Judge Katherine Forrest
Purported class action plaintiffs alleged that China Automotive Systems Inc. (CAAS), various its officers and directors, and its former auditor made false and misleading statements in securities filings, violating §§10(b) and 20(a) of the Securities Exchange Act and Rule 10b-5 promulgated thereunder. The court denied plaintiffs class certification under Federal Rule of Civil Procedure 23(a) and (b)(3). The named plaintiffs chosen to represent the putative class were subject to unique defenses, thus defeating the necessary adequacy, typicality and predominance. Further, following an evidentiary hearing, the court found that plaintiffs failed to show, by preponderant credible evidence, that the CAAS securities at issue traded in an efficient market—wherein the price of stock reflects all material information. Discussing the factors set out in Cammer v. Bloom the court determined that the market analyses conducted by plaintiffs' expert Kotz were methodologically flawed. The court could not ignore that there were "numerous days" within the class period when news events did not result in a price movement, or statistically significant price movement was not associated with a news event.
