit electronic copies. If you wish to file your claim electronically, you must contact the Claims Administrator at 1-844-777-8053 or visit their website at
to obtain the required file layout. No electronic files will be considered to have been properly submitted unless the Claims Administrator issues to the Claimant a written acknowledgment of receipt and acceptance of electronically submitted data.
Page 3
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 65 of 121
I. CLAIMANT INFORMATION Name
Joint Name
Address
City State ZIP
Foreign Province Foreign Country
Day Phone Evening Phone
Social Security Number (for individuals) OR I Taxpayer Identification Number (for estates, trusts, corporations, etc.)
The Internal Revenue Service ("I.R.S.") requires either your social security number or taxpayer identitication number. It you tail to provide this intormation, your claim may be rejected.
II. SCHEDULE OF TRANSACTIONS IN LIBERTY SILVER STOCK
Beginning Holdings: A. State the total number of shares of Liberty Silver common stock
owned at the close of trading on February 9, 2010, long or short (must be documented). I I
Purchases During the Settlement Class Period: B. Separately list each and every purchase of Liberty Silver common stock during the period
from February 10, 2010, through October 5, 2012, inclusive, and provide the following information (must be documented):
Trade Date Total Cost (List Chronologically) Number of Shares (Excluding Commissions,
(Month/Day/Year) Purchased Price per Share Taxes, and Fees)
Page 4
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 66 of 121
Sales During the Settlement Class Period: C. Separately list each and every sale of Liberty Silver common stock during the period from
February 10, 2010, through October 5, 2012, inclusive, and provide the following information (must be documented):
Trade Date
Amount Received (List Chronologically)
(Excluding Commissions, Number of Shares Sold Price per Share Taxes, and Fees)
Holdings: D. State the total number of shares of Liberty Silver common stock
owned as of the trading halt at 9:30 a.m. (EDT) on October 5, 2012, long or short (must be documented).
Sales During 90 Day Look Back: E. Separately list each and every sale of Liberty Silver common stock during the period beginning with the trading halt at 9:30 a.m. (EDT) on October 5, 2012 through January 2, 2013, inclusive, and Drovide the following information (must be documented):
Trade Date
Amount Received (List Chronologically)
(Excluding Commissions, Number of Shares Sold Price per Share Taxes, and Fees)
Ending Holdings: F. State the total number of shares of Liberty Silver common stock
owned at the close of trading on January 2, 2013, long or short (must be documented).
If additional space is needed, attach separate, numbered sheets, giving all required information, substantially in the same format, and print your name and Social Security or Taxpayer Identification Number at the top of each sheet.
Ill. CERTIFICATION
I (We) certify that I am (we are) NOT subject to backup withholding under the provisions of Section 3406 (a)(1)(c) of the Internal Revenue Code because: (a) I am (We are) exempt from backup withholding, or (b) I (we) have not been notified by the I.R.S. that I am (we are) subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the I.R.S. has notified me (us) that I am (we are) no longer subject to backup withholding.
Page 5
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 67 of 121
NOTE: If you have been notified by the I.R.S. that you are subject to backup withholding, please strike out the language that you are not subject to backup withholding in the certification above.
UNDER THE PENALTIES OF PERJURY UNDER THE LAWS OF THE UNITED STATES, I (WE) CERTIFY THAT ALL OF THE INFORMATION I (WE) PROVIDED ON THIS PROOF OF CLAIM AND RELEASE FORM IS TRUE, CORRECT AND COMPLETE.
Signature of Claimant (If this claim is being made on behalf of Joint Claimants, then each must sign):
(Signature)
(Signature)
(Capacity of person(s) signing, e.g. beneficial purchaser(s), executor, administrator, trustee, etc.)
Date:
THIS PROOF OF CLAIM MUST BE SUBMITTED NO LATER THAN . 2015 AND MUST BE MAILED TO:
Liberty Silver Corp. Securities Litigation c/o Heftier Claims Group
P.O. Box 59089 Philadelphia, PA 19102-9089
A Proof of Claim received by the Claims Administrator shall be deemed to have been submitted when posted, if mailed by_, 2015 and if a postmark is indicated on the envelope and it is mailed first class and addressed in accordance with the above instructions. In all other cases, a Proof of Claim shall be deemed to have been submitted when actually received by the Claims Administrator.
REMINDER CHECKLIST
• Please be sure to sign this Proof of Claim on page_. If this Proof of Claim is submitted on behalf of joint claimants, then both claimants must sign.
• Please remember to attach supporting documents. Do NOT send any stock certificates. Keep copies of everything you submit.
• Do NOT use highlighter on the Proof of Claim or any supporting documents.
• If you move after submitting this Proof of Claim, please notify the Claims Administrator of the change in your address.
Page 6
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 69 of 121
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA
TODD STANAFORD a/k/a JERALD TODD STANAFORD, on behalf of himself and all others similarly situated,
Plaintiffs, vs.
ROBERT DONALD BRUCE GENOVESE, WILLIAM TAFURI, GEOFFREY BROWNE, BG CAPITAL GROUP LTD, LOOK BACK INVESTMENTS, INC., OUTLOOK INVESTMENTS, INC., AND LIBERTY SILVER CORPORATION,
Defendants.
Case No. 9:13-cv-80923 (KLR)
SUMMARY NOTICE OF PENDENCY AND PROPOSED PARTIAL SETTLEMENT OF CLASS ACTION
TO: All persons and entities who purchased or acquired common stock in Liberty Silver Corporation (OTC: LBSV) during the period from February 10, 2010 through October 5, 2012.
YOU ARE HEREBY NOTIFIED, pursuant to an Order of the United States District Court for the Southern District of Florida, that Lead Plaintiffs in the above-captioned litigation (the "Action") have reached a proposed partial settlement with Defendants Liberty Silver Corporation, Geoffrey Browne, and William Tafuri (the "Liberty Silver Defendants") for $1 million in cash, plus interest earned (the "Settlement"). Defendants Robert Donald Bruce Genovese, BG Capital Group Ltd, Look Back Investments, Inc., and Outlook Investments Inc. (the "BG Defendants") who are also named as defendants in this Action, are not parties to this Settlement. The litigation is continuing against the BG Defendants regardless of whether the proposed partial settlement is approved, however, there is no guarantee of an additional settlement or distribution.
A hearing will be held on , 2015 at _.m before the Honorable Kenneth L. Ryskamp, at the United States District Court for the Southern District of Florida, 701 Clematis Street, West Palm Beach, FL 33401 (the "Settlement Hearing"), to determine: (i) whether the Court should approve the proposed partial Settlement as fair, reasonable, and adequate; (ii) whether the proposed Plan of Allocation should be approved as fair and reasonable; (iii) whether Lead Counsel's application for attorneys' fees, reimbursement of expenses, and reimbursement awards for Lead Plaintiffs should be approved; and (iv) whether the claims against the Liberty Silver Defendants should be dismissed with prejudice.
If you purchased publicly traded common stock of Liberty Silver Corporation (OTC: LBSV) ("Liberty Silver") during the period from February 10, 2010 through October 5, 2012, inclusive (the "Settlement Class Period"), your rights may be affected by the Settlement, and you may be entitled to share in the Settlement Fund. if you have not yet received the detailed Notice of Pendency and Settlement of Class Action (the "Notice") and a copy of the Proof of Claim
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 70 of 121
and Release, you may obtain copies by writing to Liberty Silver Corp. Securities Litigation, do
Heffler Claims Group, P0 Box 59089, Philadelphia, PA 19102-9089, or going to the website, wwwLibertvsilvcrsettlenicntcom.
If you are a member of the Settlement Class, in order to be eligible to receive a payment under the proposed Settlement, you must submit a Claim Form postmarked no later than
,2015. If you are a member of the Settlement Class and do not submit a proper Claim Form, you will not share in the distribution of the net proceeds of the Settlement but you will nevertheless be bound by any judgment or orders entered by the Court in the Action.
If you are a Class Member and wish to exclude yourself from the Settlement Class, you must submit a request for exclusion such that it is received no later than , 2015, in accordance with the instructions set forth in the Notice. if you properly exclude yourself from the Settlement Class, you will not be bound by any judgment or orders entered by the Court in the Action and you will not be eligible to share in the proceeds of the Settlement.
Any objections to the proposed Settlement, the proposed Plan of Allocation, or Lead Counsel's application for attorneys' fees, reimbursement of litigation expenses, and reimbursement awards for Lead Plaintiffs, must be filed with the Court and delivered to Lead Counsel and counsel for the Defendants such that they are received no later than 2015, in accordance with the instructions set forth in the Notice.
PLEASE DO NOT CONTACT THE COURT OR THE COURT CLERK'S OFFICE REGARDING THIS NOTICE. Any questions, should be directed to:
Claims Administrator:
Liberty Silver Securities Litigation do Heffler Claims Administration P.O. Box 59089 Philadelphia, PA 19102-9089 1-844-777-8053 wwwLibcrtySilverSetticrnentcorn
Lead Counsel for Plaintiffs:
William B. Federman FEDERMAN & SHERWOOD 10205 N. Pennsylvania Avenue Oklahoma City, OK 73120 (405) 235-1560 wbliäiederrnanlaw. corn
Dated: 12015 By Order of the Court
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 71 of 121
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA
TODD STANAFORD a/k/a JERALD TODD STANAFORD, on behalf of himself and all others similarly situated, Case No. 9:13-cv-80923 (KLR)
Plaintiffs,
vs.
ROBERT DONALD BRUCE GENOVESE, WILLIAM TAFURI, GEOFFREY BROWNE, BG CAPITAL GROUP LTD, LOOK BACK INVESTMENTS, INC., OUTLOOK INVESTMENTS, INC., AND LIBERTY SILVER CORPORATION,
Defendants.
[PROPOSED] FINAL JUDGMENT AND ORDER OF DISMISSAL
EXHIBIT B
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 72 of 121
This matter came before the Court for hearing pursuant to the Order of this Court, dated
2015, on the application of the Parties for approval of the partial Settlement between
Plaintiffs and Defendants Liberty Silver Corporation, Geoffrey Browne, and William Tafuri (the
"Liberty Silver Defendants"), set forth in the Stipulation of Settlement, dated February 20, 2015
(the "Stipulation"). Due and adequate notice having been given of the Settlement as required in
the Preliminary Approval Order, and the Court having considered all papers filed and proceedings
held herein and otherwise being fully informed in the premises and good cause appearing therefore,
IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that:
1. This Final Judgment and Order of Dismissal incorporates by reference the
definitions in the Stipulation, and all terms used herein and otherwise not defined shall have the
same meanings set forth in the Stipulation.
2. The Court has jurisdiction over the subject matter of the Action and over all parties
to the Action, including all Members of the Settlement Class.
3. Pursuant to 15 U.S.C. § 78u-4(a)(3)(B)(iii), the Court herby appoints, for purposes
of effectuating this Settlement, Lead Plaintiffs Todd Stanaford and Philip Hobley as class
representatives.
4. Pursuant to Rule 23 of the Federal Rules of Civil Procedure, the Court herby
certifies, for purposes of effectuating the Settlement, a Settlement Class of all Persons who
purchased or otherwise acquired the publicly traded securities of Liberty Silver Corporation (OTC:
LBSV)'Liberty Silver" or the "Company") during the period February 10, 2010 through October
5, 2012, inclusive, and were damaged thereby, including any and all of their respective successors-
in-interest, successors, trustees, executors, administrators, estates, heirs, assigns and transferees,
and any person or entity acting for or on behalf of, or claiming under, any of them. Excluded from
the Settlement Class are each of the Defendants; any parent or subsidiary, present or former
- 1 -
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 73 of 121
director, officer, or subsidiary of any of the Defendants; any entity in which any Defendant
respectively has a controlling interest; Defendants' respective legal representatives, heirs,
successors and assigns; and any immediate family member of an individual defendant. Also
excluded from the Settlement Class are those Persons who request exclusion from the Settlement
Class in such form and manner, and within such time, as the Court shall prescribe.
5. With respect to the Settlement Class, this Court finds for purposes of effectuating
the Settlement that: (a) the members of the Settlement Class are so numerous that joinder of all
Settlement Class Members in the Action is impracticable; (b) there are questions of law and fact
common to the Class which predominate over any individual questions; (c) the claims of the Lead
Plaintiffs are typical of the claims of the Class; (d) the Lead Plaintiffs and Lead Counsel have
fairly and adequately represented and protected the interests of all the Settlement Class Members;
and (e) a class action is superior to other available methods for the fair and efficient adjudication
of the controversy, considering: (i) the interests of the Members of the Settlement Class in
individually controlling the prosecution of separate actions; (ii) the extent and nature of any
litigation concerning the controversy already commenced by Members of the Settlement Class;
(iii) the desirability or undesirability of concentrating the litigation of these claims in this particular
forum; and (iv) the difficulties likely to be encountered in the management of the class action.
6. Except as to any individual claim of those Persons (identified in Exhibit 1 attached
hereto)' who have validly and timely requested exclusion from the Settlement Class, the Action
and all claims contained therein, including all of the Released Claims, are dismissed with prejudice
as to Lead Plaintiffs and the other Settlement Members of the Class, and as against each and all of
1 The absence of an Exhibit 1 from this Order reflects that no Persons requested exclusion from the Class.
-2-
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 74 of 121
the Released Parties. The Parties are to bear their own costs, except as otherwise provided in the
Stipulation.
7. Pursuant to Rule 23 of the Federal Rules of Civil Procedure, the Court hereby
approves the Settlement set forth in the Stipulation and finds that the Settlement is, in all respects,
fair, reasonable, and adequate to, and is in the best interests of, Plaintiffs and each of the Class
Members. The Court further finds the Settlement set forth in the Stipulation is the result of arm's-
length negotiations between experienced counsel representing the interests of Plaintiffs,
Settlement Class Members, and the Liberty Silver Defendants. Accordingly, the Settlement
embodied in the Stipulation is hereby approved in all respects and shall be consummated in
accordance with its terms and provisions. The Parties are hereby directed to perform the terms of
the Stipulation.
8. Upon the Effective Date, Lead Plaintiffs and each ofthe Settlement Class Members,
on behalf of themselves, their current, former or future directors, officers, partners, members,
employees, shareholders, attorneys, consultants, accountants or auditors, banks, investment banks,
advisors, agents, personal and legal representatives, insurers, reinsurers, predecessors, successors,
parents, subsidiaries, divisions, joint venturers, assigns, spouses, heirs, devisees, executors,
trustees, administrators, principals and related and affiliated entities, any partnership in which one
or more of them is a general or limited partner, any entity in which one or more of them has a
controlling interest, any member of the family of one or more of them, and any trust or foundation
of which one or more of them is the settlor or which is for the benefit of one or more of them or a
member of the family of one or more of them, or any of them, to the extent possible, shall be
deemed to have, and by operation of this Final Judgment and Order of Dismissal shall have, fully,
finally, and forever released, relinquished, and discharged all Released Claims against the Liberty
Silver Defendants and the Released Parties, whether or not such Class Member executes and
-3-
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 75 of 121
delivers a Proof of Claim and Release form. The Parties acknowledge, and the Class Members
shall be deemed by operation of law to acknowledge, that the inclusion of Unknown Claims (as
defined in the Stipulation) in the definition of Released Claims was separately bargained for and
was a key element of the Settlement of which this release is a part.
9. Upon the Effective Date, Lead Plaintiffs and all Settlement Class Members, and
anyone claiming through or on behalf of any of them, are forever barred and enjoined from
commencing, instituting or continuing to prosecute any action or proceeding of any kind in any
court of law or equity, arbitration tribunal, administrative forum, or any other forum of any kind,
asserting against any of the Liberty Silver Defendants or the Released Parties any of the Released
Claims. In accordance with Section 2 1D-4(f)(7)(A) of the Private Securities Litigation Reform
Act of 1995, 15 U.S.C. §78u-4(f)(7)(A) (the "PSLRA"), the Settlement bars, upon the Effective
Date, all future claims for contribution arising out of the Action - (i) by any person against any
Released Party; and (ii) by the Released Parties against any person, other than a person whose
liability has been extinguished by the Settlement.
10. Upon the Effective Date, each of the Liberty Silver Defendants shall be deemed to
have, and by operation of this Final Judgment and Order of Dismissal shall have, fully, finally,
and forever released, relinquished, and discharged from each and all of the Plaintiffs (except as to
any individual or entity who has validly, timely, and completely requested exclusion from the
Class), their respective present and former parents, subsidiaries, divisions and affiliates, the present
and former partners, employees, officers and directors of each of them, the present and former
attorneys (including Lead Counsel), accountants, insurers, and agents of each of them, each of the
foregoing solely in their capacity as such, and the predecessors, heirs, successors and assigns of
each, from all claims of every nature and description, including known and Unknown Claims,
relating to the institution, prosecution and/or resolution of the Action or the Released Claims.
-4-
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 76 of 121
11. The distribution of the Notice of Pendency and Proposed Settlement of Class
Action and the publication of the Summary Notice as provided for in the Order Preliminarily
Approving Settlement and Providing for Notice constituted the best notice practicable under the
circumstances, including individual notice to all Members of the Settlement Class who could be
identified through reasonable effort. Such notice provided the best notice practicable under the
circumstances of those proceedings and of the matters set forth therein, including the proposed
Settlement set forth in the Stipulation, to all Persons entitled to such notice, and such notice fully
satisfied the requirements of Federal Rule of Civil Procedure 23, the requirements of due process,
and any other applicable law, including the Private Securities Litigation Reform Act of 1995.
12. Any Plan of Allocation submitted by Lead Counsel or any Fee and Expense Award
or any reimbursement award to Lead Plaintiffs shall in no way disturb or affect this Final Judgment
and Order of Dismissal and shall be considered separate from this Final Judgment and Order of
Dismissal.
13. Neither the Stipulation nor the Settlement contained therein, nor any act performed
or document executed pursuant to or in furtherance of the Stipulation or the Settlement: (a) is or
may be deemed to be or may be used as an admission of, or evidence of, the validity of any
Released Claim, or of any wrongdoing, fault or liability of the Liberty Silver Defendants or the
Released Parties; or (b) is or may be deemed to be or may be used as an admission of, or evidence
of, any fault, wrongdoing, omission or liability of any the Liberty Silver Defendants or the
Released Parties in any court of law or equity, arbitration tribunal, administrative proceeding in
any court, administrative agency or other tribunal, or any other forum of any kind. Defendants
and the Released Parties may file the Stipulation and/or this Final Judgment and Dismissal in any
action or proceeding that may be brought against them in order to support a defense or
counterclaim based on principles of resludicata, collateral estoppel, release, good faith settlement,
- 5 -
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 77 of 121
judgment bar or reduction or any other theory of, without limitation, claim preclusion or issue
preclusion or similar defense or counterclaim. In addition, nothing contained in this paragraph
shall prevent the Stipulation and this Final Judgment and Order of Dismissal (or any agreement or
order relating thereto) from being used, offered or received in evidence in any proceeding to
approve, enforce or otherwise effectuate the Stipulation (or any agreement or order relating
thereto) or this Final Judgment and Dismissal, or to enforce or effectuate provisions of the
Settlement, this Final Judgment and Dismissal, or the Proofs of Claim and Release as to the Liberty
Silver Defendants and the Released Parties.
14. Without affecting the finality of this Final Judgment and Order of Dismissal in any
way, this Court hereby retains continuing jurisdiction over: (a) implementation of the Settlement
and any award or distribution of the Settlement Fund, including interest earned thereon;
(b) disposition of the Settlement Fund; (c) hearing and determining applications for attorneys' fees
and expenses and any reimbursement awards to Lead Plaintiffs in the Action; and (d) all Parties to
the Stipulation for the purpose of construing, enforcing, and administering the Stipulation.
15. This Final Judgment and Order of Dismissal has not effect on Plaintiffs' claims
against Defendants Robert Donald Bruce Genovese, BG Capital Group Ltd., Look Back
Investments, Inc., or Outlook Investments, Inc. (the "BG Defendants"), and the Court specifically
retains jurisdiction over such claims and defendants.
16. The Court finds that during the course of the Action, the Parties and their respective
counsel at all times complied with the requirements of Federal Rule of Civil Procedure 11.
17. In the event that the Settlement does not become effective in accordance with the
terms of the Stipulation or the Effective Date does not occur, or in the event that the Settlement
Fund, or any portion thereof, is returned pursuant to the Stipulation, then this Final Judgment and
Order of Dismissal shall be rendered null and void to the extent provided by and in accordance
-6-
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 78 of 121
with the Stipulation and shall be vacated and, in such event, all orders entered and releases
delivered in connection herewith shall be null and void to the extent provided by and in accordance
with the Stipulation.
IT IS SO ORDERED.
DATED: THE HONORABLE KENNETH L. RYSKAMP UNITED STATES DISTRICT JUDGE
-7-
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 80 of 121
CORNERSTONE RESEARCH ECONOMIC AND FINANCIAL CONSULTING AND EXPERT TESTIMONY
Securities Class Action Settlements 2013 Review and Analysis
Case 9:13-cv-80923-KLR Document 1334 Entered on FLSD Docket 02/2 7/2015 Page 81 of 121
Securities Class Action Settlements-2013 Review and Analysis
TABLE OF CONTENTS
Highlights........................................................ I
Developing Trends........................................... 2
Number and Size of Settlements...................... 3
Total Settlement Dollars ............................. 3
Mega Settlements........................................ 4
Settlement Size ........................................... 5
Damages Estimates and Market Capitalization
7
"Estimated Damages" ................................. 7
Disclosure Dollar Loss................................ 10
Tiered Estimated Damages ......................... 11
Analysis of Settlement Characteristics ........... 12
Nature of Claims ......................................... 12
Accounting Allegations .............................. 13
Third-Party Codefendants ........................... 14
Institutional Investors................................. 15
Derivative Actions ...................................... 16
CorrespondingSEC Actions .................................................................................................................................................17
Comparison of Settlement Characteristics by Size ...............................................................................................................18
Timeto Settlement.....................................................................................................................................................................19
LitigationStages ........................................................................................................................................................................20
IndustrySectors .........................................................................................................................................................................21
FederalCourt Circuits................................................................................................................................................................22
Cornerstone Research's Settlement Prediction Analysis ...........................................................................................................23
ResearchSample.. ... ___ --- ................... ....... .... ... ....... ....... ..................................... ............................... ...................................... 24
DataSources..... ......................... .............. ..... ___ ................ .................. ........ ..................................................... - 24
Endnotes....................................................................................................................................................................................25
Aboutthe Authors ..................................................................... ............. .............. .......................................................... .... ... ..... 26
Case 9:13-cv-80923-KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 82 of 121
Securities Class Action Settlements-2013 Review and Analysis
lii
Figure1: Settlement Statistics .... ....... ___ ....... ................................................ ............... .. ....... ......................................... ___ I
Figure 2: Total Settlement Dollars ...... ....... ............................... ..................... ..... .... ....... .... ........................................... ....... ........ 3
Figure3: Mega Settlements .........................................................................................................................................................4
Figure 4: cumulative Ten-Year Settlement Distribution ............................................................................................................. 5
Figure 5 : Settlement Percentiles ..................................................................................................................................................6
Figure 6: Median and Average "Estimated Damages" ................................................................................................................7
Figure 7: Median Settlements as a Percentage of "Estimated Damages" ....................................................................................8
Figure 8: Median Settlements as a Percentage of "Estimated Damages" by Damages Ranges. .............................. ... ... ...... ........ 9
Figure 9: Median and Average Disclosure Dollar Loss ................... ___ ........ ........... ..................................... .... ......... ............ ...10
Figure 10: Tiered Estimated Damages ...................................... ........................................................................ ___ ... ................ 11
Figure 11: Settlements by Nature of claims ..............................................................................................................................12
Figure 12: Median Settlements as a Percentage of "Estimated Damages" and Accounting Allegations ............................... .... 13
Figure 13: Median Settlements as a Percentage of "Estimated Damages" and Third-Party codefendants ...............................14
Figure 14: Median Settlement Amounts and Public Pensions ................................................................................................... 15
Figure 15: Frequency of Derivative Actions... .... ... ... .... ... .................................................................. ....... ............................... ..16
Figure 16: Frequency of SEC Actions .......................................................................................................................................17
Figure 17: Comparison of Settlement Characteristics by Size ... .............. ..... ... .... .......... .............................. .......... ... .... ... .......... 18
Figure 18: Median Settlements by Duration from Filing Date to Settlement Hearing Date... ... ___ .......... ............................... 19
Figure19: Litigation Stages .......... ... .................................................. ....................... ..... ................................................ ............ 20
Figure 20: Settlements by Select Industry Sectors .... ....... ........ ....................................................................... .. ........ ................. 21
Figure 21: Settlements by Federal court Circuit .......................................................................................................................22
Case 9:13-cv-80923-KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 83 of 121
Securities Class Action Settlements-2013 Review and Analysis
HIGHLIGHTS
• Total settlement dollars in 2013 increased substantially-46 percent
over 2012 and 60 percent above the average for the prior five years.
(page 3)
• There were 67 settlements in 2013 (up from 57 in 2012), the first year-
over-year increase since 2009. (page 3)
• Mega settlements pushed settlement dollars up in 2013, accounting for
84 percent of total settlement dollars, the second highest proportion in
the last decade. (page 4)
• While mega settlements drove up the 2013 average settlement amount,
the median settlement amount declined, reflecting a reduction in the
size of more typical cases. (page 5)
• For 2013, the median "estimated damages" declined 48 percent from
2012 and is 17.5 percent lower than the median for post–Reform Act
settlements in the prior five years. Since "estimated damages" are the
most important factor in determining settlement amounts, this decline
was likely a major factor contributing to the substantially lower median
settlement in 2013 compared with 2012. (page 7)
• The proportion of settled cases in 2013 involving accounting allegations
dipped to a ten-year low, but the settlement as a percentage of
"estimated damages" for these cases was much higher than for cases
not involving such allegations. (page 13)
• The median settlement in 2013 for cases with a public pension as a
lead plaintiff was $23 million, compared with $3 million for cases without
a public pension as a lead plaintiff. (page 15)
• New analyses reveal that settlements of $50 million or lower are far less
likely to involve accompanying SEC actions or a public pension as a
lead plaintiff. (page 18)
FIGURE 1: SETTLEMENT STATISTICS
(Dollars in Millions)
2013 1996-2012
Minimum $0.7 $0.1
Median $6.5 $8.3
Average $71.3 $55.5
Maximum $2,425.0 $8,358.2
Total Amount $4,773.9 $73,740.2
Note: Settlement dollars adjusted for inflation; 2013 dollar equivalent figures used.
Case 9:13-cv-80923-KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 84 of 121
Securities Class Action Settlements-2013 Review and Analysis
Is] 4YA I t•1J hIet I J J]
The year 2013 saw the highest total dollar value of settlements approved over the last six years. This was due in
part to an uptick in the number of cases settled (compared with the prior two years), as well as the relatively high
average shareholder losses associated with cases settled in 2013 (the second highest in the last six years). The
surrounding economic events are an important backdrop to understanding the settlement trends.
Settlement sizes in 2013 were affected by the resolution of a number of credit crisis cases, which tend to involve
relatively large settlement amounts and related investor losses. Pharmaceutical industry sector settlements also
contributed to the overall increase.
At the opposite end of the settlement spectrum were settlements of Chinese reverse merger cases. These
mailers tend to be relatively small. According to Securities Class Action Filings-2013 Year in Review released
earlier this year by Cornerstone Research, the majority of these cases were filed in 2011 and thus, not
surprisingly, a relatively large number (14 cases) were settled in 2013. All but one of these settlements were for
amounts less than $10 million.
Despite record enforcement activity by the SEC in the last couple of years, there has not been an increase in
securities class action settlements accompanied by SEC actions. This is due in part to the potential lag between
the underlying class action settlement and resolution of activity commenced by the SEC. Furthermore, the SEC's
enforcement activity includes matters outside the scope of this research. Nevertheless, it is possible there will be
an increase in securities class actions accompanied by disclosure-related SEC enforcement actions in the future.
In addition, securities class action filings (i.e., new cases) involving Rule 10b-5, Section 11, and/or Section 12
allegations have been relatively high over the last few years, including a surge in the second half of 2013 (see
Securities Class Action Filings-2013 Year in Review). Thus, it is unlikely there will be any significant decline in
the overall number of cases settled in upcoming years.
Looking ahead, it would be remiss not to mention the Halliburton Co. v. Erica P. John Fund matter currently
before the U.S. Supreme Court. As has been widely discussed, the case challenges the fraud-on-the-market
presumption that was established in 1988 through Basic Inc. v. Levinson. The suit has the potential to
dramatically affect the entire landscape surrounding securities class actions, including issues that are the focus of
this report, such as the damages associated with securities cases, the progression of these cases through the
litigation process, and ultimately, the settlement amounts involved.
This report analyzes a sample of securities class actions filed after passage of the Private Securities Litigation Reform Act of
1995 (Reform Act) and settled from 1996 through year-end 2013, and explores a variety of factors that influence settlement outcomes. This study focuses on cases alleging fraudulent inflation in the price of a corporation's common stock (i.e., excluding cases with alleged classes of only bondholders, preferred stockholders, etc., and excluding cases alleging fraudulent depression in price). See page 24 for a detailed description of the research sample.
Case 9:13-cv-80923-KLR Document 1334 Entered on FLSD Docket 02/2 7/2015 Page 85 of 121
Securities Class Action Settlements-2013 Review and Analysis
I [II a I:] 111 K4 *1) ati liii I I Itl
TOTAL SETTLEMENT DOLLARS
3
• In 2013, there were 67 court-approved settlements, a 17.5 percent
increase from 2012 and a reversal of the year-over-year decline in the
number of settlements observed since 2009.
• The increase in the number of settlements is likely due, in part, to
increased securities class action filings during 2010 through 2012.1
(See page 19 for a related discussion of time from filing to settlement.)
• The increase in total settlement dollars in 2013 was largely driven by six
mega settlements (settlements at or above $100 million).
Total settlement
dollars in
2013 increased
46 percent
over 2012.
FIGURE 2: TOTAL SETTLEMENT DOLLARS
2004-2013
(Dollars in Millions)
$19,887
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 N=109 N=119 i'1=90 N=109 N=97 N=99 N=85 N=65 N=57 N=67
Note: Settlement dollars adjusted for inflation; 2013 dollar equivalent figures used.
95%
82%
raT,Ti
73%
41%
15% 2011
p11%
2012
9%
IL 2013
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 86 of 121
Securities Class Action Settlements-2013 Review and Analysis
4
MEGA SETTLEMENTS
• The percentage of settlement dollars from mega settlements (settlements at or above $100 million) was the second highest proportion in the last ten years.
• As noted, there were six mega settlements in 2013, including one settlement for more than $2 billion. The remaining five cases settled for between $150 million and $600 million.
• Three mega settlements involved pharmaceutical companies, and three involved financial institutions.
In 2013,
six settlements
accounted for
84 percent of total
settlement dollars.
FIGURE 3: MEGA SETTLEMENTS
2004-2013
• Total Mega Settlement Dollars as a Percentage of All Settlement Dollars
• Number of Mega Settlements as a Percentage of All Settlements
84% 79%
73%
S.
52%
11/0 2007 2008
9%
2009
Case 9:13-cv-80923-KLR Document 1334 Entered on FLSD Docket 02/2 7/2015 Page 87 of 121
Securities Class Action Settlements-2013 Review and Analysis
SETTLEMENT SIZE
• In 2013, the settlement size in approximately 60 percent of settled
cases was $10 million or less, slightly higher than the cumulative ten-
year percentage of about 56 percent.
• This high number of smaller settlements contributed to a 37 percent
decline in the median settlement size in 2013 compared with 2012
($6.5 million in 2013 versus $10.3 million in 2012).
• Roughly 32 percent of settlements less than $10 million in 2013 were
for cases involving Chinese reverse mergers. 2
• A total of 44 cases related to the subprime credit crisis are included in
this study. 3 The median settlement for credit crisis–related cases was
$30 million and the average settlement was over $140 million. These
cases generally settle for higher amounts compared to cases not
associated with the credit crisis.
The vast majority of securities class actions settle for less than
$50 million.
FIGURE 4: CUMULATIVE TEN-YEAR SETTLEMENT DISTRIBUTION 2004-2013 (Dollars in Millions)
100.0% n'
S $2 S $5 5$10 5$25 5$50 S $100 s$250 All Settlements
Note: Settlement dollars adjusted for inflation; 2013 dollar equivalent figures used.
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 88 of 121
Securities Class Action Settlements-2013 Review and Analysis
SETTLEMENT SIZE continued
• Overall, 50 percent of post-Reform Act cases have settled for between $3.6 million and $20.6 million.
• Despite recent swings in annual median settlements, the range of settlement values between the 25th and 75th percentiles, with few exceptions, has fluctuated moderately with no discernible trend.
Annual median settlement values have ranged between $6 and $12 million in recent years.
FIGURE 5: SETTLEMENT PERCENTILES (Dollars in Millions)
Year Average 10th 25th Med ian 75th 90th
1996-2013 $42.0 $1.7 $3.6 $20.6 $70.6
2013 $71.3 $1.9 $3.0 $6.5 $21.5 $79.5
2012 $57.3 $1.3 $2.8 SO.3 $35.5 $110.6
2011 $21.7 $1.9 $2.6 $6.0 $18.6 $43.3
2010 $38.1 $2.1 $4.5 $2.0 $26.7 $85.0
2009 $40.7 $2.6 $4.2 $8.7 $21.7 $72.1
Note: Settlement dollars adjusted for inflation; 2013 doter equivalent figures used.
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 89 of 121
Securities Class Action Settlements-2013 Review and Analysis
7
DAMAGES ESTIMATES AND MARKET CAPITALIZATION LOSSES
"ESTIMATED DAMAGES"
For purposes of this research and prior Cornerstone Research reports on securities class action settlements, these analyses use simplified calculations of shareholder losses, referred to as "estimated damages? Application of this consistent method allows for the identification and analysis of potential trends. "Estimated damages" are not necessarily linked to the allegations included in
the associated court pleadings. 4 Accordingly, damages estimates presented in this report are not intended to be indicative of actual economic damages
borne by shareholders.
• Average "estimated damages" for 2013 were the third highest in the
post-Reform Act era, due in part to a small number of extremely large cases, two of which related to the credit crisis.
• The decline in median "estimated damages" was likely a major factor contributing to the substantially lower median settlement in 2013
relative to 2012.
Median "estimated
damages" for 2013 declined 48 percent from 2012.
FIGURE 6: MEDIAN AND AVERAGE '"ESTIMATED DAMAGES"
2004-2013
(Dollars in Millions)
$8,681
• Median "Estimated Damages"
io Average "Estimated Damages"
$2,804 $2,882
$43; $43n $47
_cn -
2004 2005 2006
$5,680
$4,274 2008-2012
a3 174 Median "Estimated Damages"
- ($434)
$2136 $2352
$2037 $2
$27 "1
2007 2008 2009 2010 2011 2012 2013
Note: 'Estimated damages' are adjusted for inflation based on class period end dales.
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02127/2015 Page 90 of 121
Securities Class Action Settlements-2013 Review and Analysis
"ESTIMATED DAMAGES" continued
• In 2013, the median settlement as a percentage of "estimated damages' rebounded slightly from a historic low of 1.8 percent in 2012.
• Median settlements as a percentage of "estimated damages" remained relatively low compared to levels observed over the past decade. Two factors contributed to this: the increased number of extremely large cases and the presence of credit crisis cases.
- Traditionally, cases with large "estimated damages" have settled for a smaller proportion of those damages.
- For credit crisis cases settled in 2013, the median settlement as a percentage of "estimated damages" was 0.7 percent, compared with 2,3 percent for all other cases settled in 2013.
Settlements as a
percentage of
"estimated
damages"
observed over the
last three years are
the lowest in the
past decade.
FIGURE 7: MEDIAN SETTLEMENTS AS A PERCENTAGE OF "ESTIMATED DAMAGES" 2004-2013
3.1%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 91 of 121
Securities Class Action Settlements-2013 Review and Analysis
"ESTIMATED DAMAGES" continued
• Settlement amounts are generally larger when "estimated damages" are
larger. Yet, as previously mentioned, settlements as a percentage of
"estimated damages' tend to be smaller when "estimated damages" are
larger.
• In 2013, relatively small cases—those with "estimated damages" of less
than $50 million—had a median settlement as a percentage of
"estimated damages" of 15.1 percent, compared with 2.1 percent for all
2013 settlements.
In 2013, smaller cases settled at a much higher percentage of "estimated damages."
FIGURE 8: MEDIAN SETTLEMENTS AS A PERCENTAGE OF "ESTIMATED DAMAGES" BY DAMAGES RANGES 1996-2013 (Dollars in Millions)
15.1%
n2013
w1996-2012
7%
5.3% 4.5
It Total Sample Less Than $50 $504124
3.6%
2.4%
2.00/, 1.0% 1,2%1.2% 1 .2%10%
$1254249 $250-$499 $5004999 $1,000-$4,999 $5,000 or Greater
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 92 of 121
Securities Class Action Settlements-2013 Review and Analysis
DISCLOSURE DOLLAR LOSS
Disclosure Dollar Loss (DDL) is another simplified measure of shareholder
losses and an alternative measure to "estimated damages." DDL is calculated
as the decline in the market capitalization of the defendant firm from the
trading day immediately preceding the end of the class period to the trading
day immediately following the end of the class period. 6
• In contrast to the median DDL, average DDL increased 44 percent from
2012 to $1.8 billion, reflecting the influence of a few very large cases.
• The median market capitalization at the time of settlement for issuers
in the top 10 percent of DDL was dramatically higher than the median
market capitalization for the next tier of DDL ($133.8 billion compared
with $9.2 billion).
• The relationship between settlements and DDL is similar to that
between settlements and "estimated damages"—settlements are larger
when DDL is larger, yet settlements as a percentage of DDL are
generally smaller when DDL is larger.
im
The median DDL
associated with
settled cases in
2013 decreased
45 percent
from 2012.
FIGURE 9: MEDIAN AND AVERAGE DISCLOSURE DOLLAR LOSS 2004-2013 (Dollars in Millions)
$2,831
$1,087
$770 $770
)J$17j$l 411
2007 2008 2009
• Median DDL
• Average DDL
$1,255
$580
$449
j 2111$122 ¶11 !
2010 2011 2012
$1,811
2013
$809
$876
j$134J$1 30
2004 2005 2006
Note: D0L adjusted for inflation based on class period end dates.
Case 9:13-cv-80923-KLR Document 1334 Entered on FLSD Docket 02/2 7/2015 Page 93 of 121
Securities Class Action Settlements-2013 Review and Analysis
IL
TIERED ESTIMATED DAMAGES
The landmark decision in 2005 by the U.S. Supreme Court in Dura Pharmaceuticals Inc. v. Braude (Dura) determined that plaintiffs must show
a causal link between alleged misrepresentations and the subsequent actual
losses suffered by plaintiffs. As a result of this decision, damages cannot be
associated with shares sold before information regarding the alleged fraud
reaches the market. Accordingly, this report considers the influence of Dura
on securities class action damages calculations by exploring an alternative
measure of damages in settlements research. This alternative measure, referred
to here as tiered estimated damages, is based on the stock-price drops on
alleged corrective disclosure dates as described in the plan of allocation for the
settlement. 7 It utilizes a single value line when there is only one alleged
corrective disclosure date (at the end of the class period) or a tiered value line
when there are multiple alleged corrective disclosure dates.
This alternative measure has been calculated for a subsample of cases settled
after 2005. As noted in past reports, tiered estimated damages has not yet
surpassed the traditional measure of "estimated damages" used in this series of
reports in terms of its power as a predictor of settlement outcomes. However, it is
highly correlated with settlement amounts and provides an alternative measure
of investor losses for more recent securities class action settlements.
FIGURE 10: TIERED ESTIMATED DAMAGES 2006-2013 (Dollars in Millions)
•Median Tiered Estimated Damages 100/1 • Median "Estimated Damages" I
9%
Median Settlements as a Percentage of S
"Estimated Damages" - -
-
I ii_iTitti I 2007 2008 2009 2010 2011 2012 2013
8%
7%
6%
5%
4%
3%
2%
1%
0%
$700
$600
$500
$400
$300
$200
$100
$0 2006
Median Settlements as a Percentage of
Tiered Estimated Damages
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 94 of 121
Securities Class Action Settlements-2013 Review and Analysis
12
ANALYSIS OF SETTLEMENT CHARACTERISTICS
NATURE OF CLAIMS
• The number of cases settled in 2013 involving only Section 11 and/or Section 12(a)(2) claims is consistent with the increased activity in the U.S. IPO market in recent years. 8 There were eight such cases in 2013 compared with only four in 2012.
• The median settlement as a percentage of "estimated damages" is
higher for cases involving only Section 11 and/or Section 12(a)(2) claims compared with cases involving only Rule 1 Ob-5 claims,
"Estimated
damages" are
typically smaller
for cases
involving only
Section 11 and/or
Section 12(a)(2)
claims.
FIGURE 11: SETTLEMENTS BY NATURE OF CLAIMS 1996-2013 (Dollars in Millions)
Median Median Settlements
Number of Median "Estimated as a Percentage of Settlements Settlements Damages" "Estimated Damages"
80 $3.4 $46.7 7.4%
246 $11.7
$402.3
3.4%
1,049 $6.8
$272.2
2.9%
1,376 $7.0
$257.1
3.1%
Section 11 and/or 12(a)(2) Only
Both Rule 10b-5 and Section 11 and/or 12(a)(2)
Rule lob-S Only
All Post–Reform Act Settlements
CAM' Allegations
3.2%
No CAM'
Allegations
3.1% -
N=825
N=551 N=446 N=930 N=95 N=1 281
Restatement
3.7% No Restatement
2.9%
writing larities
1%
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/2 7/2015 Page 95 of 121
13 Securities Class Action Settlements-2013 Review and Analysis
ACCOUNTING ALLEGATIONS
This research examines three types of accounting allegations among settled
cases: (1) alleged GAAP violations, (2) restatements, and (3) reported
accounting irregularities. 9
• Cases involving accounting allegations are typically associated with
higher settlement amounts and higher settlements as a percentage
of "estimated damages."
• Cases alleging GAAP violations settled for only a slightly higher
percentage of "estimated damages" than cases not alleging GAAP
violations.
• Restatement cases settled for a higher percentage of estimated
damages" compared with GAAP cases not involving restatements.
• In 2013, 55 percent of settled cases alleged GAAP violations,
21 percent were associated with restatements, while only 4 percent
involved reported accounting irregularities.
The proportion of
settled cases in 2013 involving accounting allegations dipped to a ten-year low.
• Although relatively few settlements in 2013 involved reported
accounting irregularities, these cases settled for a much larger
percentage of "estimated damages" compared with cases not involving
accounting irregularities.
FIGURE 12: MEDIAN SETTLEMENTS AS A PERCENTAGE OF "ESTIMATED DAMAGES" AND ACCOUNTING ALLEGATIONS 1996-2013
Accounting Irregularities
4.6%
Case 9:13-cv-80923-KLR Document 1334 Entered on FLSD Docket 02/2 7/2015 Page 96 of 121
Securities Class Action Settlements-2013 Review and Analysis
14
THIRD-PARTY CODEFENDANTS
• Third parties, such as an auditor or an underwriter, are often named as
codefendants in larger, more complex cases and provide an additional
source of settlement funds.
• Outside auditor defendants are often associated with cases involving
restatements of financial statements or alleged GAAP violations, while
the presence of underwriter defendants is highly correlated with the
inclusion of Section 11 claims.
• In 2013, 32 percent of accounting-related cases had a named auditor
defendant, while 76 percent of cases with Section ii claims had a
named underwriter defendant.
Cases with third-
party codefendants
have higher
settlements as a
percentage of
"estimated
damages."
FIGURE 13: MEDIAN SETTLEMENTS AS A PERCENTAGE OF "ESTIMATED DAMAGES" AND THIRD-PARTY CODEFENDANTS 1996-2013
Underwriter Named
5.3%
Auditor Named
4.0% No Auditor Named
30%
No Underwriter
Named
2.9%
N=226 N=1,150 N=206 N=1,170
Case 9:13-cv-80923-KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 97 of 121
Securities Class Action Settlements-2013 Review and Analysis
15
INSTITUTIONAL INVESTORS
• Since 2006, more than half of the settlements in any given year have
involved institutional investors as lead plaintiffs.
• Among institutional investors, public pensions are the most active,
involved as lead plaintiffs in over 55 percent of settlements with an
institutional investor lead plaintiff since 2006.
• In 2013, public pensions served as a lead plaintiff in 43 percent of
settled cases, slightly lower than in 2012 (47 percent), but nearly four
times the 2004 figure (12 percent).
• The median settlement in 2013 for cases with a public pension as a
lead plaintiff was $23 million, compared with $3 million for cases without
a public pension as a lead plaintiff.
The presence of a
public pension as
a lead plaintiff is
associated with
higher settlements.
FIGURE 14: MEDIAN SETTLEMENT AMOUNTS AND PUBLIC PENSIONS 2004-2013 (Dollars in Millions)
$204 Public Pension as Lead Plaintiff
no No Public Pension as Lead Plaintiff
Percentage of Settlements with Public Pension as Lead PIainff 40%
38%
33%
$86
22%
L14%12%]
8 $8[$6 $21
2004 2005 2006 2007 2008
Note: Settlement dollars adjusted for inflation: 2013 dollar equivalent figures used.
$16 — $7
•J
$18 $19
JL6 %11
2010 2011
$22 $23
2012 2013
47%
43%
'ii..
2011 2012 1 1 2006 2007 2008
40 33 .i.
II
2005
2
2009 2010
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/2 7/2015 Page 98 of 121
Securities Class Action Settlements-2013 Review and Analysis
DERIVATIVE ACTIONS
• "Estimated damages" for cases with accompanying derivative actions
are typically higher compared to cases with no identifiable derivative
action."
• In 2013, 40 percent of settled cases were accompanied by derivative
actions, compared with 53 percent of settled cases in 2012, and
32 percent of settled cases in prior post ReformAct years.
• In recent years, cases in the sample have included far fewer
simultaneous class and derivative settlements than in prior years. 11
In fact, during 2013, only two securities class actions settled
simultaneously with the related derivative action.
Settlement
amounts for
class actions
accompanied by
derivative actions
are significantly
higher.
FIGURE 15: FREQUENCY OF DERIVATIVE ACTIONS 2004-2013
• Settlements with a companion Derivative Action
• Settlements without a companion Derivative Action
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/2 7/2015 Page 99 of 121
17 Securities Class Action Settlements-2013 Review and Analysis
CORRESPONDING SEC ACTIONS
Cases that involve a corresponding SEC action (evidenced by the filing of a
litigation release or administrative proceeding prior to the settlement of the
class action) are associated with significantly higher settlement amounts and
have higher settlements as a percentage of estimated damages." 12
• In 2013, 19 percent of settled cases involved a corresponding SEC
action, compared with 21 percent in 2012, and 23 percent of settled
cases in prior post–Reform Act years.
• The median settlement for cases with an SEC action among all post–
Reform Act years ($12.9 million) was more than two times the median
settlement for cases without a corresponding SEC action.
• Record enforcement activity by the SEC in 2011 and 2012 was followed
by a modest decrease in 2013.13 SEC enforcements focus on a large
scope of allegations, beyond those that may be included in the types of
cases examined in this report. However, the SEC is placing sufficient
emphasis on disclosure-related fraud and securities offerings such that
the rate of securities class action settlements with corresponding SEC
actions may increase. 14
The recent decline
in corresponding SEC actions may result from the reported slowdown in financial fraud investigations by the SEC during 2008-2010.
FIGURE 16: FREQUENCY OF SEC ACTIONS 2004-2013
2009
• Settlements with a Corresponding SEC Action
• Settlements without a Corresponding SEC Action
'A$1Itl
U
2007
i 2008
El
2010 2011
U I
2005 2006
II
2012 2013
Case 9:13-cv-80923-KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 100 of 121
Securities Class Action Settlements-2013 Review and Analysis ii;]
COMPARISON OF SETTLEMENT CHARACTERISTICS BY SIZE
Several of the characteristics highlighted in this report are more prevalent for larger cases than smaller cases. For example, among the small proportion of post–Reform Act cases that settled for more than $50 million, 63 percent had a companion derivative action and 52 percent involved a third party as a codefendant. However, for the vast majority of cases in the sample that settled for less than $50 million, only 29 percent had a companion derivative action and only 24 percent involved a third-party as a codefendant. Settlements of
$50 million or • In addition, 57 percent were associated with GAAP allegations,
compared with 79 percent for larger cases.
• 16 percent had a public pension as a lead plaintiff, compared with 62 percent for larger cases.
lower are far less
likely to involve
corresponding
SEC actions or
public pensions as
lead plaintiffs.
FIGURE 17: COMPARISON OF SETTLEMENT CHARACTERISTICS BY SIZE 2004-2013
Named Corresponding Accompanying GAAP Third-Party
SEC Action Derivative Action Allegations codefendant
$50 Million or Less
19%
29%
57% 24%
More Than $50 Million 54% 63%
79% 52%
Public Pension as Lead Plaintiff
16%
62%
.1
-Il
Wore Thai: 5 Yews
$12.5
3-4 Years 4-5 Years
$13.1 •2013
•2008-2012
r
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 101 of 121
Securities Class Action Settlements-2013 Review and Analysis ipJ
TIME TO SETTLEMENT
Less Than 2 Years 2-3 Years
• Overall, the average time to reach settlement (as measured by the
settlement hearing date) has been higher in recent years compared with the early post-Reform Act period.
• However, despite the longer settlement resolutions in recent years, in 2013, a substantial portion of settlements (37 percent) were resolved within 30 months of filing, the highest proportion in the past decade.
• Larger cases (as measured by estimated damages") and cases
involving larger firms tend to take longer to reach settlement.
In 2013, the
median time to
settlement was
3.2 years.
FIGURE 18: MEDIAN SETTLEMENTS BY DURATION FROM FILING DATE TO SETTLEMENT HEARING DATE 2008-2013 (Dollars in Millions)
Stage 1 Stage 2 Stage 3
3.1%
27%
Stage 2 Stage 3
$7.1 .,
$6.6
3.9%
Stage 1
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 102 of 121
20 Securities Class Action Settlements-2013 Review and Analysis
LITIGATION STAGES
Advancement of cases through the litigation process may be considered an
indication of the merits of a case (e.g., surviving a motion to dismiss) and/or
the time and effort invested by the plaintiff counsel. This report studies three
stages in the litigation process:
Stage 1: Settlement before the first ruling on a motion to dismiss
Stage 2: Settlement after a ruling on motion to dismiss, but before a
ruling on motion for summary judgment
Stage 3: Settlement after a ruling on motion for summary judgment"
• Settlement amounts tend to increase as litigation progresses.
• Cases settling in Stage 1 settled for the highest percentage of
"estimated damages," while there was only a small difference in the
percentage between cases settling in Stage 2 versus Stage 3.
• Larger cases tend to settle at more advanced stages of litigation and
tend to take longer to reach settlement. Through 2013, cases reaching
Stage 3 had median "estimated damages" of more than three and a half
times the median "estimated damages" of cases settling in Stage I.
Settlements
occurring early in
the litigation
process have
smaller "estimated
damages."
FIGURE 19: LITIGATION STAGES 1996-2013 (Dollars in Millions)
Median Settlements
Median Settlements as a Percentage $13.0 of "Estimated Damages'
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 103 of 121
Securities Class Action Settlements-2013 Review and Analysis
The financial industry continues to rank the highest in median settlement value across all post—Reform Act years. However, industry sector is not a significant determinant of settlement amounts when controlling for other variables that influence settlement outcomes (such as "estimated damages, asset size, and the presence of third-party codefendants).
• Resolution of credit crisis—related cases has comprised a large portion of settlement activity in the financial sector in recent years—.22 percent of settlements in 2013,30 percent in 2012, and 18 percent in 2011.
• The next most prevalent sectors, in terms of the number of cases settled in 2013, were pharmaceuticals (18 percent) and technology (9 percent). In comparison, pharmaceuticals and technology comprised 6 percent and 24 percent, respectively, of cases settled during 1996 through 2012.
• The shift of settled cases to the pharmaceutical sector is consistent with the larger share of filing activity in the consumer non-cyclical sector (which includes healthcare, biotechnology, and pharmaceutical companies, among others) observed in recent years.
21
The proportion of sealed cases involving pharmaceutical firms was higher in 2013 relative to prior years.
FIGURE 20: SETTLEMENTS BY SELECT INDUSTRY SECTORS 1996-2013 (Dollars in Millions)
Industry
Financial
Telecommunications
Pharmaceuticals
Healthcare
Technology
Retail
Number of Median Settlements Settlements
169
$12.5
141
8.0
94
8.1
56
6.3
324
6.0
117
5.8
Median "Estimated Damages"
$575.4
340.6
434.0
212.1
236.7
171.0
Median Settlements as a Percentage
of "Estimated Damages"
3.1%
2.4%
2.2%
3,5%
3.0%
4.3%
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 104 of 121
Securities Class Action Settlements-2013 Review and Analysis
FEDERAL COURT CIRCUITS
• The highest concentration of settled cases in the Ninth Circuit in 2013 was in the technology and pharmaceutical sectors, each representing 9 percent of all cases. In prior post-Reform Act years, 38 percent of cases in this circuit involved technology firms, while only 6.5 percent related to pharmaceuticals.
• The number of docket entries can illustrate the complexity of a case and is correlated with the length of time from filing to settlement. Interestingly, the Second Circuit, one of the most active circuits, reports a median number of docket entries that ranks among the lowest.
• Generally, settlement approval hearings are held within four to seven months following the public announcement of a tentative settlement.
The Second and
Ninth Circuits
continue to lead
the other circuits
in number of
settlements.
FIGURE 21: SETTLEMENTS BY FEDERAL COURT CIRCUIT
2009-2013 (Dollars in Millions)
Circuit
First
Second
Third
Fourth
Fifth
Sixth
Seventh
Eighth
Ninth
Tenth
Eleventh
DC
Number of Settlements
11
95
34
14
19
16
22
8
110
9
19
2
Median Number of
Docket Entries
104
123
144
183
168
116
158
178
167
180
154
603
Median Duration from Tentative Settlement to Approval Hearing
(in months)
7.3
6.5
5.8
4.3
5.2
4.0
4.8
5.9
6.0
6.4
5.5
4,9
Median Settlements
$6.0
$11.4
$10.1
$8.8
$6.5
$13.6
$6.2
$6.5
$8.0
$7.5
$6.3
$83.3
Median Settlements as a Percentage of "Estimated
Damages"
2.7%
2.4%
2.4%
1.8%
1.6%
4,1%
2.5%
4.0%
2.3%
3.4%
2.1%
3.7%
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 105 of 121
Securities Class Action Settlements-2013 Review and Analysis
23
CORNERSTONE RESEARCH'S SETTLEMENT PREDICTION ANALYSIS
Characteristics of securities cases that may affect settlement outcomes are often correlated. Regression analysis makes it possible to examine the effects of these factors simultaneously. As part of this ongoing analysis of securities class action settlements, regression analysis was applied to study factors associated with settlement
outcomes. Based on this research sample of post–Reform Act cases settled through December 2013, the variables that were important determinants of settlement amounts included the following:
• "Estimated damages'
• Disclosure Dollar Loss (DDL)
• Most recently reported total assets of the defendant firm
• Number of entries on the lead case docket
• The year in which the settlement occurred
• Whether the issuer reported intentional misstatements or omissions in financial statements
• Whether a restatement of financials related to the alleged class period was announced
• Whether there was a corresponding SEC action against the issuer, other defendants, or related parties
• Whether the plaintiffs named an auditor as codefendant
• Whether the plaintiffs named an underwriter as codefendant
• Whether a companion derivative action was filed
• Whether a public pension was a lead plaintiff
• Whether noncash components, such as common stock or warrants, made up a portion of the settlement fund
• Whether the plaintiffs alleged that securities other than common stock were damaged
• Whether criminal charges/indictments were brought with similar allegations to the underlying class action
Whether Section 11 claims accompanied Rule lOb-S claims
Whether the issuer traded on a nonmajor exchange
Settlements were higher when "estimated damages," DDL, defendant asset size, or the number of docket entries were larger. Settlements were also higher in cases involving intentional misstatements or omissions in financial statements reported by the issuer, a restatement of financials, a corresponding SEC action, an underwriter and/or auditor named as codefendant, an accompanying derivative action, a public pension involved as lead plaintiff, a
noncash component to the settlement, filed criminal charges, or securities other than common stock alleged to be damaged. Settlements were lower if the settlement occurred in 2004 or later, and if the issuer traded on a nonmajor exchange.
While the primary approach of these analyses is designed to better understand and predict the total settlement amount, these analyses also are able to estimate the probabilities associated with reaching alternative settlement levels. These probabilities can be useful analyses for clients in considering the different layers of insurance coverage available and likelihood of contributing to the settlement fund. Regression analysis can also be used to
explore hypothetical scenarios, including but not limited to the effects on settlement amounts given the presence or absence of particular factors found to significantly affect settlement outcomes.
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 106 of 121
Securities Class Action Settlements-2013 Review and Analysis
RESEARCH SAMPLE
• The database used in this report focuses on cases alleging fraudulent inflation in the price of a corporation's common stock (i.e., excluding cases with alleged classes of only bondholders, preferred stockholders, etc., and excluding cases alleging fraudulent depression in price).
• The sample is limited to cases alleging Rule 10b-5, Section ii, and/or Section 12(a)(2) claims brought by purchasers of a corporation's common stock. These criteria are imposed to ensure data availability and to provide a relatively homogeneous set of cases in terms of the nature of the allegations.
• The current sample includes 1,396 securities class actions filed after passage of the Reform Act (1995) and settled from 1996 through 2013. These settlements are identified based on a review of case activity collected by Securities Class Action Services LLC (SCAS). 47
• The designated settlement year, for purposes of this report, corresponds to the year in which the hearing to approve the settlement was held. 18
cases involving multiple settlements are reflected in the year of the most recent partial settlement, provided certain conditions are met. 19
DATA SOURCES
In addition to SCAS, data sources include Dow Jones Factiva, Bloomberg, Center for Research in Security Prices (CRSP) at University of Chicago Booth School of Business, Standard & Poor's Compustat, court filings and dockets, SEC registrant filings, SEC litigation releases and administrative proceedings, LexisNexis, and public press.
Case 9:13-cv-80923-KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 107 of 121
Securities Class Action Settlements-2013 Review and Analysis
25
ENDNOTES
1 See Securities Class Action Filings-2013 Year in Review) cornerstone Research, 2014. This report, Securities Class Action Settlements-2013 Review and Analysis, excludes merger and acquisition cases since those cases do not meet the sample criteria.
2 See Investigations and Litigation Related to Chinese Reverse Merger Companies, cornerstone Research, 2011; and Securities Class Action Filings-2013 Year in Review) cornerstone Research, 2014.
For further discussion and case details for subprime credit crisis mailers ) see the D&O Diary at www.dandodiary.com .
The simplified estimated damages" model is applied to common stock only. For all cases involving Rule 10b-5 claims, damages are calculated using a market-adjusted, backward-pegged value line. For cases involving only Section Il and/or Section 12(a)(2) claims ) damages are calculated using a model that caps the purchase price at the offering price. Volume reduction assumptions are based on the exchange on which the issuer's common stock traded. Finally, no adjustments for institutions, insiders, or short sellers are made to the underlying float.
Twenty settlements out of the 1,398 cases in the sample were excluded from calculations involving "estimated damages" due to stock data availability issues. The WorldCom settlement was also excluded from these calculations because most of the settlement in that matter related to liability associated with bond offerings (and this research does not compute damages related to securities other than common stock).
DDL captures the price reaction—using closing prices—of the disclosure that resulted in the first filed complaint. This measure does not incorporate additional stock price declines during the alleged class period that may affect certain purchasers' potential damages claims. Thus, as this measure does not isolate movements in the defendant's stock price that are related to case allegations, it is not intended to represent an estimate of investor losses. The DDL calculation also does not apply a model of investors' share-trading behavior to estimate the number of shares damaged.
The dates used to identify the applicable inflation bands may be supplemented with information from the operative complaint at the time of settlement.
See Securities class Action Filings-2013 Year in Review, cornerstone Research, 2014- Annual U.S. IPO activity in 2010-2012 was significantly higher than in 2008-2009.
The three categories of accounting allegations analyzed in this report are: (1) GAAP violations—cases with allegations involving Generally Accepted Accounting Principles (GA.AP); (2) restatements—cases involving a restatement (or announcement of a restatement) of financial statements; and (3) accounting irregularities—cases in which the defendant has reported the occurrence of accounting irregularities (intentional misstatements or omissions) in its financial statements.
10 This is true whether or not the settlement of the derivative action coincides with the settlement of the underlying class action, or occurs at a different time.
Typically, the resolution of derivative suits lags settlement of an accompanying class action. The common practice of seeking a stay in a parallel derivative suit contributes to this lag in the resolution of derivative suits when compared with accompanying class actions.
12 It could be that the merits in such cases are stronger, or simply that the presence of an accompanying SEC action provides plaintiffs with increased leverage when negotiating a settlement.
13 "SEC Announces Enforcement Results for FY 2013," SEC press release, December 17, 2013, http:I/w.sec.govINewsIPressRelease/Detail/PressReleaseI1 37054050361 7#.UrCAJJUeuI.
14 See Sara E. Gilley and David F. Marcus, Cornerstone Research, "The Changing Nature of SEC Enforcement Actions," Law360, October 8, 2013.
Litigation stage data obtained from Stanford Law School's Securities Class Action Clearinghouse. Sample does not add to 100 percent as there is a small sample of cases with other litigation stage classifications.
16 See Securities Class Action Filings-2013 Year in Review, Cornerstone Research, 2014. 17 Available on a subscription basis.
Movements of partial settlements between years can cause differences in amounts reported for prior years from those presented in earlier reports. Additionally, four cases, omitted from 2012 settlements, were added to the data sample.
19 This categorization is based on the timing of the settlement approval. If a new partial settlement equals or exceeds 50 percent of the then-current settlement fund amount, the entirety of the settlement amount is recategorized to reflect the settlement hearing date of the most recent partial settlement. if a subsequent partial settlement is less than 50 percent of the then-current total, the partial settlement is added to the total settlement amount and the settlement hearing date is left unchanged.
Case 9:13-cv-80923-KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 108 of 121
Securities Class Action Settlements-2013 Review and Analysis
i11'i'Jsi: i *3
Laarni T. Bulan
Ph.D., Columbia University; M.Phil., Columbia University; B.S., University of the Philippines
Laami Bulan is a manager in cornerstone Research's Boston office, where she specializes in finance. She has
consulted on cases related to financial institutions and the credit crisis, municipal bond mutual funds, merger
valuations, insider trading, asset-backed commercial paper conduits, and credit default swaps. Dr. Bulan has
published several academic articles in peer-reviewed journals. Her research covers topics in dividend policy, capital
structure, executive compensation, corporate governance, and real options. Prior to joining Cornerstone Research,
Dr. Bulan was an assistant professor of finance at the International Business School and in the economics department
of Brandeis University.
Ellen M. Ryan
M.B.A., American Graduate School of International Management; BA., Saint Mary's College
Ellen Ryan is a manager in Cornerstone Research's Boston office, where she works in the securities practice.
Ms. Ryan has consulted on economic and financial issues in a variety of cases, including securities class actions,
financial institution breach of contract matters, and antitrust litigation. She also has worked with testifying witnesses in
corporate governance and breach of fiduciary duty matters. Priorto joining cornerstone Research, Ms. Ryan worked for
Salomon Brothers in New York and Tokyo. currently she focuses on post–Reform Act settlement research as well as
general practice area business and research.
Laura E. Simmons
Ph.D., University of North Carolina at Chapel Hill; M.B.A., University of Houston; B.B.A., University of Texas at Austin
Laura Simmons is a senior advisor in Cornerstone Research's Washington, DC, office. She is a certified public
accountant (CPA) and has more than twenty years of experience in accounting practice and economic and financial
consulting. She has focused on damages and liability issues in litigation, as well as on accounting issues arising in a
variety of complex commercial litigation matters. She has served as a testifying expert in cases involving accounting
analyses, securities case damages, research on securities lawsuits, and other issues involving empirical analyses.
Dr. Simmons's research on pre– and post–Reform Act securities litigation settlements has been published in a number
of reports and is frequently cited in the public press and legal journals. She has spoken at various conferences and
appeared as a guest on CNBC addressing the topic of securities case settlements. She has also published in academic
journals, with recent research focusing on the intersection of accounting and litigation. Dr. Simmons was previously an
accounting faculty member at the Mason School of Business at the College of William & Mary. From 1986 to 1991, she
was an accountant with Price Waterhouse.
The authors acknowledge the research efforts and significant contributions of their colleagues at Cornerstone Research. Please direct any questions and requests for additional information to the
settlement database administrator at [email protected] .
Many publications quote, cite, or reproduce data, charts, or tables from Cornerstone Research reports. The authors request that you reference Cornerstone Research in any reprint, quotation,
or citation of the charts, tables, or data reported in this study, and include a link to the report: http://www.cornerstone ,com/Pubtcations/Research/Post—Reform-Act-Settlements
The views expressed in this report are solely those of the authors, who are responsible for the content, and do not necessarily represent the views of Cornerstone Research.
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 109 of 121
Boston 6179273000
Chicago 3123457300
Los Angeles
213553.2500
Menlo Park
550.853.1660
New York
212.605,5000
San Francisco
415.229.8100
Washington
202.912.8900
www.cornerstone.com
452014 by Cornerstone Research. All rights reserved, Cornerstone Research is a registered service mark of Cornerstone Research, Inc. C and design is a registered trademarin of Cornerstone Research, Inc IN
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 111 of 121
FEDERMAN & SHERWOOD (An Association of Attorneys and Professional Corporations)
10205 N. PENNSYLVANIA AVENUE
2926 MAPLE AVENUE, SUITE 200
OKLAHOMA CITY, OKLAHOMA 73120
DALLAS, TEXAS 75201
405 - 235 - 1560
214 - 696 - 1100
FACSIMILE: 405 - 239 - 2112
FACSIMILE: 214 - 740 - 0112
FIRM RESUME
WILLIAM B. FEDERMAN. Education: Boston University (B.A., cum laude, 1979); University of Tulsa (J.D., 1982); Phi Alpha Delta (Treasurer, 1980-1982). Admitted to practice: 1982, Oklahoma, U.S. District Court for the Western District of Oklahoma; 1983, U.S. District Court for the Northern District of Oklahoma, U.S. Court of Appeals, Tenth Circuit; 1985, District of Columbia; 1988, New York, U.S. District Court for the Eastern and Western Districts of Arkansas; 1990, U.S. District Court for the Southern District of New York; 1995, Texas; 1996, U.S. District Court for the Eastern District of Oklahoma; 1998, U.S. District Court for the Southern District of Texas; 1999, U.S. District Court for the Northern District of Texas, U.S. Court of Appeals, Federal Circuit; 2002, U.S. District Court of Colorado, U.S. District Court for the Eastern District of Texas; 2003, U.S. Court of Appeals, Second and Fourth Circuits, U.S. District Court for the Eastern District of New York; 2004, U.S. Court of Appeals, Fifth Circuit; 2005, United States Supreme Court, U.S. District Court for the Western District of Texas, Federal Bar Association; 2006, U. S. Court of Appeals, First and Eleventh Circuits; U.S. District Court for the Northern District of Ohio; 2007, U.S. Court of Appeals, Third Circuit; 2008, U.S. Court of Appeals, Eighth Circuit; 2009, U.S. Court of Appeals, Sixth Circuit; 2010, U.S. Court of Appeals, Seventh Circuit; 2012, U.S. Court of Appeals, Ninth Circuit. Lectures/Publications: "Current Status of Securities Class Actions: Where are the Courts Taking Us?" presented by the Houston Bar Association, 2014. "Class & Derivative Actions and Securities Litigation," presented by the Business and Corporate Litigation Committee at the 2013 Annual Meeting of the American Bar Association; "Litigation and Employment Law Update," presented by the Securities Industry Association Compliance and Legal Division; Inside a Disclosure Crisis, presented at the 30th Annual Northwest Securities Institute Annual Meeting and sponsored by the Washington Bar Association; "Managing Directors' Liability, "presented at the 3rd Annual Energy Industry Directors Conference and sponsored by Rice University; "Executive Liability - 2009 D & 0 Market Trends," presented by Chartis Insurance; "Derivative Actions and Protecting the Corporation - Critical Issues in Today's Banking," presented by the Oklahoma Bar Association and the Oklahoma Bankers Association; "Arbitration - What Is It? Why Should a Lawyer Suggest or Use It," presented by the Oklahoma Bar Association; "The Attorney and Accountant as Targets in Failed Financial Institution Litigation," presented by the American Bar Association Trial Practice Committee; "Effective Arbitration in the 1990's - Adapting to Build a Successful Practice," presented by the Oklahoma County Bar Association; "Current Issues in Direct Investments and Limited Partnerships: The Litigation Scene From All Perspectives," presented by the American Bar Association Litigation Section; "Stockbroker Litigation and Arbitration," presented by the Securities Arbitration Institute; Author of "Who's Minding the Store: The Corporate Attorney-Client Privilege," 52 0. B.J. 1244, 1981; Author, "Potential Liability From Indirect Remuneration in Private Oil and Gas Offerings," 11 Sec. Reg. L.J. 135, 1983; Author, "Capitalism and Reality Meet in the Courts... Finally," 59 0. B.J. 3537, 1987. Member. Arbitration Panel, New York Stock Exchange; Federal Bar Association; Oklahoma County Bar Association (Member, Committee on Professionalism, 1987-1990); Oklahoma, Texas, New York and American Bar Association (Committee on Securities Litigation and Corporate Counsel); The District of Columbia Bar; American Inns of Court (Barrister and Master, 1990-1993, 2002-2004); inducted into the Outstanding Lawyers of America, 2003; received the Martindale-Hubbell peer review rating
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 112 of 121
FEDERMAN & SHERWOOD Page 2
of AV Preeminent in both ethical standards and legal ability; recognized as one of the "Top Lawyers of 2013" for excellence and achievements in the legal community. Concentration: Securities and Shareholder Litigation in all State and Federal Courts, Arbitration and Mediation; Securities (Trial); Securities Due Diligence and Business Law.
STUART W. EMMONS. Education: University of Oklahoma (J.D., 1987, with distinction); University of Oklahoma (B.B.A., Accounting, 1984, with distinction). Admitted to practice: 1987, Oklahoma; 1987, U.S. District Court for the Western District of Oklahoma; 1990, U.S. District Court for the Northern District of Oklahoma; 1992, U.S. Court of Appeals, Tenth Circuit; 1994, U.S. Court of Appeals, Eighth Circuit; U.S. Patent and Trademark Office; 2002, U.S. District Court for the District of Colorado; U.S. District Court for the Southern District of Texas; 2003, U.S. Court of Appeals, Second Circuit, U.S. Court of Appeals, Fourth Circuit; 2004, U.S. District Court for the Northern District of Texas; U.S. Court of Appeals, Fifth Circuit; 2005, United States Supreme Court. 1988-1989, Law Clerk to the Hon. Layn R. Phillips, U.S. District Court for the Western District of Oklahoma. Member Oklahoma County and Oklahoma Bar Associations.
AMY H. WELLINGTON. Education: Vanderbilt University (B.A. 1976); Oklahoma City University (J.D. 1982); Southern Methodist University (LL.M. 1983). Admitted to Practice: 1982, Oklahoma; 1996, U.S. District Court for the Western District of Oklahoma; Law Clerk to the Hon. Fred Daugherty, U.S. District Court for the Western District of Oklahoma, 1984-1997. Member: Oklahoma County Bar Association; Oklahoma Bar Association.
SARA E. COLLIER. Education: Oklahoma Christian University (B.S. 2000); Oklahoma City University School of Law (J.D. 2004). Admitted to practice: 2005, Oklahoma; 2005, U.S. District Courts for the Western, Eastern and Northern Districts of Oklahoma; 2007, U.S. District Court for the Southern District of Texas. Member: Oklahoma Bar Association, American Bar Association, Federal Bar Association, American Trial Lawyers' Association. Languages: French.
GREGG J. LYTLE. Education: Oklahoma State University (B.S. Management 2001; Dean's Honor Roll, 2000-2001; University of Tulsa College of Law (J.D. 2005; Dean's Honor Roll, 2005); Admitted to Practice: 2005, Oklahoma; 2005, U.S. District Courts for the Western, Eastern and Northern Districts of Oklahoma; 2013 Texas; 2014, Colorado; Southern District of Texas; 2015, Northern District of Texas. Member. Oklahoma Bar Association, Oklahoma County Bar Association (Young Lawyers Division Board of Directors, 2008-2010), State Bar of Texas, American Bar Association. Recognition: Listed as a Rising Star by Oklahoma Super Lawyers 2010-2014.
A. BROOKE MURPHY. Education: Oklahoma City University (B.A. summa cum laude, 2005; Robert L. Jones Outstanding Senior Paper Award; Women's Leadership Award); University of Oklahoma College of Law (J.D. 2010, with honors; Dean's List, First Amendment Moot Court Team, Assistant Articles Editor of Oklahoma Law Review). Admitted to practice: 2010, Oklahoma; U.S. District Court for the Western District of Oklahoma; U.S. District Court for the Northern District of Texas. Publication: Credit Rating Immunity? How the Hands-Off Approach Toward Credit Rating Agencies Led to the Subprime Credit Crisis and the Need for Greater Accountability, 62 Okla. L. Rev. 735 (2010). Member Oklahoma Bar Association.
KYLE J. ECKMAN. Education: University of Connecticut (B.A. 2007); University of Oklahoma School of Law (J.D. with Honors 2012, Dean's Honor Roll, American Jurisprudence Award -
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 113 of 121
FEDERMAN & SHERWOOD Page 3
Secured Transactions). Admitted to Practice: 2013, Oklahoma; U.S. District Courts, Western and Northern Districts of Oklahoma; 2014, U.S. District Court, Eastern District of Oklahoma. Member: Oklahoma Bar Association.
OF COUNSEL:
JOHN CHARLES SHERWOOD. Born Dallas, Texas. Education: Texas Christian University, (BBA, magna cum laude, 1981); Baylor School of Law (J.D., 1984). Areas of Practice: Litigation. Board Certified: Civil Trial Law, Personal Injury Trial Law, Texas Board of Legal Specialization. Organizations: Texas Trial Lawyers, Association of Trial Lawyers of America, Dallas Trial Lawyers Association, Dallas Bar Association, Former Chairperson of the Solo and Small Firm Section of the Dallas Bar Association (1999), Member of the College of the State Bar of Texas, and founding President of Citizens For a Fair Judiciary (Political Action Committee). Licenses and Courts of Practice: Member of the State Bar of Texas, National Board of Trial Advocacy, Licensed as a Certified Public Accountant by the Texas State Board of Public Accountancy, admitted to practice before the United States Tax Court, United States District Court, Northern District of Texas, United States Fifth Circuit Court of Appeals, and the United States Supreme Court. Papers Presented: Other People's Money, Presented to the Dallas Bar Association, Solo and Small Firm Section; Recognition: "Top Attorneys in Texas, Business Litigation," (2012).
PARALEGALS:
NANCY G. BEATTY. Ms. Beatty has over thirty years of legal experience. She primarily works on coordinating and administrating of class action product liability and other complex litigation. Ms. Beatty has served on several professional advisory boards in Oklahoma and Tennessee.
SHARON J. KING. Ms. King has worked in the legal community for over ten years, after having worked in the securities and insurance industry for over fifteen years. She primarily works on insurance bad faith, personal injury, wrongful death and civil litigation.
ROBIN K. HESTER. Ms. Hester has been a litigation legal assistant since 1983. Before joining Federman & Sherwood, Ms. Hester was a litigation case manager handling over 150 securities and civil litigation cases and managing 5 legal assistants. She primarily works in securities and civil litigation, as well as providing technology support for the firm.
FRANDELIND V. TRAYLOR. Ms. Traylor has worked in the legal community for over twelve years. She attended the University of Central Oklahoma, where she majored in liberal arts and was on the Dean's Honor Roll. She provides class action, securities litigation and product liability support for the firm.
ALLICIA D. BOLTON. Ms. Bolton has worked in the legal profession for over nine years. She has experience in a wide area of the law, including real estate and corporate law. Ms. Bolton provides securities and complex litigation support for our firm.
L\EIRM\ResumeEedermanSheniood\Resume Fedemie
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 116 of 121
The Securities Law Firm of Menzer & Hill, P.A. (the "Firm") devotes its practice to the arbitration and
litigation of securities-related matters. To that end, the Firm concentrates its practice on assisting
aggrieved investors who have lost money with investments that failed because of fraud, negligence,
mismanagement, or other misconduct by broker-dealers, stockbrokers, and other investment advisors
and professionals.
The Firm's attorneys offer experience in arbitrating and litigating complex securities-related matters,
including securities class and individual actions in state and federal court; arbitrations through the
Financial Industry Regulatory Authority ("FINRA"); and regulatory investigations and enforcement
actions at the state and federal level.
MICHAEL S. HILL Co-
Michael Hill's securities industry expertise is rooted from his experience as a licensed stock broker
and insurance agent, and later, as brokerage executive. As a brokerage executive, Mr. Hill served
as Chief Compliance Officer for two publicly-traded broker-dealers, the last of which also as Chief
Counsel. The Chief Compliance Officer is a FINRA-mandated position with the responsibilities of
enforcing industry rules and regulations and being overall responsible for broker and broker-dealer
conduct in dealing with investors. Though most brokers were compliant. Mr. Hill experienced and
had to handle many instances when brokers had crossed the line and investors suffered financial
loss, as a result. As an attorney with that unique experience, Mr. Hill changed sides and now
represents investors.
Mr. Hill, who focuses his practice in securities arbitration and litigation, earned his bachelor's degree
in mechanical engineering and officer's commission in the U.S. Army from the United States Military
Academy at West Point, New York, in 1990. Later. after many years' experience in the securities
brokerage industry. Mr. Hill earned his Juris Doctor from Nova Southeastern University, Shepard
Broad Law Center, where he earned top awards for his performance in Securities Regulation &
Corporations course work.
Mr. Hill is admitted to practice law in Florida and before arbitration nationwide and overseas, has
extensive experience in securities arbitration, has handled many cases, having served as a FINRA
arbitrator, panel chairman, and as counsel and representative for brokerage firms.
Mr. Hill is also frequent guest speaker on securities arbitration at Nova Southeastern University, Shepard Broad Law Center's Alternative Dispute Resolution Clinic and has served on several compliance and regulatory conference panels with FINRA and industry trade conventions. Mr. Hill has held series 3,4, 7, 9, 10, 14, 24, 53, 55 and 63 registrations, is also a Certified Financial Planner, Certified Anti-Money Laundering Specialist, and an inactive US Army reservist with the current rank of Lieutenant Colonel.
1280W PALMETTO PARK ROAD SECURITIES ATTORNEYS AT LAW 561-327-7201 local SUITE #301 N 888-923-9223 toll free BOCA RATON, FLORIDA 33433 561-431-4611 facsimile wv'j',vrnenzer'hi I .com i [email protected]
Case 9:13cv80923KLR Document 1334 Entered on FLSD Docket 02/27/2015 Page 117 of 121
GARY S. MENZER
Co-Founding Partner
Gary S. Menzer received his bachelor's degree from the University of Central Florida and his Juris
Doctor from St. Thomas University School of Law. Mr. Menzer began his career with Morgan
Stanley as a financial advisor and later as a hedge fund trader. Mr. Menzer has held series 7, 31,
55 and 63 registrations. Prior to becoming a Founding Partner in Menzer & Hill, Mr. Menzer served
as Vice President and Corporate Counsel for a publicly- traded broker-dealer. Having served as
Corporate Counsel, Mr. Menzer brings a truly unique perspective and understanding of how broker-
dealers defend against arbitration claims as well as an understanding of the insurance and liability
these brokerage firms face. Mr. Menzer focuses his practice in securities arbitration and litigation.
He also handles employment cases in the securities industry, as well as regulatory inquiries and
investigations by FINRA, on behalf of brokers and financial advisors. Mr. Menzer is admitted to
practice law In Florida and arbitration nationally.
1280W PALMETTO PARK ROAD SECURITIES ATTORNEYS AT LAW 561-327-7201 local SUITE #301 N 888-923-9223 toll free BOCA RATON, FLORIDA 33433 561-431-4611 facsimile wvp,vrnenzerh corn rito@rnerizerhi I corn
a I mu
10-K 1 tiberlysilverformtokjuoe3O2o.htm
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended June 30, 2012
[} TRANSITION REPORT PURSUANT TO SECTION IS OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to
LIBERTY SILVER CORP. (Exact name of registrant as specified in its charter)
Nevada 333-150028 32-0196442
(State or otherjurisdiction of (Commission File Number) (IRS Employer Identification incorporation)
Number) 181 Bay Street, Suite 2330
Toronto, Ontario, Canada, M5J 2T3 (Address of principal executive offices)
Registrant's telephone number, including area code: 888-749-4916
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act [j Yes (X] No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the [ ]Yes [X] No
Indicate by check mark whether the Registrant (I) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [XJ Yes [ ] No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). [X] Yes [ No.
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. I Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and smaller reporting company" in Rule 12b-2 of the Exchange Act.
http://wwwSec.gov/Archives/edgar/data11407583/000 11 3705012000397/libertysilverform... 2/27/2015
Uà1SIàW23KLR Document 1334 Entered on FLSD Docket 02/27/2015 Pçof of 121
Large accelerated filer [] Accelerated filer [] Non-accelerated filer [] (Do not check We smaller reporting company) Smaller reporting company [XJ
Indicate by check mark whether the registrant is a shell company (as defined in Rule l2b-2 of the Exchange Act). [] Yes [X] No
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of the last business day of the registrant's most recently completed second fiscal quarter $58,408,817.
As of September 28, 2012, the Company had 80,710,834 shares issued and outstanding.
http://wwwsec.gov/Archives/edgar/data/1 407583/0001137050120003 97/libertysilverform... 2/27/2015
UWBIIXTA-IM23-KLR Document 133-1 Entered on FLSD Docket 02/27/2015Paft~*(f2%of
The high and low closing prices of our common stock on the Toronto Stock Exchange and the OTC Bulletin Board for the periods indicated below are as follows:
(I) Common stock commenced trading on the TSX on December 22, 2011.
As of September 25, 2012, there were 80,710,834 shares of common stock issued and outstanding held by approximately 29 registered stockholders of record of the Company's common stock.
There have been no cash dividends declared or paid on the shares of common stock, and management does not anticipate payment of dividends in the foreseeable future.
ITEM 6. SELECTED FINANCIAL DATA.
Not Applicable.
ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.
SPECIAL NOTE OF CAUTION REGARDING FORWARD-LOOKING STATEMENTS
CERTAIN STATEMENTS IN THIS REPORT, INCLUDING STATEMENTS IN THE FOLLOWING DISCUSSION, ARE WHAT ARE KNOWN AS "FORWARD LOOKING STATEMENTS", WHICH ARE BASICALLY STATEMENTS ABOUT THE FUTURE. FOR THAT REASON, THESE STATEMENTS INVOLVE RISK AND UNCERTAINTY SINCE NO ONE CAN ACCURATELY PREDICT THE FUTURE, WORDS SUCH AS "PLANS," "INTENDS," "WILL," "HOPES," "SEEKS," "ANTICIPATES," "EXPECTS "AND THE LIKE OFTEN IDENTIFY SUCH FORWARD LOOKING STATEMENTS, BUT ARE NOT THE ONLY INDICATION THAT A STATEMENT IS A FORWARD LOOKING STATEMENT. SUCH FORWARD LOOKING STATEMENTS INCLUDE STATEMENTS CONCERNING OUR PLANS AND OBJECTIVES WITH RESPECT TO THE PRESENT AND FUTURE OPERATIONS OF THE COMPANY, AND STATEMENTS WHICH EXPRESS OR IMPLY THAT SUCH PRESENT AND FUTURE OPERATIONS WILL OR MAY PRODUCE REVENUES, INCOME OR PROFITS, NUMEROUS FACTORS AND FUTURE EVENTS COULD CAUSE THE COMPANY TO CHANGE SUCH PLANS AND OBJECTIVES OR FAIL TO SUCCESSFULLY IMPLEMENT SUCH PLANS OR ACHIEVE SUCH OBJECTIVES, OR CAUSE SUCH PRESENT AND FUTURE OPERATIONS TO FAIL TO PRODUCE REVENUES, INCOME OR PROFITS, THEREFORE, THE READER IS ADVISED THAT THE FOLLOWING DISCUSSION SHOULD BE CONSIDERED IN LIGHT OF THE DISCUSSION OF RISKS AND OTHER FACTORS CONTAINED
18
_____
http://www.Sec.gOV/ArchiVeS/edgar/data!1 407583/00011370501 2000397/libertysilVerform... 2/27/2015