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`Kyle Roche (pro hac vice forthcoming)
`Edward Normand (pro hac vice forthcoming)
`Joseph Delich (pro hac vice forthcoming)
`Alex Potter (pro hac vice forthcoming)
`Ivy T. Ngo (SBN 249860)
`ROCHE FREEDMAN LLP
`99 Park Avenue, 19th Floor
`New York, NY 10016
`Tel.: (646) 350-0527
`kyle@rochefreedman.com
`tnormand@rochefreedman.com
`jdelich@rochefreedman.com
`apotter@rochefreedman.com
`ingo@rochefreedman.com
`
`Counsel for Lead Plaintiff Movant Josh Golder
`and Proposed Co-Lead Counsel for the Class
`
`
`
`
`Tibor L. Nagy, Jr. (pro hac vice forthcoming)
`Gregory N. Wolfe (pro hac vice forthcoming)
`William LaGrange (pro hac vice forthcoming)
`Diego J. Martinez-Krippner (pro hac vice
`forthcoming)
`DONTZIN NAGY & FLEISSIG LLP
`980 Madison Avenue
`New York, NY 10075
`Tel.: (212) 717-2900
`tibor@dnfllp.com
`greg@dnfllp.com
`wlagrange@dnfllp.com
`dmartinezkrippner@dnfllp.com
`
`
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
`
`
`
`
`NICK PATTERSON, Individually and On Behalf
`of All Others Similarly Situated,
`
`Plaintiff,
`
`v.
`
`TERRAFORM LABS, PTE. LTD., JUMP
`CRYPTO, JUMP TRADING LLC, REPUBLIC
`CAPITAL, REPUBLIC MAXIMAL LLC, TRIBE
`CAPITAL, DEFINANCE
`CAPITAL/DEFINANCE TECHNOLOGIES OY
`GSR/GSR MARKETS LIMITED, THREE
`ARROWS CAPITAL PTE. LTD., NICHOLAS
`PLATIAS and DO KWON,
`
`
`
`
`Defendants.
`
`
`Case No.: 5:22-cv-03600-BLF
`
`NOTICE OF MOTION AND MOTION
`TO APPOINT JOSH GOLDER AS
`LEAD PLAINTIFF AND APPROVE
`HIS SELECTION OF ROCHE
`FREEDMAN LLP AND DONTZIN
`NAGY & FLEISSIG LLP AS CO-
`LEAD COUNSEL
`Date: December 15, 2022
`Time: 9:00 a.m.
`Judge: Hon. Beth Labson Freeman
`Courtroom: No. 3, 5th Floor
`
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`NOTICE OF MOTION AND MOTION TO APPOINT
`LEAD PLAINTIFF AND CO-LEAD COUNSEL – 5:22-CV-03600-BLF
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`NOTICE OF MOTION AND MOTION
`TO: ALL PARTIES AND THEIR RESPECTIVE COUNSEL OF RECORD
`
`PLEASE TAKE NOTICE that on December 15, 2022, at 9:00 a.m., or as soon thereafter as
`the matter may be heard, in Courtroom 3 of the United States District Court for the Northern District
`of California, 280 South 1st Street, San Jose, California, before the Honorable Beth Labson
`Freeman, pursuant to the Private Securities Litigation Reform Act of 1995, 15 U.S.C. §§ 77z-
`1(a)(3)(B)(i), 78u-4(a)(3)(B)(i), Josh Golder (“Movant”) will move the Court to appoint him as lead
`plaintiff and approve his selection of Roche Freedman LLP (“Roche Freedman”) and Dontzin Nagy
`& Fleissig LLP (“DNF”) as co-lead counsel. In support of this motion, Movant respectfully submits
`herewith a Memorandum of Points and Authorities and the Declaration of Kyle W. Roche (“Roche
`Decl.”).
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`NOTICE OF MOTION AND MOTION TO APPOINT
`LEAD PLAINTIFF AND CO-LEAD COUNSEL – 5:22-CV-03600-BLF
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`Case 5:22-cv-03600-BLF Document 32 Filed 08/19/22 Page 3 of 20
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`TABLE OF CONTENTS
`TABLE OF AUTHORITIES .............................................................................................................. ii
`I.
`INTRODUCTION .................................................................................................................... 1
`II.
`STATEMENT OF ISSUES TO BE DECIDED ....................................................................... 2
`III. STATEMENT OF FACTS ....................................................................................................... 2
`A.
`Summary Of The Case .................................................................................................. 2
`B.
`Movant .......................................................................................................................... 4
`IV. LEGAL STANDARD ............................................................................................................... 4
`A.
`Lead Plaintiff ................................................................................................................ 4
`B.
`Lead Counsel ................................................................................................................ 5
`V. ARGUMENT ............................................................................................................................ 6
`A.
`The Court Should Appoint Movant As Lead Plaintiff .................................................. 6
`1. Movant has the largest financial interest in this matter .......................................... 6
`2. Movant satisfies Rule 23’s typicality and adequacy requirements ......................... 8
`The Court Should Appoint Roche Freedman And DNF As Co-Lead Counsel ............ 9
`B.
`VI. CONCLUSION ....................................................................................................................... 12
`
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`Case 5:22-cv-03600-BLF Document 32 Filed 08/19/22 Page 4 of 20
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`
`
`Cases
`
`TABLE OF AUTHORITIES
`
`
`
`Cohen v. U.S. Dist. Court for N. Dist. of Cal.,
`586 F.3d 703 (9th Cir. 2009) ............................................................................................................. 5
`
`Doherty v. Pivotal Software, Inc.,
`2019 WL 5864581 (N.D. Cal. Nov. 8, 2019) .................................................................................... 9
`
`Habelt v. iRhythm Techs., Inc.,
`2021 WL 2207365 (N.D. Cal. June 1, 2021) ................................................................................ 5, 9
`
`Hessefort v. Super Micro Comput., Inc.,
`317 F. Supp. 3d 1056 (N.D. Cal. 2018) ............................................................................................ 8
`
`In re Cavanaugh,
`306 F.3d 726 (9th Cir. 2002) ......................................................................................................... 4, 5
`
`In re Lyft Securities Litig.,
`2020 WL 1043628 (N.D. Cal. Mar. 4, 2020) ................................................................................ 6, 9
`
`In re Mersho,
`6 F.4th 891 (9th Cir. 2021) ................................................................................................................ 5
`
`In re Stitch Fix, Inc. Securities Litig.,
`393 F. Supp. 3d 833 (N.D. Cal. 2019) .............................................................................................. 5
`
`Malriat v. QuantumScape Corp.,
`2021 WL 1550454 (N.D. Cal. Apr. 20, 2021) .................................................................................. 8
`
`Melucci v. Corcept Therapeutics Inc.,
`2019 WL 4933611 (N.D. Cal. Oct. 7, 2019) ..................................................................................... 7
`
`Mulquin v. Nektar Therapeutics,
`2019 WL 1170774 (N.D. Cal. Mar. 13, 2019) .................................................................................. 9
`
`Perlmutter v. Intuitive Surgical, Inc.,
`2011 WL 566814 (N.D. Cal. Feb. 15, 2011) ................................................................................. 7, 9
`
`Saint Jermain v. Fluidigm Corp.,
`2020 WL 7342717 (N.D. Cal. Dec. 14, 2020) .................................................................................. 9
`
`Vataj v. Johnson,
`2020 WL 532981 (N.D. Cal. Feb. 3, 2020) ....................................................................................... 9
`
`Xu v. FibroGen, Inc.,
`2021 WL 3861454 (N.D. Cal. Aug. 30, 2021) .............................................................................. 6, 7
`
`
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`NOTICE OF MOTION AND MOTION TO APPOINT
`LEAD PLAINTIFF AND CO-LEAD COUNSEL – 5:22-CV-03600-BLF
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`Ziolkowski v. Netflix, Inc.,
`2017 WL 2572583 (N.D. Cal. June 14, 2017) .................................................................................. 9
`
`Other Authorities
`
`15 U.S.C. § 771(a) .............................................................................................................................. 3
`
`15 U.S.C. § 77e(c) ............................................................................................................................... 3
`
`15 U.S.C. § 77z-1(a)(3)(B)(i) .......................................................................................................... 1, 2
`
`15 U.S.C. § 77z-1(a)(3)(B)(iii) ........................................................................................................... 1
`
`15 U.S.C. § 77z-1(a)(3)(B)(v) ............................................................................................................. 2
`
`15 U.S.C. § 78j(b) ............................................................................................................................... 3
`
`15 U.S.C. § 78u-4(a)(3)(B)(i) ......................................................................................................... 1, 2
`
`15 U.S.C. § 78u-4(a)(3)(B)(iii) ........................................................................................................... 1
`
`15 U.S.C. § 78u-4(a)(3)(B)(v) ............................................................................................................ 2
`
`15 U.S.C. §§77e(a) .............................................................................................................................. 3
`
`15 U.S.C. §77o .................................................................................................................................... 3
`
`17 C.F.R. § 240.10b-5(b) .................................................................................................................... 3
`
`18 U.S.C. § 1961 ................................................................................................................................. 3
`
`Bitcoin: Order Without Law in the Digital Age, 94 Indiana L.J. 1497 (2019) ................................. 10
`
`Why Bitcoin is Booming, Wall Street Journal (July 10, 2017) .......................................................... 10
`
`
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`Case 5:22-cv-03600-BLF Document 32 Filed 08/19/22 Page 6 of 20
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`I.
`
`MEMORANDUM OF POINTS AND AUTHORITIES
`INTRODUCTION
`This is a securities class action against Jump Crypto, Jump Trading LLC, Republic Capital,
`Republic Maximal LLC, Tribe Capital, DeFinance Capital/DeFinance Technologies Oy, GSR
`Markets Limited, Three Arrows Capital Pte. Ltd. (collectively, the “Luna Foundation Guard”),
`TerraForm Labs Pte. Ltd. (“TFL”), and Individual Defendants Nicholas Platias and Do Kwon
`(together with the Luna Foundation Guard and TFL, the “Defendants”) seeking to recover damages
`caused by Defendants’ unlawful promotion and sale of the Terra Tokens (as defined in the
`Complaint), which are unregistered securities, and Defendants’ fraudulent misrepresentations and
`omissions leading to the Class’s purchase of those unregistered securities at an inflated price. This
`action was commenced on June 17, 2022, on behalf of a proposed class consisting of all persons
`who purchased Terra Tokens between May 20, 2021, and May 25, 2022 (the “Class Period”).
`The PSLRA directs the Court to appoint as lead plaintiff the class member the Court
`“determines to be most capable of adequately representing the interests of class members.” 15
`U.S.C. §§ 77z-1(a)(3)(B)(i), 78u-4(a)(3)(B)(i). Under the applicable standards, Movant is the “most
`adequate plaintiff” to represent the class. See id. §§ 77z-1(a)(3)(B)(iii), 78u-4(a)(3)(B)(iii).
`Movant timely filed this motion, has substantial financial interests in this action, and satisfies
`the typicality and adequacy requirements set forth in Federal Rule of Civil Procedure 23. He will
`fairly and adequately protect the Class’s interests by prosecuting this litigation and seeking the
`fullest recovery for the Class, and he is not subject to unique defenses that would render him
`incapable of serving as lead plaintiff. He has also selected highly qualified and experienced counsel,
`Roche Freedman and DNF, who will provide him and the Class with the highest-caliber
`representation against these sophisticated Defendants and their counsel. For these reasons, Movant
`respectfully requests that the Court appoint him as lead plaintiff and approve his selection of Roche
`Freedman and DNF as co-lead counsel.
`
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`Case 5:22-cv-03600-BLF Document 32 Filed 08/19/22 Page 7 of 20
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`II.
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`III.
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`STATEMENT OF ISSUES TO BE DECIDED
`1. Whether the Court should appoint Movant as Lead Plaintiff pursuant to 15 U.S.C. §§ 77z-
`1(a)(3)(B)(i), 78u-4(a)(3)(B)(i).
`2. Whether the Court should approve Movant’s selection of Roche Freedman and DNF as Co-
`Lead Counsel pursuant to 15 U.S.C. §§ 77z-1(a)(3)(B)(v), 78u-4(a)(3)(B)(v).
`STATEMENT OF FACTS
`A.
`Summary Of The Case
`Terraform Labs (“TFL”) is a company founded by Do Kwon that operates the Terra
`blockchain and its related protocol—the “Terra ecosystem”—and develops, markets, and sells
`financial products within that ecosystem. (Compl. ¶ 2.) Among those financial products are the
`“Terra Tokens”—which include the “stablecoin” UST, the token LUNA, various “mirrored” assets,
`and bonded tokens—and related protocols that are designed to facilitate the sale of the Terra Tokens.
`(Id.) Defendants not only promoted and sold the Terra Tokens, which are all unregistered securities,
`but also made false statements and omissions of material fact regarding UST and LUNA to induce
`investors to purchase those assets, between May 20, 2021, and May 25, 2022, inclusive (the “Class
`Period”). (Id. ¶¶ 3-4.)
`TFL touted the stability of UST as an “algorithmic” stablecoin—meaning a digital asset
`intended to maintain its peg to one U.S. dollar through its relationship to a secondary asset—here,
`the Terra ecosystem’s LUNA token. (Id. ¶¶ 5, 46.) It also created and touted the sustainability of
`the “Anchor Protocol,” which is a high-yield savings account in which investors “stake” UST in
`exchange for a guaranteed 20% APY interest rate. (Id. ¶ 5.)
`At the behest of TFL, the Luna Foundation Guard was formed to create a reserve pool of
`assets that would be used to “defend the peg” in the event that high volatility caused the UST/LUNA
`pair to become untethered, and thereby undermine the “peg” of UST to one U.S. dollar. (Id.) The
`Luna Foundation Guard was utilized to promote the stability of UST and mislead investors into
`believing that (1) the Luna Foundation Guard’s reserve pool would be sufficient to defend the peg,
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`and (2) the Luna Foundation Guard would be able to maintain interest payments from the Anchor
`Protocol. (Id.)
`In May 2022, the price of UST and LUNA collapsed by approximately 91% and 99.7%,
`respectively, when it was revealed that those two instruments were unstable and unsustainable,
`contrary to the misrepresentations and omissions of Defendants. (Id. ¶ 5.)
`Based on the foregoing facts, on June 17, 2022, Plaintiff Nick Patterson commenced this
`action against Defendants, asserting claims on behalf of himself and the proposed Class. In Count
`I, Plaintiff alleges that Defendants carried out a scheme to deceive retail investors into purchasing
`Terra Tokens at artificially inflated prices, in violation of § 10(b) of the Securities Exchange Act of
`1934 (the “Exchange Act”), 15 U.S.C. § 78j(b), and Rule 10b-5(b) promulgated thereunder, 17
`C.F.R. § 240.10b-5(b). (Id. ¶¶ 169-193.) In Count II, Plaintiff alleges that TFL and the Individual
`Defendants are all statutory sellers of unregistered securities—the Terra Tokens—in violation of §§
`5(c), and 12(a) of the Securities Act of 1933 (the “Securities Act”), 15 U.S.C. §§77e(a), 77e(c), and
`771(a). (Id. ¶¶ 194-203.) In Count III, Plaintiff alleges control person liability against Defendants
`under § 15 of the Securities Act, 15 U.S.C. §77o. (Id. ¶¶ 204-211.)
`In Counts IV, V, and VII, Plaintiff asserts violations of California common law—
`respectively alleging aiding and abetting liability against the Luna Foundation Guard for promoting
`the Terra Tokens (id. ¶¶ 212-219), conspiracy liability against all Defendants for conspiring to
`misleadingly promote the Terra Tokens (in particular the UST and LUNA tokens) to retail investors
`in order to artificially inflate their price and trading volume, (id. ¶¶ 220-224), and for unjust
`enrichment and restitution, (Id. ¶¶ 259-262.)
`In Count VI, Plaintiff asserts a RICO claim under 18 U.S.C. §§ 1961, et seq., alleging that
`Defendants formed a RICO enterprise with the purpose of ensuring that they could sell off their
`Terra Token holdings to retail investors at artificially inflated prices without their fraud being
`detected (id. ¶¶ 228-241, 252) and engaged in a pattern of racketeering activity that included mail
`and wire fraud (id. ¶¶ 242-251), thereby causing investors to purchase Terra Tokens at fraudulently
`inflated prices. (Id. ¶¶ 253-258.)
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`On June 20, 2022, Scott+Scott, which represents Mr. Patterson, issued a press release
`informing investors and prospective plaintiffs of the pending action against Defendants. The notice
`summarized the allegations and notified investors that if they “wish to serve as lead plaintiff, [they]
`must move the Court no later than August 19, 2022.”
`B. Movant
`Movant is 40 years old, lives in Miami, Florida, and is an entrepreneur. (Roche Decl. Ex. C
`¶ 2.) He is also a relatively experienced crypto investor and began investing in the sector two years
`ago. (Id.) He purchased over $29,239,250.15 in UST, LUNA and WLUNA,1 investments on which
`he has suffered losses of approximately $28,787,815.13 including fees. (See Roche Decl. Ex. B at
`1.)
`IV.
`
`LEGAL STANDARD
`A.
`Lead Plaintiff
`The PSLRA “instructs district courts to select as lead plaintiff the one ‘most capable of
`adequately representing the interests of class members’”—that is, the “most adequate plaintiff”—
`and “provides a simple three-step process” for making that selection. In re Cavanaugh, 306 F.3d
`726, 729-30 (9th Cir. 2002) (quoting 15 U.S.C. § 78u-4(a)(3)(B)(i)).
`“In step one, notice of the action must be posted so purported class members can move for
`lead plaintiff appointment.” In re Mersho, 6 F.4th 891, 899 (9th Cir. 2021). “In step two,” the
`
`
`
` Wrapped Luna (WLUNA) is the functional equivalent of LUNA. It is an Ethereum token that is
`
` 1
`
`intended to represent Terra (LUNA) on the Ethereum blockchain and is designed to track LUNA’s
`
`value. WLUNA was created to allow LUNA holders to trade, hold, and participate in decentralized
`
`finance (“DeFi”) on Ethereum. Through a WLUNA partner, one LUNA can be exchanged for one
`
`WLUNA, and vice versa. Although not specific on this point, the allegations in the Complaint with
`
`respect to LUNA apply with equal force to WLUNA.
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`“district court must ‘adopt a presumption that the most adequate plaintiff’ is the movant with the
`largest financial interest who ‘otherwise satisfies the requirements of Rule 23 of the Federal Rules
`of Civil Procedure.’” Id. (quoting 15 U.S.C. § 78u-4(a)(3)(B)(iii)). “This means the district court
`must identify which movant has the largest alleged losses and then determine whether that movant
`has made a prima facie showing of adequacy and typicality.” Id.
`“Once the district court has determined that the movant with the largest stake has made a
`prima facie showing of adequacy and typicality, that movant ‘becomes the presumptively most
`adequate plaintiff.’” Id. (quoting Cavanaugh, 306 F.3d at 730). “If the movant with the largest losses
`does not satisfy the Rule 23 requirements, the district court must then look to the movant with the
`next largest losses and repeat the inquiry.” Id. In the third step, other prospective lead plaintiffs
`“have ‘an opportunity to rebut the presumptive lead plaintiff’s showing’ by ‘present[ing] evidence
`that disputes the lead plaintiff’s prima facie showing of typicality and adequacy.’” In re Stitch Fix,
`Inc. Securities Litig., 393 F. Supp. 3d 833, 835 (N.D. Cal. 2019) (quoting Cavanaugh, 306 F.3d at
`730) (alterations in original).
`B.
`Lead Counsel
`“The PSLRA vests authority in the lead plaintiff to select and retain lead counsel, subject to
`the Court’s approval.” Habelt v. iRhythm Techs., Inc., 2021 WL 2207365, at *2 (N.D. Cal. June 1,
`2021). “The Court should interfere with the Lead Plaintiff’s selection only when necessary ‘to
`protect the interests of the class,’” id. (quoting 15 U.S.C. § 78u-4(a)(3)(B)(iii)(II)(aa)), such as
`where the selection “is so irrational, or so tainted by self-dealing or conflict of interest, as to cast
`genuine and serious doubt on that plaintiff’s willingness or ability to perform the functions of lead
`plaintiff,” Cavanaugh, 306 F.3d at 732-33. In other words, “if the lead plaintiff has made a
`reasonable choice of counsel, the district court should generally defer to that choice.” Cohen v. U.S.
`Dist. Court for N. Dist. of Cal., 586 F.3d 703, 711-12 (9th Cir. 2009).
`
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`V.
`
`ARGUMENT
`A.
`The Court Should Appoint Movant As Lead Plaintiff
`Movant respectfully requests that the Court appoint him as Lead Plaintiff—he is the “most
`adequate” plaintiff because, to his knowledge, he has the largest financial interest in this matter and
`because he satisfies the typicality and adequacy requirements set forth in Federal Rule of Civil
`Procedure 23. Indeed, he lost $28,787,815.13, suffered the same injuries as absent class members
`as a result of the same conduct by Defendants, has no conflicts with other class members, and will
`prosecute this action vigorously on behalf of the Class. Movant accordingly asserts, pursuant to
`Local Civil Rule 23-1(b), that he is entitled to the presumptions set forth in Section
`27(a)(3)(B)(iii)(I) of the Securities Act and Section 21D(a)(3)(B)(iii)(I) of the Exchange Act, but
`reserves the right to attempt to rebut those presumptions to the extent that they are invoked by
`another prospective lead plaintiff.
`1.
`Movant has the largest financial interest in this matter
`To his knowledge, Movant suffered the largest alleged losses and therefore has the largest
`financial interest in this matter. “The Ninth Circuit has not provided clear guidance on what metric
`district courts should use in determining which potential plaintiff has the largest financial interest
`in a case, noting only that ‘the court may select accounting methods that are both rational and
`consistently applied.’” Xu v. FibroGen, Inc., 2021 WL 3861454, at *4 (N.D. Cal. Aug. 30, 2021)
`(quoting Mulligan v. Impax Labs., Inc., 2013 WL 3354420, at *4 (N.D. Cal. July 2, 2013)). “Courts
`in this district primarily have relied on two methods: ‘[m]ethods in the first category equate financial
`interest with actual economic losses suffered.’” In re Lyft Securities Litig., 2020 WL 1043628, at
`*3 (N.D. Cal. Mar. 4, 2020) (quoting Perlmutter v. Intuitive Surgical, Inc., 2011 WL 566814, at *3
`(N.D. Cal. Feb. 15, 2011)). “In contrast, a second category of methods equates largest financial
`interest with potential recovery.” Id. (quoting Perlmutter, 2011 WL 566814, at *3).
`“Within the first category, courts have used the Lax-Olsten four-factor test to approximate
`economic losses.” Id. “These four factors are ‘(1) the number of shares purchased during the class
`period; (2) the number of net shares purchased during the class period; (3) the total net funds
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`LEAD PLAINTIFF AND CO-LEAD COUNSEL – 5:22-CV-03600-BLF
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`expended during the class period; and (4) the approximate losses suffered during the class period.’”
`Id. (quoting In re Olsten Corp. Securities Litig., 3 F. Supp. 2d 286, 295 (E.D.N.Y. 1998)). “Courts
`then consider the totality of these factors in order to determine an approximate loss for each
`movant.” Id.
`With respect to the second category—potential recovery—some courts endeavor to exclude
`“economic losses that are not caused by a defendant’s misrepresentations.” Xu, 2021 WL 3861454,
`at *5; compare Perlmutter, 2011 WL 566814, at *5 (“[R]ecent Ninth Circuit authority favors
`considering loss causation on a motion for appointment as lead plaintiff.”), with Melucci v. Corcept
`Therapeutics Inc., 2019 WL 4933611, at *4 (N.D. Cal. Oct. 7, 2019) (“Assessing potential recovery
`in a case involving gradual disclosures would require fact-intensive loss causation inquiries that are
`not amenable to analysis at this stage of the proceedings.”). Courts adopting this approach “have
`chosen ‘not to consider losses resulting from stock trades that occurred prior to any disclosure of
`the defendant’s fraud’ when evaluating potential plaintiffs’ financial interests in the litigation.” Xu,
`2021 WL 3861454, at *5 (quoting Perlmutter, 2011 WL 566814, at *4).
`Pursuant to the foregoing principles, Movant’s financial interest in this matter is summarized
`in the table below (see Roche Decl. Ex. B):
`
`
`Summary of Losses
`
`
`10(b) Claims
`
`
`
`
`2,719,921
`2,224,394
`$28,742,792.29
`$28,742,792.29
`
`
`
`
`Metric
`
`
`Economic Loss
`Total Tokens Purchased
`Net Tokens Purchased
`Net Funds Expended
`Approximate Loss
`
`
`
`Potential Recovery
`
`
`
`
`
`
`
`
`12(a)(1) Claims
`
`
`
`
`2,719,921
`2,224,394
`$28,742,792.29
`$28,787,815.13
`
`
`
`
`
`
`$28,742,792.29
`
`$28,787,815.13
`
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`NOTICE OF MOTION AND MOTION TO APPOINT
`LEAD PLAINTIFF AND CO-LEAD COUNSEL – 5:22-CV-03600-BLF
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`2.
`Movant satisfies Rule 23’s typicality and adequacy requirements
`Movant likewise satisfies the typicality and adequacy requirements set forth in Federal Rule
`of Civil Procedure 23. “Once a movant has demonstrated that it has the largest financial interest, it
`need only make a prima facie showing of its typicality and adequacy.” Hessefort v. Super Micro
`Comput., Inc., 317 F. Supp. 3d 1056, 1060-61 (N.D. Cal. 2018). “The test of typicality is whether
`other members have the same or similar injury, whether the action is based on conduct which is not
`unique to the named plaintiffs, and whether other class members have been injured by the same
`course of conduct.” Id. at 1061 (quoting City of Royal Oak Ret. Sys. v. Juniper Networks, Inc., 2012
`WL 78780, at *5 (N.D. Cal. Jan. 9, 2012)). “The test for adequacy is whether the class representative
`and his counsel ‘have any conflicts of interest with other class members’ and whether the class
`representative and his counsel will ‘prosecute the action vigorously on behalf of the class.’” Id.
`(quoting City of Royal Oak Ret. Sys., 2012 WL 78780, at *5).
`Movant’s claims are typical of those possessed by other class members because he suffered
`the same injury, from the same conduct. Indeed, during the Class Period, Movant (i) purchased at
`an inflated price unregistered securities from, or that were promoted by, Defendants (see Roche
`Decl. Ex. C ¶ 3); (ii) purchased those unregistered securities in reliance on Defendants’
`misrepresentations and omissions; and (iii) sold his Terra Tokens at a significant loss following the
`disclosure of Defendants’ fraudulent conduct (see Roche Decl. Ex. B).
`Movant and his counsel are likewise adequate representatives of the Class because, to their
`knowledge, they do not have any conflicts of interest with other class members, and they will
`vigorously prosecute this action. The latter point is confirmed not only by the efforts of Roche
`Freedman and DNF to date in investigating the claims set forth in the Complaint, but also by the
`fact that Movant is an experienced and knowledgeable crypto investor who (i) incurred significant
`losses as a result of Defendants’ conduct, (ii) adopts the allegations in the Complaint, and (iii) is
`fully committed to obtaining the best result for the Class. (See Roche Decl. Ex. A ¶ 2; Roche Decl.
`Ex. C ¶ 3); see also Malriat v. QuantumScape Corp., 2021 WL 1550454, at *4 (N.D. Cal. Apr. 20,
`2021) (adequacy requirement satisfied where prospective lead plaintiff was experienced investor
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`NOTICE OF MOTION AND MOTION TO APPOINT
`LEAD PLAINTIFF AND CO-LEAD COUNSEL – 5:22-CV-03600-BLF
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`who lost money as a result of defendant’s alleged misconduct); Saint Jermain v. Fluidigm Corp.,
`2020 WL 7342717, at *4 (N.D. Cal. Dec. 14, 2020) (adequacy requirement satisfied where
`prospective lead plaintiff contended that there was “no evidence of antagonism between his interests
`and those of the class” and that he had “a significant interest in prosecuting the action based on his
`large financial losses”).
`B.
`The Court Should Appoint Roche Freedman And DNF As Co-Lead Counsel
`Movant has selected Roche Freedman and DNF as his counsel and represents that Roche
`Freedman and DNF are fully capable of litigating this case. (See Roche Decl. Ex. C ¶¶ 9-10); see
`also Perlmutter, 2011 WL 566814, at *14 (deferring to selection, where lead plaintiff represented
`that “its chosen counsel is fully capable of litigating this case effectively and expeditiously”). Given
`that Roche Freedman and DNF have extensive experience in prosecuting securities fraud claims,
`Movant’s choice is reasonable and should not be set aside. See Mulquin v. Nektar Therapeutics,
`2019 WL 1170774, at *3 (N.D. Cal. Mar. 13, 2019) (deferring to lead plaintiff’s selection, where
`counsel had “extensive experience as counsel in securities class actions”); accord Ziolkowski v.
`Netflix, Inc., 2017 WL 2572583, at *3 (N.D. Cal. June 14, 2017); Doherty v. Pivotal Software, Inc.,
`2019 WL 5864581, at *12 (N.D. Cal. Nov. 8, 2019); Vataj v. Johnson, 2020 WL 532981, at *3
`(N.D. Cal. Feb. 3, 2020); Habelt, 2021 WL 2207365, at *2; In re Lyft Securities Litig., 2020 WL
`1043628, at *7.
`Indeed, in D’Arcy v. Sequential Brands Group, Inc., the court recognized that Roche
`Freedman “has extensive experience and expertise in the field of securities litigation and has
`successfully prosecuted numerous securities fraud class actions and obtained excellent recoveries
`on behalf of defrauded investors,” and appointed Roche Freedman as lead counsel. No. 2:21-cv-
`02305, Dkt. No. 25 (C.D. Cal. June 11, 2021). Roche Freedman has likewise recently secured lead
`counsel appointments in numerous other matters, including Valenti v. Dfinity USA Research LLC et
`al., No. 3:21-cv-06118-JD (N