iRhythm Securities Ruling Poised to Shape Who Is Lead Plaintiff

Investors participating in the early stages of securities class actions may need to stay involved if they want to challenge adverse judgments, in the wake of a recent Ninth Circuit decision.

iRhythm Technologies Inc. shareholder, Mark Habelt, filed the proposed class suit but didn’t become lead plaintiff. The divided appeals court panel ruled this month that he was a non-party lacking standing to appeal.

“This situation is quite unusual and interesting,” said David Marcus, a professor at the UCLA School of Law. The issue appears to be one of first impression, he said.

The ruling could affect lead-plaintiff determinations ...