Judge Names Lead Plaintiffs in Securities Case vs. Warner Bros. Discovery
U.S. District Judge Valerie Caproni for Southern New York signed an order Monday (docket 1:22-cv-08171) appointing the Ohio Public Employees Retirement System and the State Teachers Retirement System of Ohio as lead plaintiffs in the Sept. 23 class action alleging…
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violations of the Securities Act stemming from Discovery’s acquisition of WarnerMedia. Caproni’s order also appointed Grant & Eisenhofer as lead counsel for the plaintiffs, and the Office of Ohio Attorney General Dave Yost (R) as additional plaintiffs’ counsel. Yost publicized Caproni’s order in an announcement Wednesday. The class action names Discovery, Warner Bros. Discovery and CEO David Zaslav and Chief Financial Officer Gunnar Wiedenfels as defendants, alleging they withheld negative information about WarnerMedia in the runup to the April 8 closing of the transaction that caused Warner Bros. Discovery shares to plummet 52.4% on the first day of trading “as the market became aware of the foregoing misrepresented and omitted facts.” Among the facts allegedly hidden from investors was that WarnerMedia overstated the number of subscribers to HBO Max by as many as 10 million, by counting as subscribers AT&T customers who had received bundled access to HBO Max but hadn't actually signed up for the service. Caproni’s order lifted the stay on the defendants’ time to answer the complaint. She ordered the parties to submit a joint proposed schedule by Dec. 21 for filing a consolidated amended complaint.