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Securities Fraud Suit Against Silver Wheaton, Deloitte Settled

FEB. 10, 2020

In re: Silver Wheaton Corp. Securities Litigation

DATED FEB. 10, 2020
DOCUMENT ATTRIBUTES

In re: Silver Wheaton Corp. Securities Litigation

In re Silver Wheaton Corp.
Securities Litigation

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

PLAINTIFFS' MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR PRELIMINARY APPROVAL OF SETTLEMENT, PRELIMINARY CERTIFICATION OF SETTLEMENT CLASS, PRELIMINARY APPROVAL OF PLAN OF ALLOCATION, AND APPROVAL OF PLAN TO PROVIDE NOTICE TO CLASS

Laurence M. Rosen, Esq. (SBN 219683)
THE ROSEN LAW FIRM, P.A.
355 S. Grand Avenue, Suite 2450
Los Angeles, CA 90071
Telephone: (213) 785-2610
Facsimile: (213) 226-4684
Email: lrosen@rosenlegal.com
Counsel for Plaintiffs/Class Representatives


TABLE OF CONTENTS

I. INTRODUCTION

II. NATURE OF THE ACTION

III. PROCEDURAL HISTORY

A. Plaintiffs Survive Silver Wheaton Defendants' Motion to Dismiss and Certify a Class

B. Plaintiffs Add Deloitte As a Defendant and Survive Defendants' Second Motions to Dismiss

C. Plaintiffs Negotiate the Settlement Over Two Years and Two Mediations

IV. THE PROPOSED SETTLEMENT WARRANTS PRELIMINARY APPROVAL

A. Plaintiffs and Their Counsel Have Adequately Represented the Class

B. The Proposed Settlement Results From Good Faith Arm's-Length Negotiations by Informed, Experienced Counsel Who Were Aware of the Risks of the Litigation

C. The Relief Provided to the Class Is Adequate

1. The Substantial Benefits for the Class, Weighed Against the Costs, Risks and Delay of Trial and Appeal Support Preliminary Approval

2. Attorneys' Fees

3. The Parties Have No Additional Agreements Besides Opt-Outs

V. THE COURT SHOULD CERTIFY THE SETTLEMENT CLASS

VI. THE PROPOSED PLAN OF ALLOCATION TREATS CLASS MEMBERS FAIRLY

VII.THE PROPOSED FORMS AND METHOD OF PROVIDING NOTICE TO THE CLASS ARE APPROPRIATE AND SATISFY FEDERAL RULE OF CIVIL PROCEDURE 23, THE PSLRA, AND DUE PROCESS

VIII. PROPOSED SETTLEMENT SCHEDULE

TABLE OF AUTHORITIES

Cases

Basic Inc. v. Levinson, 485 U.S. 224 (1988)

Boyd v. Bank of Am. Corp., No. SACV 13-0561-DOC, 2014 WL 6473804 (C.D. Cal. Nov. 18, 2014)

Churchill Vill., L.L.C. v. Gen. Elec., 361 F.3d 566 (9th Cir. 2004)

Deaver v. Compass Bank, No. 13-CV-00222-JSC, 2015 WL 8526982 (N.D. Cal. Dec. 11, 2015)

Graham v. Capital One Bank (USA), N.A., No. SACV13743JLSJPRX, 2014 WL 12579809 (C.D. Cal. July 29, 2014)

Gribble v. Cool Transports Inc., No. CV 06-04863 GAF SHX, 2008 WL 5281665 (C.D. Cal. Dec. 15, 2008)

Hanlon v. Chrysler Corp., 150 F.3d 1011 (9th Cir. 1998)

Hefler v. Wells Fargo & Co., No. 16-CV-05479-JST, 2018 WL 6619983 (N.D. Cal. Dec. 18, 2018)

Hicks v. Stanley, No. 01 CIV. 10071 (RJH), 2005 WL 2757792 (S.D.N.Y. Oct. 24, 2005)

In re Advanced Battery Techs., Inc. Sec. Litig., 298 F.R.D. 171 (S.D.N.Y. 2014)

In re Am. Honda Motor Co., Inc., No. CV06-1301-CAS(PLAX), 2009 WL 1204495 (C.D. Cal. Apr. 17, 2009)

In re Atmel Corp. Derivative Litig., No. C 06-4592 JF (HRL), 2010 WL 9525643 (N.D. Cal. Mar. 31, 2010)

In re BankAtlantic Bancorp, Inc., No. 07-61542-CIV, 2011 WL 1585605 (S.D. Fla. Apr. 25, 2011)

In re Heritage Bond Litig., No. 02-ML-1475-DT(RCX), 2005 WL 1594389 (C.D. Cal. June 10, 2005)

In re Juniper Networks, Inc. Sec. Litig., 264 F.R.D. 584 (N.D. Cal. 2009)

In re NeoPharm, Inc. Sec. Litig., 705 F. Supp. 2d 946 (N.D. Ill. 2010)

In re Oracle Corp. Sec. Litig., 627 F.3d 376 (9th Cir. 2010)

In re Pac. Enterprises Sec. Litig., 47 F.3d 373 (9th Cir. 1995)

In re Puda Coal Sec. Inc., Litig., 30 F. Supp. 3d 230 (S.D.N.Y. 2014)

In re Syncor ERISA Litig., 516 F.3d 1095 (9th Cir. 2008)

In re TFT-LCD (Flat Panel) Antitrust Litig., No. MDL 3:07-MD-1827 SI, 2011 WL 7575004 (N.D. Cal. Dec. 27, 2011)

In re UTStarcom, Inc. Sec. Litig., No. C 04-04908 JW, 2010 WL 1945737 (N.D. Cal. May 12, 2010)

In re Zynga Inc. Sec. Litig., No. 12-CV-04007-JSC, 2015 WL 6471171 (N.D. Cal. Oct. 27, 2015)

Kamakana v. City & Cty. of Honolulu, 447 F.3d 1172 (9th Cir. 2006)

Low v. Trump Univ., LLC, 246 F. Supp. 3d 1295 (S.D. Cal. 2017)

McCurley v. Royal Seas Cruises, Inc., No. 17-CV-00986-BAS-AGS, 2019 WL 3817970 (S.D. Cal. Aug. 14, 2019)

Morris v. Lifescan, Inc., 54 F. App'x 663 (9th Cir. 2003)

Mullane v. Cent. Hanover Bank & Tr. Co., 339 U.S. 306, 70 S. Ct. 652, 94 L. Ed. 865 (1950)

Pataky v. Brigantine, Inc., No. 17-CV-00352-GPC-AGS, 2018 WL 3020159 (S.D. Cal. June 18, 2018)

Rosenburg v. I.B.M., No. CV06-00430PJH, 2007 WL 128232 (N.D. Cal. Jan. 11, 2007)

Salazar v. Midwest Servicing Grp., Inc., No. 17-CV-0137-PSG-KS, 2018 WL 3031503 (C.D. Cal. June 4, 2018)

Weeks v. Kellogg Co., No. CV 09-08102 MMM RZX, 2013 WL 6531177 (C.D. Cal. Nov. 23, 2013)

Zucco Partners, LLC v. Digimarc Corp., 552 F.3d 981 (9th Cir. 2009)

Statutes

15 U.S.C. §78u-4

Rules

Fed. R. Civ. P. 23

Other Authorities

Manual for Complex Litigation, Fourth Ed. (2004)


I. INTRODUCTION

Defendants Silver Wheaton Corp. (“Silver Wheaton” or “Company”), Randy V.J. Smallwood, Peter Barnes, and Gary Brown (“Silver Wheaton Defendants”), and Deloitte LLP (Canada) (“Deloitte”), (collectively, “Defendants”) have agreed to pay $41.5 million to settle all claims in this Action (“Settlement”). The Court should preliminarily approve the Settlement. As part of granting preliminary approval, the Court should also (a) preliminarily approve the proposed settlement class (“Settlement Class”), (b) approve the form, manner, and content of the notice of the settlement to the Settlement Class (“Notice Plan”), (c) preliminarily approve the plan to allocate the settlement proceeds (“Plan of Allocation”), and (d) set relevant dates for disseminating the Notice, for Settlement Class Members to file claims, opt out of, or object to the Settlement, and to set a date for a hearing on final approval of the Settlement.

After four years of discovery and motion practice in the U.S. and Canada, thirteen depositions, and two mediations, Plaintiffs are pleased to present the proposed Settlement for the Court's preliminary approval. The Settlement resulted from extensive litigation, as well as arm's length settlement discussions in two mediations before a respected mediator, Judge Layn R. Phillips (Ret.)

The $41.5 million Settlement is an excellent result. The operative Second Amended Complaint (dkt. # 253) (“Complaint”) charges that Silver Wheaton concealed that a crucial tax position it had taken violated Canadian tax law. The Complaint alleges that markets learned of the risk when Silver Wheaton announced that the Canada Revenue Agency (“CRA”) had reassessed its taxes and penalties in the amount of $567 million. After Plaintiffs filed the Complaint, a Canadian court issued a precedential opinion reversing the CRA's reassessment in a case similar to Silver Wheaton's. And two months later, Silver Wheaton announced that it had settled its own appeal of its reassessment.

The proposed Settlement grants the Class a substantial recovery while avoiding the risks attendant with continued litigation. The Court should preliminarily approve the Settlement.

The Settlement Class has exactly the same definition as the Class the Court has already certified in this Action, but includes Deloitte as it was named as a Defendant after the Court certified the Class. Because nothing has changed to make class treatment improper, the Court should certify the Settlement Class.

The Court should also approve both the Plan of Allocation, as it treats all Settlement Class Members equally, and the Notice Plan, as it complies with all constitutional and statutory requirements.

The Court should grant Plaintiffs' motion in full.

II. NATURE OF THE ACTION

This is a securities class action on behalf of all Persons (including, without limitation, their beneficiaries) who purchased the publicly traded securities of Silver Wheaton on a United States exchange or in domestic U.S. transactions between March 30, 2011 and July 6, 2015, inclusive (“Class Period”), and who did not sell such securities before July 6, 2015 (“Settlement Class”).1 The Settlement Class is already certified as to Silver Wheaton Defendants but not as to Deloitte.

The operative Second Amended Complaint (“Complaint”) alleges that the Silver Wheaton Defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (“Exchange Act”).

The Complaint alleges that accounting rules require recognition or disclosure of a contingent tax liability if such a risk is probable or reasonably possible, respectively. Silver Wheaton took the tax position that it was not subject to Canadian income tax on income deriving from precious metals physically sold by its Cayman Islands subsidiary pursuant to contracts signed by its Cayman Islands subsidiary. Complaint ¶5. During the Class Period, Silver Wheaton Defendants concealed a risk that this tax position would be found unlawful. Complaint ¶¶ 414-66. Defendant Deloitte falsely asserted that in its opinion, the Silver Wheaton financial statements which did not record or disclose the contingent tax liability were materially accurate. E.g. Complaint ¶441. These misrepresentations and omissions violated accounting principles and PCAOB auditing standards and artificially inflated the price of Silver Wheaton's common stock during the Class Period.

The Complaint further alleges that on July 6, 2015, Silver Wheaton disclosed that the CRA had reassessed its taxes for the years 2005-2010, increasing its taxable income by $567 million, and found that Silver Wheaton's tax position did not comply with Canadian law. The disclosure caused Silver Wheaton's stock price to fall by $2.08, or approximately 12%, on July 7. Complaint ¶¶461-62.

Silver Wheaton appealed the reassessment.

III. PROCEDURAL HISTORY

A. Plaintiffs Survive Silver Wheaton Defendants' Motion to Dismiss and Certify a Class

In July 2015, a securities class action was filed on behalf of all persons who purchased or acquired the securities of Silver Wheaton during the Class Period. Lead Plaintiff and lead counsel were duly appointed. Dkt. # 55. Joined by Named Plaintiffs, Lead Plaintiff (collectively, “Plaintiffs”) timely filed his Consolidated Amended Class Action Complaint for Violation of the Federal Securities Laws (“FAC”). Dkt. # 60. Silver Wheaton Defendants timely moved to dismiss the FAC (“First MTD”). Dkt. # 61.

In June 2016, the Court denied the First MTD. Dkt. # 79.

In October 2016, Plaintiffs moved to certify a Class of persons who purchased Silver Wheaton common stock on a United States Exchange or in domestic U.S. transactions during the Class Period, again excluding certain persons linked to Silver Wheaton Defendants. Dkt. # 91. The Parties began class certification depositions in January 2017. Silver Wheaton Defendants ultimately took the depositions of all seven Plaintiffs as well as of Plaintiffs' expert, Dr. Steven Feinstein. Plaintiffs took the deposition of Silver Wheaton Defendants' expert, Dr. Allan W. Kleidon.

In May 2017, after full briefing, the Court certified the Class that Plaintiffs requested. Dkt. # 148.

B. Plaintiffs Add Deloitte As a Defendant and Survive Defendants' Second Motions to Dismiss

The parties began fact discovery even as they completed class discovery. The parties negotiated both a protective order that would govern confidentiality in the case and a protocol governing production of electronically stored information. The parties negotiated the search terms that would be used to identify documents for review.

The parties produced documents pursuant to duly-served Requests for Production of Documents. The Silver Wheaton Defendants would ultimately produce more than 700,000 pages of documents, and Deloitte 50,000 pages of documents. Plaintiffs reviewed and categorized these documents and where appropriate analyzed and placed in the context of this Action. Plaintiffs would also serve 27 interrogatories and 174 requests for admission on Defendants.

Plaintiffs also sought discovery from Silver Wheaton advisors third party PricewaterhouseCoopers LLP (Canada) (“PwC”) and then-third party Deloitte. The Court granted Plaintiffs' opposed motions seeking letters rogatory compelling PwC and Deloitte to produce documents and sit for depositions. Plaintiffs moved to enforce the letters rogatory, ultimately negotiated a favorable resolution with PwC, and at a hearing obtained an order enforcing the letters rogatory against Deloitte. At this point, Deloitte and PwC collectively produced nearly 10,000 pages of documents.

Having received the first batches of the Silver Wheaton Defendants' production, Plaintiffs noticed Silver Wheaton's deposition pursuant to Federal Rule of Civil Procedure 30(b)(6). Silver Wheaton ultimately sat for four days of depositions in September and October 2017. These depositions doubled as the partial depositions of the four individual representatives. Plaintiffs also took the first day of their two-day deposition of PwC, as well as the deposition of former Deloitte partner Amy Cheema, in December 2017 and January 2018, respectively.

Using the information they learned in these document productions and depositions, in February 2018, Plaintiffs moved for leave to file a second amended complaint (“Complaint”) adding Deloitte as a Defendant. Dkt. # 191. Three months later, the Court found good cause to modify the scheduling order to allow them to file their Complaint. Dkt. # 248.

Deloitte and Silver Wheaton then each filed motions to dismiss the Complaint (“Second MTDs”), with a hearing eventually scheduled for December 2018 (“Second MTD Hearing”). Defendants' filing of the Second MTDs automatically reinstated the stay of discovery that is imposed while a motion to dismiss is pending in a securities case. Three months before the Second MTD Hearing, after the Second MTDs were fully briefed, the Tax Court of Canada released a 293-page decision reversing the reassessment issued to a Canadian corporation, Cameco Corporation (“Cameco”), in an action styled Cameco Corp. v. Her Majesty the Queen (“Cameco”). Like Silver Wheaton, Cameco structured its affairs so that its foreign-domiciled subsidiary, and not its Canadian parent, purchased metals from abroad. In finding permissible a taxpayer's attribution of profits from the sale of those metals to the foreign subsidiary for transfer pricing purposes, Cameco was a valuable precedent for Silver Wheaton in its Canadian tax appeal.

Silver Wheaton had timely appealed the Reassessment. Days before the December 2018 Second MTD Hearing, Silver Wheaton publicly disclosed that it had settled the Reassessment appeal with the CRA (“CRA Settlement”). Defendants brought the CRA Settlement to the Court's attention and at the December 2018 hearing, sought leave to file supplemental briefs addressing the CRA Settlement's impact on the Second MTDs. Defendants then filed their supplemental briefs, and Plaintiffs their supplemental opposition. The Court denied the Second MTDs and found that the CRA Settlement was irrelevant to the merits of Plaintiffs' claims “at this juncture.” Dkt. # 434 at 15 n.6.

To ensure they obtained all the discovery they needed, Plaintiffs filed five motions to compel. Of the three that were filed in this Court, one was granted, dkt. # 127, one denied without prejudice to requesting the same relief in Canada, dkt. # 344, and a third was pending when the parties agreed to the Settlement. Dkt. # 457. Of the two filed in Canada, one was granted; the second was denied, but was on appeal at the time of the Settlement.

C. Plaintiffs Negotiate the Settlement Over Two Years and Two Mediations

In October 2017, Plaintiffs and the Silver Wheaton Defendants, at that time the only parties, held an all-day mediation before the Hon. Layn R. Phillips (ret.), an experienced mediator and former federal judge. The mediation failed, as did further settlement discussions taking place soon after the mediation.

On December 4, 2019, Plaintiffs, the Silver Wheaton Defendants, and Deloitte held an all-day mediation before Judge Phillips. At that time, the Settling Parties agreed in principle to settle all claims raised in this Action for $41.5 million.

After the agreement in principle, the Parties negotiated and signed a confidential Term Sheet which set out the Settlement's principal terms. The Parties then negotiated the full terms of the Settlement and memorialized them in the Stipulation.

IV. THE PROPOSED SETTLEMENT WARRANTS PRELIMINARY APPROVAL

Public policy strongly favors settlements to resolve disputes, especially in complex class actions. See In re Syncor ERISA Litig., 516 F.3d 1095, 1101 (9th Cir. 2008) (“[T]here is a strong judicial policy that favors settlements, particularly where complex class action litigation is concerned.”). Moreover, courts should defer to “'the private consensual decision of the parties to settle'” and advance the “overriding public interest in settling and quieting litigation.” Id. at 1229.

Federal Rule of Civil Procedure 23(e) requires judicial approval for a settlement of claims brought as a class action. Fed. R. Civ. P. 23(e) (“The claims [ ] of a certified class — or a class proposed to be certified for purposes of settlement — may be settled [ ] only with the court's approval.”). Under Rule 23(e)(1), the Court should preliminarily approve a settlement where, as here, the Court “will likely be able to: (i) approve the proposal under Rule 23(e)(2); and (ii) certify the class for purposes of judgment on the proposal.” Fed. R. Civ. Proc. 23(e)(1). Rule 23(e)(2), which the Court will fully apply at final approval, requires the Court to find that the settlement is “fair, reasonable, and adequate” in light of (a) the adequacy of representation and the arm's-length nature of negotiations, (b) the adequacy of the relief provided to the class, and (c) whether the plan treats class members equitably. Fed. R. Civ. Proc. 23(e)(2).

Courts in the Ninth Circuit rely on the following factors to determine whether the relief provided to the class is adequate: “the strength of the plaintiffs' case; the risk, expense, complexity, and likely duration of further litigation; the risk of maintaining class action status throughout the trial; the amount offered in settlement; the extent of discovery completed and the stage of the proceedings; the experience and views of counsel; the presence of a governmental participant; and the reaction of the class members to the proposed settlement.”2 Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 1998).

The proposed Settlement for $41.5 million in cash easily satisfies each of the factors identified under Rule 23(e)(2), as well as the applicable Ninth Circuit factors, such that Notice of the proposed Settlement should be sent to the Class in advance of the final Settlement Hearing.

A. Plaintiffs and Their Counsel Have Adequately Represented the Class

Plaintiffs and their counsel have adequately represented the Class as required by Rule 23(e)(2)(A) by diligently prosecuting this Action on their behalf. Each of the Plaintiffs discharged his or her responsibilities throughout the litigation. Each Plaintiff produced documents and attended his or her deposition. Each monitored Plaintiffs' counsel to ensure counsel was adequately representing the Class. Each of the Plaintiffs was certified as an adequate representative of the Class.

Plaintiffs pled a complaint that survived the Silver Wheaton Defendants' motion to dismiss, obtained and reviewed more than 800,000 pages of documents, and took six fact depositions. When the facts they learned suggested Settlement Class Members might have claims against Deloitte, Plaintiffs diligently moved for leave to file the Complaint and successfully defended it against Defendants' motions to dismiss. Plaintiffs filed five motions to compel in two countries to obtain the documents they would need to prove their claims. Finally, Plaintiffs adapted to the Canadian tax court's decision in Cameco and the CRA Settlement. And the $41.5 million settlement Plaintiffs negotiated through two mediations with Judge Phillips will provide substantial relief to the Class.

B. The Proposed Settlement Results From Good Faith Arm's-Length Negotiations by Informed, Experienced Counsel Who Were Aware of the Risks of the Litigation

The Rule 23(e)(2)(B) factor is a procedural one — whether “the proposal was negotiated at arm's-length.” “A settlement is presumed to be fair if reached in arms-length negotiations after relevant discovery has taken place.” Pataky v. Brigantine, Inc., No. 17-CV-00352-GPC-AGS, 2018 WL 3020159, at *3 (S.D. Cal. June 18, 2018). In a case like this which has progressed well into discovery, “[g]reat weight is accorded to the recommendation of counsel, who are most closely acquainted with the facts of the underlying litigation.” Gribble v. Cool Transports Inc., No. CV 06-04863 GAF SHX, 2008 WL 5281665, at *9 (C.D. Cal. Dec. 15, 2008).

The parties litigated zealously over four years. The docket for this case runs to 473 entries, not including the extensive proceedings in Canada. Settlement discussions took place before a mediator and broke apart for two years. The length and breadth of litigation, the mediator's involvement, and the unsuccessful first mediation all show there was no collusion. In re Atmel Corp. Derivative Litig., No. C 06-4592 JF (HRL), 2010 WL 9525643, at *13 (N.D. Cal. Mar. 31, 2010) (the mediator's participation “weighs considerably” against collusiveness); Hicks v. Stanley, No. 01 CIV. 10071 (RJH), 2005 WL 2757792, at *5 (S.D.N.Y. Oct. 24, 2005) (“A breakdown in settlement negotiations can tend to display the negotiation's arms-length and non-collusive nature.”).

Armed with extensive information generated through four years of litigation, Plaintiffs negotiated the Settlement, which recovers $41.5 million for investors. This is a very good result and the Court should grant preliminary approval.

C. The Relief Provided to the Class Is Adequate

1. The Substantial Benefits for the Class, Weighed Against the Costs, Risks and Delay of Trial and Appeal Support Preliminary Approval

This case also satisfies the factors concerning the “strength of plaintiffs' case; the risk, expense, complexity, and likely duration of further litigation” as well as “the amount offered in settlement” which courts in the Ninth Circuit employ to determine whether to approve a class action settlement. Hefler v. Wells Fargo & Co., No. 16-CV-05479-JST, 2018 WL 6619983, at *3 (N.D. Cal. Dec. 18, 2018).

Settlement is favored where, as here, the case is “'complex and likely to be expensive and lengthy to try'” and presents numerous risks beyond the “'inherent risks of litigation.'” Low v. Trump Univ., LLC, 246 F. Supp. 3d 1295, 1301 (S.D. Cal. 2017). “[S]ecurities actions are highly complex and [ ] securities class litigation is notably difficult and notoriously uncertain.” Id. at *13.

Litigation and trial are always risky propositions. See, e.g., Salazar v. Midwest Servicing Grp., Inc., No. 17-CV-0137-PSG-KS, 2018 WL 3031503, at *6 (C.D. Cal. June 4, 2018) (a settlement agreement's “elimination of risk, delay, and further expenses weighs in favor of approval”). Plaintiffs might have lost on summary judgment. See, e.g., In re Oracle Corp. Sec. Litig., 627 F.3d 376, 395 (9th Cir. 2010) (affirming summary judgment in favor of defendants where plaintiff failed to establish a triable issue on loss causation); In re NeoPharm, Inc. Sec. Litig., 705 F. Supp. 2d 946, 966 (N.D. Ill. 2010) (granting partial summary judgment where plaintiffs failed to prove material falsity or scienter). Plaintiffs might have had an expert excluded, crippling their case. In re Puda Coal Sec. Inc., Litig., 30 F. Supp. 3d 230, 254 (S.D.N.Y. 2014), aff'd sub nom. Querub v. Hong Kong, 649 F. App'x 55 (2d Cir. 2016). Plaintiffs might have lost at trial. Horne Dec. Ex. 2, at 3-4 (listing five securities class action that resulted in defense verdict). The jury might cut Plaintiffs' damages significantly or assign very small proportional liability to Defendants as happened in the Puma Biotechnology and Longtop trials. See Puma Biotechnology — Both Sides Claim Victory in Rare Jury Trial Verdict3 (reporting that according to defendants, plaintiffs won only 5% of the damages they requested); Horne Dec. Ex. ___, at 5 (Longtop jury assigning 1% liability to defendant). Indeed, Plaintiffs might yet lose their case even after winning at trial. In re BankAtlantic Bancorp, Inc., No. 07-61542-CIV, 2011 WL 1585605, at *38 (S.D. Fla. Apr. 25, 2011), aff'd on other grounds sub nom. Hubbard v. BankAtlantic Bancorp, Inc., 688 F.3d 713 (11th Cir. 2012) (granting motion for judgment as a matter of law against plaintiffs after partial jury verdict in their favor). Plaintiffs might have lost on appeal. see also Robbins v. Koger Props., Inc., 116 F.3d 1441 (11th Cir. 1997) (reversing jury verdict of $81 million for plaintiffs).

Although Plaintiffs' case is strong, Defendants contested that they had made false statements or that they had made statements with the requisite scienter — “intentionally or with deliberate recklessness.” Zucco Partners, LLC v. Digimarc Corp., 552 F.3d 981, 991 (9th Cir. 2009). Defendants' arguments are not without merit.

First, Plaintiffs do not contend that Defendants misstated an objective fact. Rather, Plaintiffs allege that Defendants violated accounting standards which required Silver Wheaton's management to make certain disclosures based on management's own assessment of whether a tax liability was reasonably possible or probable, and management's own assessment of whether the liability could be estimated. In Deloitte's case, Plaintiffs must show that in Deloitte's opinion its audit was inadequate or that in Deloitte's opinion Silver Wheaton's financial statements were accurately stated. Having to prove that the opinions Defendants expressed were fraudulent is a much more difficult jury argument than showing that objective statements they made were false.

Second, the fact of the CRA Settlement further adds to Plaintiffs' burden. Silver Wheaton was able to resolve its tax appeal. Thus, Defendants will be able to argue that the CRA Settlement vindicates Silver Wheaton's tax position. Whatever the merits of this argument, the CRA Settlement does not vindicate Silver Wheaton's accounting position. The accounting standards require recording or disclosure if the risk is probable or reasonably certain, rather than certain. A company that faces a 60% risk of material liability will avoid material harm 40% of the time. The CRA Settlement is perfectly consistent with liability having been possible or even probable during the Settlement Class Period, particularly given the intervening decision in Cameco. But in determining whether Silver Wheaton's tax liability was reasonably probable, the jury may well focus on the fact that in the end Silver Wheaton did not have to pay material amounts to settle its tax claim and forego an analysis of the legal or accounting merits of Silver Wheaton's tax position and accounting therefor.

That witnesses and documents are located primarily in Canada poses additional difficulties. For example, instead of serving subpoenas on Silver Wheaton tax advisor PwC and auditor Deloitte, Plaintiffs had to litigate the terms of letters rogatory in the U.S., file an enforcement proceeding in Canada, and then negotiate and litigate the terms of compliance with PwC and Deloitte, respectively. In total, the process took more than six months, and required Plaintiffs to pay a portion of PwC and Deloitte's costs.

Moreover, Canada has nothing like the U.S.'s broad scope of discovery and applies its own rules when determining what production to order. This can have significant consequences for the case. Before Deloitte was named as a defendant, Plaintiffs had no real hope of obtaining its email correspondence. Instead, Plaintiffs sought a smaller and more definite set of documents. When Deloitte was added as a Defendant, Plaintiffs obtained Deloitte's internal correspondence. The correspondence significantly improved their case against all Defendants, not just Deloitte. If similar inculpatory documents exist in PwC's stored email correspondence, Plaintiffs could never obtain them. Thus, the need to seek testimony and documents in Canada increases the risk, length, complexity, and expense of this Action.

According to Cornerstone Research's Securities Class Action Settlements: 2018 Review and Analysis (“Cornerstone Report”), between 2009 and 2018, cases with damages of $250-499 million, like this one, settled for a median of 3.9% of total damages. See Exhibit 1 attached to the Horne Dec., at 1. Plaintiffs' expert estimated total damages of about $380 million. The proposed Settlement thus recovers 10.9% of damages, or about two and a half times the median settlement.

Defendants would continue to argue that the alleged corrective disclosure on August 13, 2015 was not “corrective” because it did not reveal that any alleged misstatement was false and misleading when made. Defendants would also deny there are damages because the decrease in stock price following the July 2015 corrective disclosure is smaller than the sum of the increase following the September 2018 decision in Cameco or the December 2018 announcement of the CRA Settlement.4 Even if there are damages, Defendants have argued that they are no more than $100 million. While Plaintiffs believe that the increases in stock price are legally irrelevant and disagree with Defendants' damages estimate, the Court has not decided the issue either way.

Each of these issues would have been heavily contested if the Litigation continued and each presented significant obstacles to Lead Plaintiffs' success at summary judgment or trial.

Finally, to present their case at trial, Plaintiffs would rely unusually heavily on experts. Plaintiffs would need experts to show that Silver Wheaton's tax position was suspect under Canadian tax law, that Silver Wheaton's accounting position violated the applicable accounting standards, that Deloitte's audit violated PCAOB auditing standards, that the corrective disclosure caused the Class's losses, and the amount of damages. That Plaintiffs must rely on experts to prove most of the key issues in this case “suggests that plaintiffs' ability to prove liability was somewhat unclear; this favors a finding that the settlement is fair.” Weeks v. Kellogg Co., No. CV 09-08102 MMM RZX, 2013 WL 6531177, at *13 (C.D. Cal. Nov. 23, 2013).

The Settlement secures a certain and immediate outcome despite the risks, costs, and delay inherent in complex cases. Thus, the benefits created by the Settlement weigh heavily in favor of granting the motion for preliminary approval.

2. Attorneys' Fees

Rule 23(e)(2)(C)(iii) addresses “the terms of any proposed award of attorney's fees, including timing of payment.” The Court will fix Plaintiffs' Counsel's compensation.

The proposed Notice states that Plaintiffs' Counsel will seek an award of attorneys' fees of no more than one third of the Settlement Amount plus interest and expenses in an amount not to exceed $1.6 million. Plaintiffs' Counsel has not yet determined the precise amount of attorney fees they will request, only that it will be in the range of 25.0% and 33.3%. This fee request is in line with other settlements approved in recent cases. See, e.g., Morris v. Lifescan, Inc., 54 F. App'x 663, 664 (9th Cir. 2003) (affirming attorneys' fee award of 33% of a $14.8 million cash settlement); In re Pac. Enterprises Sec. Litig., 47 F.3d 373, 379 (9th Cir. 1995) (approving a fee award of one-third of a $12 million settlement fund); In re Heritage Bond Litig., No. 02-ML-1475-DT(RCX), 2005 WL 1594389, at *9 (C.D. Cal. June 10, 2005) (awarding one-third of a $27.78 million settlement fund, representing about 36% of the class' total net loss of approximately $78 million); Deaver v. Compass Bank, No. 13-CV-00222-JSC, 2015 WL 8526982, at *11 (N.D. Cal. Dec. 11, 2015) (awarding one third of $500,000 settlement fund); and Boyd v. Bank of Am. Corp., No. SACV 13-0561-DOC, 2014 WL 6473804, at *10 (C.D. Cal. Nov. 18, 2014) (awarding one-third of $5,800,000 settlement where the average class member would receive $10,840 — 36% of the full possible relief — and obtain ongoing and beneficial non-monetary relief in the form of being reclassified as nonexempt in FLSA case).

In addition, Plaintiffs' Counsel will request that any award of fees and expenses be paid at the time the Court makes its award (a “quick pay” provision). “Federal courts, including this Court and others in this District, routinely approve settlements that provide for payment of attorneys' fees prior to final disposition in complex class actions.” In re TFT-LCD (Flat Panel) Antitrust Litig., No. MDL 3:07-MD-1827 SI, 2011 WL 7575004, at *1 (N.D. Cal. Dec. 27, 2011) (citing 7 cases in which courts approved quick-pay provision).

Further, as explained in the Notice, Plaintiffs intend to request an amount not to exceed $12,500 each pursuant to 15 U.S.C. §78u-4(a)(4) in connection with their representation of the Class.

3. The Parties Have No Additional Agreements Besides Opt-Outs

Rule 23(e)(2)(C)(iv) mandates disclosure of any side agreement between Plaintiffs and the Defendants. The Settling Parties have entered into a standard supplemental agreement which provides that if Class Members opt out of the Settlement such that the number of shares of Silver Wheaton common stock represented by such opt outs equals or exceeds a certain amount, Defendants shall have the option to terminate the Settlement. Stipulation, ¶10.5. While the supplemental agreement is identified in the Stipulation (id.), the terms are confidential, as permitted by the Ninth Circuit. See Kamakana v. City & Cty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006).5

V. THE COURT SHOULD CERTIFY THE SETTLEMENT CLASS

Before granting preliminary approval, the Court should also assure itself that it “will likely be able to [ ] certify the class for purposes of judgment on the proposal.” Fed. R. Civ. Proc. 23(e)(1). The Court has already certified a class against the Silver Wheaton Defendants. Solely for the purposes of Settlement, Deloitte has consented to certification of a Settlement Class coextensive with the already-certified class.

The Ninth Circuit has long recognized that class actions may be certified for the settlement alone. See Hanlon v Chrysler Corp., 150 F.3d 1011, 1019 (9th Cir. 1998). Rule 23(a) sets forth the four prerequisites to class certification: (i) numerosity; (ii) commonality; (iii) typicality; and (iv) adequacy of representation. In addition, the class must meet one of the three requirements of Rule 23(b). See Fed. R. Civ. P. 23; In re UTStarcom, Inc. Sec. Litig., No. C 04-04908 JW, 2010 WL 1945737, at *3 (N.D. Cal. May 12, 2010).

In certifying a class, the Court has already made the findings necessary to certify the Settlement Class as to Deloitte.

Numerosity:

“On average, 5.5 million shares of Silver Wheaton stock are exchanged on a daily basis [citing declaration of Plaintiffs' expert]. Defendants do not dispute that the Class satisfies the requirement of numerosity. [ ] Accordingly, the Court finds that the Class is sufficiently numerous to satisfy the requirements of Rule 23, sub-section (a)(1).”

Order Granting Plaintiffs' Motion to Certify Class, dkt. # 148, at 10-11.

Commonality:

“Defendants do not oppose a finding of commonality. [ ] Applying the common sense approach of Blackie, the Court finds that this action presents questions of law and fact common to the proposed Class.” Id. at 11.

Typicality:

“Defendants do not argue that the Class's proposed representatives are atypical of the Class. It is undisputed that, like all members of the proposed Class, plaintiffs purchased Silver Wheaton common stock during the Class Period and were allegedly damaged by the same misstatements and omissions by Silver Wheaton. Accordingly, the Court finds that plaintiffs' claims are typical of the Class.”

Id. at 12.

Adequacy:

“Under Rule 23(a)(4), a named plaintiff must 'fairly and adequately protect the interests of the class.' To establish adequacy of representation, the issue is whether 'the named plaintiffs and their counsel have any conflicts of interest with other class members' and whether 'the named plaintiffs and their counsel will prosecute the action vigorously on behalf of the class.' Hanlon, 150 F.3d at 1020. Here, there is no dispute regarding whether the interests of plaintiffs and the Class are aligned. Nor is there a dispute that the Rosen Law Firm can adequately serve as Class counsel.

* * * * *

In light of the foregoing [analysis on pp. 13-19], the Court finds that plaintiffs have demonstrated that they will be adequate representatives of the proposed class.”

Id. at 12-19.

By finding that that common issues predominate over individual issues and that a class action is superior to individual actions to resolve the claims, the Court has also found that the class meets Rule 23(b)'s additional requirements:

Predominance:

“In order to succeed in their claims, plaintiffs must have relied upon defendants' failure to disclose the risk that Silver Wheaton would have to pay back-taxes and a penalty because of its tax position in relation to SW Cayman. Plaintiffs contend that they are entitled to a presumption of reliance pursuant to [ ] Basic Inc. v. Levinson, 485 U.S. 224 (1988) (establishing a presumption of reliance where plaintiffs claim to have relied upon a stock's price in an efficient market).

* * * * *

[P]laintiffs are entitled to a presumption under Basic.” Id. at 20, 22.

Superiority:

Here, the Court finds that each factor militates in favor of certification. The Court is unaware of any other actions initiated by members of the Class and there do not appear to be any potential management problems. Furthermore, “[w]here thousands of identical complaints would have to be filed, it is superior to concentrate claims through a class action in a single forum.” In re Juniper Networks, Inc. Sec. Litig., 264 F.R.D. 584, 592 (N.D. Cal. 2009). Accordingly, the Court concludes that resolution on a class wide basis will be superior to other methods of resolving claims by members of the Class.

Id. at 30.

Nothing has changed since the Court certified the Class. Nor are there any legal or factual issues that would change the Court's Rule 23(b) analysis as to Deloitte. The Complaint alleges that Deloitte's audit opinions were false and misleading. Just as the Court found that Silver Wheaton's financial statements served as the basis of predominant legal and factual issues meriting class-wide treatment, so would Deloitte's challenged audit opinions. The Court should certify the Settlement Class as to Deloitte.

VI. THE PROPOSED PLAN OF ALLOCATION TREATS CLASS MEMBERS FAIRLY

Courts will approve a plan of allocation so long as “the proposed plan is rationally related to the relative strengths and weaknesses of the respective claims asserted.” Rosenburg v. I.B.M., No. CV06-00430PJH, 2007 WL 128232, at *5 (N.D. Cal. Jan. 11, 2007). The Plan of Allocation (“Plan”), which Plaintiffs formulated in consultation with a financial expert and a claims administration expert, is fair reasonable, and adequate because it does not treat Plaintiffs or any other Settlement Class Member preferentially. In re Zynga Inc. Sec. Litig., No. 12-CV-04007-JSC, 2015 WL 6471171, at *10 (N.D. Cal. Oct. 27, 2015). The Plan, which is set out in the Notice, explains how the Settlement proceeds will be distributed among Authorized Claimants.

The Plan sets out a formula for calculating the recognized claim of each Settlement Class Member, based on each such person's purchases and sales Silver Wheaton common stock in domestic U.S. transactions during the Class Period. Each Class Member, including Plaintiffs, will receive a distribution pursuant to the Plan. Plaintiffs, just like all other Class Members, will have their claims evaluated according to the universal formula.

The Court should preliminarily approve the Plan.

VII. THE PROPOSED FORMS AND METHOD OF PROVIDING NOTICE TO THE CLASS ARE APPROPRIATE AND SATISFY FEDERAL RULE OF CIVIL PROCEDURE 23, THE PSLRA, AND DUE PROCESS

Rule 23 mandates that notice of the proposed settlement be provided to the Class in such manner as the court directs. Fed. R. Civ. P. 23(e). The Settlement mandates that notice and administration costs be paid from the Settlement Fund. With a large class at issue in this case, such costs threaten to materially reduce the funds available to distribute to Class Members. Plaintiffs and their expert have therefore drafted the Notice Plan to reduce administrative costs to leave more money to be distributed to Class Members.

The parties propose to provide notice of the Settlement by:

  • Mailing a copy of the postcard notice attached hereto as Exhibit A-4 (“Postcard Notice”) to all Class Members who can be identified from records maintained by Silver Wheaton's transfer agent;

  • Mailing or emailing a copy of the Postcard Notice to all Class Members who can be identified from records maintained by brokers or nominees;

  • Publishing a summary notice, attached hereto as Exhibit A-3(“Summary Notice”) once on Investors' Business Daily and issuing it once as a Press Release to all national and global media outlets; and

  • Publishing the Internet Notice, attached hereto as Exhibit A-1, on a case-specific website.

The proposed Postcard Notice and its dissemination, the publication of the Summary Notice, and the publication of the Internet Notice on a case-specific website, are “reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.” Mullane v. Cent. Hanover Bank & Tr. Co., 339 U.S. 306, 314, 70 S. Ct. 652, 94 L. Ed. 865 (1950). “The use of a combination of a mailed post card directing class members to a more detailed online notice has been approved by courts.” In re Advanced Battery Techs., Inc. Sec. Litig., 298 F.R.D. 171, 183 (S.D.N.Y. 2014) (citations omitted); Graham v. Capital One Bank (USA), N.A., No. SACV13743JLSJPRX, 2014 WL 12579809, at *8 (C.D. Cal. July 29, 2014) (approving postcard notice); McCurley v. Royal Seas Cruises, Inc., No. 17-CV-00986-BAS-AGS, 2019 WL 3817970, at *4 (S.D. Cal. Aug. 14, 2019) (same).

Processing a mailed claim costs more than twice as much as processing an electronic claim. Thus, to limit administration costs, the parties also propose limited steps to encourage Class Members to file electronically. First, the case-specific website will permit Class Members to file electronically. Second, the website will instruct Class Members on how to download trading records directly from their brokerage firm, where possible, and submit them in support of their claims, along with other evidence. Allowing class members to submit electronic records they can download makes filing a claim much easier than if Class Members must manually enter transactions, as they would be required if they submitted a paper claim. Third, the Claims Administrator will still accept paper claims, but the parties propose to reduce recognized claims by an immaterial amount (by $5 or 1%, whichever is greater). These steps will encourage Class Members to file electronic claims and thus reduce administration costs so that more of the Settlement is available to distribute.

The content of the Notices complies with all requirements of Fed. R. Civ. P. 23(c)(2). The notices inform Settlement Class Members of the claims alleged in the action, the terms of the Settlement and their rights as Settlement Class Members to opt out or object to the settlement, or otherwise object to the Plan of Allocation and/or the proposed attorneys' fees and expenses. See Churchill Vill., L.L.C. v. Gen. Elec., 361 F.3d 566, 575 (9th Cir. 2004) (“Notice is satisfactory if it 'generally describes the terms of the settlement in sufficient detail to alert those with adverse viewpoints to investigate and to come forward and be heard.'”).

The Proposed Postcard Notice provides basic information to class members including the claims at issue, the settlement amount, and the maximum amount of attorneys' fees to be requested. The Postcard Notice also directs class members to a website where they can find more detailed information, including the Notice which provides detailed information concerning: (a) the rights of Settlement Class Members, including the manner in which they may lodge objections; (b) the nature, history, and progress of the litigation; (c) the proposed Settlement; (d) the process for filing a proof of claim; (e) a description of the Plan of Allocation; (f) the fees and expenses which Plaintiffs' Counsel will seek; and (g) the information necessary for any Settlement Class Member to find and examine the Court records.

In addition, the Notice satisfies the requirements of Rule 23 by setting forth in plain language:

  • the nature of the action, see Notice, Questions 2, 4 (“What is this lawsuit about?” “Why is there a settlement?”);

  • the Class definition, see Notice, (p. 1) and Question 5 (“How do I know if I am part of the Settlement?,”);

  • a description of the claims at issue and the defenses to those claims, see Notice, Question 2 (“What is this lawsuit about?”);

  • the ability of Settlement Class Members to enter an appearance through Counsel, see Notice, Questions 12, 14-16 (“Do I have a lawyer in this case?”, “How do I tell the Court that I do not like the Settlement?”, “What is the difference between objecting and requesting exclusion?”, “When and where will the Court decide whether to approve the Settlement?”)

  • the Class Member's ability to be excluded and the process for exclusion from the Class, see Notice, Questions 10-11 (“How do I get out of the Settlement?”, “If I do not exclude myself, can I sue the Defendants for the same thing later?”).

The Notice also provides the time, date, and location of the Settlement Hearing and the process to object to the Settlement itself or to other relief to be requested by Plaintiffs and Plaintiffs' Counsel. Notice, Questions 14-18.

The Notice also meets the requirements of the PSLRA, 15 U.S.C. §78u-4(a)(7). The Notice provides:

  • A cover page summarizing the information contained in the Notice. 15 U.S.C. §78u-4(a)(7); Notice, p.1;

  • A statement of class member recovery, estimating a recovery of $0.165 per share of Silver Wheaton common stock for the approximately 251 million Silver Wheaton shares traded during the Settlement Class Period (Plaintiffs' expert's estimate of the number of shares traded on the NYSE), before deduction of Court-approved fees and expenses and costs of notice and claims administration; the Notice further explains that under the Plan of Allocation, the actual amount recovered will vary greatly across the Class, 15 U.S.C. §78u-4(a)(7)(A); Notice, cover, Question 7 (“What does the settlement provide?”)

  • A statement of the potential outcome of the case including a statement concerning the issue or issues on which the Parties disagree. 15 U.S.C. §78u-4(a)(7)(B); see Notice, Question 7.b, (“What can I expect to receive under the proposed Settlement?”), Questions 2, 4 (“What is this case about?”, “Why is there a Settlement?”)

  • A statement of attorneys' fees or costs sought, including a summary of this information on the cover page. 15 U.S.C. §78u-4(a)(7)(C); see Notice, Page 1, and Question 13 (“How will the lawyers be paid?”);

  • Information on how to contact the Claims Administrator and/or Class Counsel, including names, addresses, telephone numbers, and websites. 15 U.S.C. §78u-4(a)(7)(D); see Notice, Page 2 and Question 14 (“How do I tell the Court that I do not like the Settlement”?); and

  • A discussion of the reasons for Proposed Settlement, including the factors Plaintiffs and Defendants considered in reaching the Proposed Settlement. 15 U.S.C. §78u-4(a)(7)(E); see Notice, Question 4 (“Why is there a settlement?”).

Thus, the proposed Notice to be mailed to the Class provides all the information required by the PSLRA. Courts have found that notice substantially equivalent to that provided for in the instant Settlement constituted the “best notice practicable under the circumstances,” satisfying the requirements of Fed. R. Civ. P. 23(c)(2)(B). In re Am. Honda Motor Co., Inc., No. CV06-1301-CAS(PLAX), 2009 WL 1204495, at *4 (C.D. Cal. Apr. 17, 2009); see generally Manual for Complex Litigation §21.633.

The parties have carefully drafted the notice provisions of the Settlement to provide the best notice practicable to the Class. The proposed notices, the Internet Notice, the Summary Notice, and the Postcard Notice, which are annexed as Exhibits A-1, A-3, and A-4 to the Stipulation, are adequate.

VIII. PROPOSED SETTLEMENT SCHEDULE

The Court's entry of the proposed Preliminary Approval Order would, among other things, (i) certify, for settlement purposes, this action as a class action; and (ii) direct notice of the Proposed Settlement to all members of the Class. As such, the Preliminary Approval Order sets a proposed schedule for mailing and publication of the Notice and Summary Notice, and deadlines for submitting claims and/or objecting to the Proposed Settlement or opting out of the Class.

The parties propose the following schedule for notice, final approval hearing and related dates:


Postcard Notice Mailed to Class Members (Preliminary Approval Order, ¶8(b))

21 calendar days after entry of the order preliminarily approving the settlement (“Notice Date”)

Summary Notice published (Preliminary Approval Order, ¶ 8(c))

21 calendar days after entry of the order preliminarily approving the settlement

Final Approval Hearing (Preliminary Approval Order, ¶ 6)

To be determined by the court, a date no less than 145 calendar days from entry of the order preliminarily approving the settlement

Deadline to request exclusion from the Settlement (Preliminary Approval Order, ¶ 13)

49 calendar days prior to the Final Approval Hearing

Deadline to submit Proof of Claim forms (Preliminary Approval Order, ¶¶ 19(a))

49 calendar days prior to the Final Approval Hearing

Deadline for Plaintiffs to file papers in support of final approval and application of Lead Counsel for attorneys' fees, reimbursement of expenses, and an award to Lead Plaintiffs, and application for approval of the Plan of Allocation (Preliminary Approval Order, ¶ 20)

 28 calendar days before the Final Approval hearing

Deadline for Objections to the Settlement, Plan of Allocation, Attorneys' Fees and Lead Plaintiff Award (Preliminary Approval Order, ¶ 16)

14 calendar days prior to the Final Approval Hearing

Deadline for Plaintiffs to file reply papers in support of final approval and application of Lead Counsel for attorneys' fees, reimbursement of expenses, and an award to Lead Plaintiffs, and application for approval of the Plan of Allocation (Preliminary Approval Order, ¶ 20)

7 calendar days prior to the Final Approval Hearing

Dated: February 10, 2020

THE ROSEN LAW FIRM, P.A.

By:

Laurence M. Rosen, Esq. (SBN 219683)
355 S. Grand Avenue, Suite 2450
Los Angeles, CA 90071
Telephone: (213) 785-2610
Facsimile: (213) 226-4684
Email: lrosen@rosenlegal.com
Counsel for Plaintiffs/Class Representatives

FOOTNOTES

1 Excluded from the Settlement Class are Defendants, all present and former officers and directors of Silver Wheaton and any subsidiary thereof, Deloitte and all of its present and former partners, members of all such excluded persons' families and their legal representatives, heirs, successors or assigns and any entity which such excluded persons controlled or in which they have or had a controlling interest.

2 Because notice of the Settlement has not yet been provided to the Class, the Court does not yet have the benefit of the Class's reaction. There are no U.S. parties and Plaintiffs are not aware of any involvement in or position concerning this action by any arm or agency of the Canadian government. Thus, these two factors are not relevant at this time.

4 Memorandum of Points and Authorities in Support of Plaintiffs' Motion for Partial Judgment on the Pleadings, dkt. # 469, at 4-9.

5 The Defendants have reached a confidential agreement between themselves as to the amounts they will contribute to the settlement fund, as is standard in these matters.

END FOOTNOTES

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