It is common for defendants facing parallel securities class actions in New York state court and federal court to seek a stay of the state proceedings. Historically, New York state courts have readily deferred to their federal counterparts, agreeing to stay the state action pending the outcome of the federal action, particularly in circumstances where the state complaint was less comprehensive. Two recent Commercial Division cases, however, suggest this approach may be changing, increasing the risk that securities defendants will face active, concurrent litigation in both state and federal court. This column explores these recent developments.
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