Case 3:17-cv-08945-MAS-DEA Document 21 Filed 07/27/18 Page 1 of 8 PageID: 641
`Case 3:17—cv-08945-MAS-DEA Document 21 Filed 07/27/18 Page 1 of 8 PageID: 641
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`NOT FOR PUBLICATION
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`UNITED STATES DISTRICT COURT
`DISTRICT OF NEW JERSEY
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`RANDY SMITH, individually and on
`behalfofall others similarly situated,
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`Plaintiff,
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`v.
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`:
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`:
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`ANTARES PHARMA, INC, et al.,
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`Defendants.
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`SI-IIPP1 District Judge
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`Civil Action No. 17-8945 (MAS) (DEA)
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`MEMORANDUM OPINION
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`This matter comes before the Court on two motions: (i) Faraj Touchan’s (“Touchan”)
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`Motion for Appointment as Lead Plaintiff and Approval of Lead Counsel (ECF No. 7); and
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`(ii) Serghei Lungu’s (“Lungu”) Motion for Appointment as Lead Plaintiff and Approval of
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`Counsel (ECF No. 9).1 Touchan and Lungu each filed opposition (ECF Nos. 12, I4) and Lungu
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`replied (ECF No. 16). The Court has carefully considered the parties’ submissions and decides
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`the matter without oral argument pursuant to Local Civil Rule 78.1. For the reasons set forth
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`below, Lungu’s motion is granted and Touchan’s motion is denied without prejudice. The Court
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`1 Antares Investor Group (consisting of Tai Duong, Dennis Roof, Robert Szczodrowski, Qiang
`Xie, and Daniel DeYoe) and Rehan Khan also moved to be appointed lead plaintiff and to appoint
`lead counsel.
`(ECF Nos. 8, 10.) These parties, however, later filed Notices of Non-Opposition,
`acknowledging that, after review of the submissions made by other movants, it appears they do
`not possess the “largest financial interest in the relief sought by the class’ as required by the
`[Private Securities Litigation Reform Act (“PSLRA”)]” and, accordingly, do not oppose the
`competing motions.
`(Antares Investor Group Not. of Non—Opp’n 2, ECF No. 13; Khan Not. of
`Non—Opp’n 2, ECF No. 17.) Both parties noted, however, that should the Court find other movants
`inadequate, then they stand ready to serve as lead plaintiff and counsel. (kl)
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`

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`appoints: Lungu as Lead Plaintiff; Pomerantz LLP as Lead Counsel; and Lite DePalma Greenberg,
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`LLC as Liaison Counsel.
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`1.
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`BACKGROUND
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`This case is a putative securities class action brought on behalf of the investors who
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`acquired Antares Pharma, Inc. (“Antares”) securities between December 21, 2016 and October 12,
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`2017 (“Class Period”). Defendants Antares, Robert F. Apple. Antares’s CEO, and Fred M. Powell,
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`Antares’s CFO, allegedly made materially deceptive and misleading disclosures about the FDA
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`approval process of Xyosted in certain press releases and SEC filings.
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`(See generally Compl.
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`W 20-32, ECF No. 1.) Specifically, Antares allegedly “made false and/or misleading statements
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`and/or failed to disclose that: (i) Antares had provided insufficient data to the FDA in connection
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`with its NDA for Xyosted; (ii) and accordingly, Antares had overstated the approval prospects for
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`Xyosted; and (iii) as a result of the forgoing, Antares’s public statements were materially false and
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`misleading at all relevant times.” (1d. 11 5.)
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`First-filed plaintiff Randy Smith initiated this action on October 23, 2017. Pursuant to 15
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`U.S.C. § 78u—4(a)(3)(A)(i), Smith published notice via Globe Newswire on that same day,
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`informing investors within the putative class that they had until December 22, 201',72 to move for
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`appointment as lead plaintiff in the action. (Id; Morsy Decl. Ex. A, ECF No. 7-3.) Both Touchan
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`and Lungu timely moved for appointment, as both motions were filed on December 22, 2017 (see
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`ECF Nos. 7, 9), and both filed certifications pursuant to 15 U.S.C. § 78u—4(a)(2) (see ECF Nos.
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`7-4, 9—2).
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`3 See 15 U.S.C. § 78u—4(a)(3)(A)(i).
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`

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`II.
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`LEGAL STANDARD
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`The Court must appoint the most adequate plaintiff pursuant to the PSLRA.
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`15 U.S.C.
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`§ 78u-4(a)(3)(B)(ii). The PSLRA requires the court to adopt a rebuttable presumption that the
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`most adequate plaintiff is the person (or group of persons) who: (i) filed the complaint or moved
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`to be appointed lead plaintiff; (ii) based on the court’s determination, “has the largest financial
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`interest in the relief sought by the class”; and (iii) satisfies the requirements of Rule 23 of the
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`Federal Rules of Civil Procedure. Id. § 78u—4(a)(3)(B)(iii)(l); Aguilar v. Vitamin Shoppe, Inc, No.
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`17-6454, 2018 WL 1960444, at *5 (D.N.J. Apr. 25, 2018) (citing Lewis v. Lipocine Inc, No. 16-
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`4009, 2016 WL 7042075, at *4 (D.N.J. Dec. 2, 2016)). “At this stage, in the context ofthe PSLRA,
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`Rule 23 requires that the party or parties seeking to represent a class (1) have claims or defenses
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`that are typical of the claims or defenses of the class, (the ‘typicality requirement’) and (2) be able
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`to fairly and adequately protect the interests of the class, (the ‘adequacyrequirement)” Aguilar,
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`2018 WL 1960444, at *4 (citing Fed. R. CiV. P. 23(a); In re Cendant Corp. Ling, 264 F.3d 201,
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`263 (3d Cir. 2001); Lewis, 2016 WL 7042075, at *4.) The Court will conduct a further analysis
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`of the Rule 23 requirements in connection with its consideration of any motion for class
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`certification. Id.
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`“Once a presumptive lead plaintiff is located, the court should then turn to the question [oi]
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`whether the presumption has been rebutted.” In re Cendnnr, 264 F.3d at 268. To rebut the
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`presumption, a purported class member must provide proof “that the presumptively most adequate
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`plaintiff will not fairly and adequately protect the interests of the class or is subject to unique
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`defenses that render such plaintiff incapable of adequately representing the class.” Sklar v. Amarin
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`Corp. PLC, No. 13-6663, 2014 WL 3748248, at *5 (D.N.J. July 29, 2014). “A proposed class
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`representative is neither typical nor adequate if the representative is subject to a unique defense
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`that is likely to become a major focus of the litigation.” Beck v. Maximus, Inc, 457 F.3d 291, 301
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`(3d Cir. 2006).
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`III.
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`DISCUSSION
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`A.
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`“Largest Financial Interest”
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`In determining which movant has the largest financial interest in the relief sought by the
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`litigation, “courts should consider (1) the number of shares that the movant purchased during the
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`putative class period; (2) the total net funds expended by the plaintiffs during the class period; and
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`(3) the approximate losses suffered by the plaintiffs.” In re Cendant, 264 F.3d at 262 (citing Lax
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`v. First Merchants Acceptance Corp, No. 97 C 2716, 1997 WL 461036, at =*5 (ND. Ill. Aug. 6,
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`1997)).
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`“The most critical among these factors is the approximate loss suffered.” Patel v.
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`Zoompass Holdings, Inc, No. 17—3831, 2017 WL 4179814, at *1 (D.N.J. Sept. 20, 2017) (Citing
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`as examples In re Vieuron Pharms., Inc. See. Ling, 225 F.R.D. 508, 511 (ED. Pa. 2004); Janoviei
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`v. DVI, Inc, No. 03-4795, 2003 WL 22849604, at *12 (ED. Pa. Nov. 25, 2003); In re Am. Bus.
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`Fin. Serra, Inc. See. Ling, 2004 WL 1221353, at *1, (ED. Pa. Jun. 3, 2004); A.F.I.K. Holding
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`SPRL v. Fess, 216 F.R.D. 567, 572 (D.N.J. 2003)).
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`Touchan states that he purchased a total of 30,000 Antares shares and 26,435 net Antares
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`shares during the Class Period, spent $110,565.86 in net funds, and incurred losses in an amount
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`of $49,236.66.3 (Touchan’s Moving Br. 6, ECF No. 7-1.) Lungu, on the other hand, claims that
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`he purchased 50,000 Antares shares and retained 40,000 shares, spent $189,158 on his purchases,
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`and suffered a loss of $61,763.69. (Lungu’s Moving Br. 5, ECF No. 9-1.)
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`3 Lungu asserts that Touchan actually suffered a maximum loss of $41 ,295 because his transaction
`history reflects share prices outside of the range of prices during the Class Period, and accordingly,
`his claimed losses were inaccurately calculated.
`(Lungu’s Opp’n Br. 4 n.4, ECF No. 12.) The
`difference in amounts, however, is not material to the Court’s analysis.
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`

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`Touchan asserts that When determining which movant is the presumptively most adequate
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`plaintiff, courts afford the greatest weight to the approximate losses suffered and only assess the
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`other movants’ suitability if the presumptive plaintiff does not comport with Rule 23. (Touchan’s
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`Opp’n Br. 2~3, ECF No. 14.) When movants have claimed similar amounts of losses, however,
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`Touchan asserts that courts may deviate from this process. (Id. at 3.) Here, according to Touchan,
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`he and Lungu suffered roughly equal
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`losses of $49,236.66 and $61,763.69, respectively—a
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`difference of only about $12,500. (Id. at 34.) Accordingly, Touchan asserts that for the purposes
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`of the Court’s analysis, both “movants have equivalent financial interests.” (Id. at 4.) Further,
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`Touchan asserts that Lungu is a day trader because he bought and sold 10,000 shares on October
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`12, 2017 and is, therefore, subject to a unique defense that renders him inadequate and atypical.
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`(Id. at 6-7.) Touchan asserts that Lungu may not be able to invoke the fraud-on-the-market
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`presumption of reliance and cites examples where courts have disqualified lead plaintiff movants
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`as a result of their day trading activities.4 (Id. at 7-8.) Finally, Touchan asserts that even if the
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`Court does not find Lungu to be inadequate and atypical, because both movants have “roughly
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`equal interests” and neither has a “significantly larger” interest, both should be appointed co-lead
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`plaintiffs.
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`(Id. at 9-10.) Finally, according to Touchan‘s calculations, he and Lungu have
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`equivalent stakes in the litigation because the difference in their estimated recoveries is only
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`$263.06.
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`(Id. at 10.)
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`Lungu asserts that he has the largest financial interest in the relief sought because he
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`theory allows “‘reliance [to] be presumed when a fraudulent
`4 The fraud-on-the market
`misrepresentation or omission impairs the value ofa security traded in an efficient market. ”’ Rabin
`v. NASDAQ OMS PHLX, LLC, 712 F. App’x 188, 195 (3d Cir. 2017) (quoting Malack v. BDO
`Seidman, LLP, 617 F.3d 743, 747 (3d Cir. 2010)). “This presumption is based on the hypothesis
`that the price of a stock ‘in an open and developed securities market .
`.
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`is determined by the
`available material information regarding the company and its business.” Id. (quoting Basic Inc.
`v. Levinson, 485 U.S. 224, 241 (1988)).
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`

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`suffered the largest monetary loss and retained the most Antares shares after the Class Period.
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`(Lungu’s Opp’n Br. 3-4.) He further argues that the PSLRA requires that to overcome the
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`presumption of adequacy, any challenger must presen “proof” that the presumptive lead plaintiff
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`is,
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`in fact, atypical or inadequate.
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`(Id. at 4-5 (quoting 15 U.S.C. § 78u-4(a)(3)(B)(iii)(II).)
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`According to Lungu, he and Touchan did not suffer equivalent losses because his loss is about fifty
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`percent greater than Touchan’s loss. (Lungu’s Reply Br. 2, 4, ECF No. 16.) Lungu distinguishes
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`cases Touchan cited in his brief and states that the comparative losses in those cases were different
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`(e.g., $351,916 vs. $368,202, a five percent difference, and $1.78 million vs. $1.82 million, a two
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`percent difference).
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`(Id. at 4.) Lungu asserts that: (i) he is not a “day trader” pursuant to FINRA
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`Rule 4210, which defines “day trading” as “the purchasing and selling or the selling and purchasing
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`of the same security on the same day in a margin account”; (ii) Touchan has cited no case where a
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`court found a presumptive lead plaintiff with a similar trading history to be a day trader (Lungu’s
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`Opp’n Br. 4); and (iii) Touchan’s argument is baseless and cannot serve as the “proof” required to
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`rebut the presumption of Lungu’s adequacy (Lungu’s Reply Br. 6). Lungu notes that he only made
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`four purchases of Antares stock during the Class Period and only once purchased and sold shares
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`on the same day.5 (Id)
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`B. .
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`Rule 23 Adequacy and Typicality
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`Both movants assert that they meet the typicality and adequacy requirements of Rule 23
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`for similar reasons: (i) the factual and legal bases of their claims are typical to the class, as they
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`purchased Antares shares during the Class Period, were damaged by Defendants’ allegedly false
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`and misleading statements, and as a result, have federal securities law claims; and (ii) their interests
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`5 Lungu’s transaction history is as follows: October 2, 2017, purchase of 10,000 shares; October
`4, 2017, purchase of 20,000 shares; October 9, 2017, purchase of 10,000 shares; and October 12,
`2017, purchase and sale of 10,000 shares. (Lungu‘s Reply Br. 6.)
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`are aligned with and not antagonistic to the putative class’s interests. (Touchan’s Moving Br. 67;
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`Lungu’s Moving Br. 6-7.) Finally, Touchan argues that counsel of his choice, Faruqi & Faruqi,
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`LLP has extensive experience handling complex class actions and provides multiple examples of
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`cases in which the firm was appointed lead counsel, while Lungu states that he has chosen
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`Pomerantz LLP as Lead Counsel and Lite DePalma Greenberg, LLC as Liaison Counsel, both of
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`whom possess broad experience in litigating class actions and securities cases.
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`(Touchan’s
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`Moving Br. 8-10; Lungu’s Moving Br. 8.)
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`C.
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`Analysis
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`The Court finds that Lungu is the presumptively most adequate plaintiff because he
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`suffered the greatest loss, the factor that carries the most weight in the Court’s analysis. Lungu
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`also retained a greater number of shares. See Patel, 2017 WL 4179814, at *1-2. The Court finds
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`that Touchan has not carried his burden to rebut the presumption of Lungu’s adequacy. In support
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`of the proposition that Lungu and Touchan suffered essentially equivalent amounts of loss,
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`Touchan cites two out-of—circuit district court cases that im olved losses of different magnitude.
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`The Court further finds that Lungu sufficiently satisfies the typicality and adequacy requirements
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`of Rule 23 at this stage of the litigation. Based on only one same-day purchase and sale, Touchan
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`asserts that Lungu is a day trader and, therefore, subject to a special defense. Finally, the Court
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`finds the counsel of Lungu’s choice, Pomerantz LLP and Lite DePalma Greenberg, LLC, to be
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`sufficiently experienced in class actions and securities litigation to serve as Lead Counsel and
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`Liaison Counsel, respectively.
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`The Court notes, however, that if, as the litigation progresses, circumstances warrant that
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`the Court revisit its decision, “the decision reached here regarding appointment of lead plaintiff
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`and lead counsel may be re-opened.” Pirellz' Armstrong Tire Corp. Retiree Med. Benefits Trust v.
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`LaBranclte & C0,, 229 F.R.D. 395, 408 (S.D.N.Y 2004) (citing Z-Seven Fund, Inc. v. Motorcar
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`Parts & Accessories, 231 F.3d 1215, 1218 (9th Cir. 2000) (“The district court’s order designating
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`a lead plaintiff is not a conclusive, immutable determination of the issue. It can be revisited if
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`circumstances warrant”); In re Oxford Health Plans, 182 FRD. 42, 51 (S.D.N.Y. 1998)
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`(reserving the right to alter a co-lead plaintiff structure “at any time and for any reason”); cf.
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`Greebel v. FTP Software, Inc, 939 F. Supp. 57, 60 (D. Mass. 1996) (“This court also concludes
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`that its determination to appoint a person or persons as lead plaintiff must be without prejudice to
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`the possibility of revisiting that issue in considering a motion for class certification”); Metro
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`Services Inc. v. Wiggins, 158 F.3d 162, 165 (2d Cir. 1998) (holding that an order appointing a lead
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`plaintiff was not conclusive and not appealable Where the district court had specifically reserved
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`the right to revisit the designation».
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`IV.
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`CONCLUSION
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`Accordingly, for the reasons set forth above, Lungu’s Motion for Appointment as Lead
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`Plaintiff and Approval of Counsel is granted, and Touchan’s Motion for Appointment as Lead
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`Plaintiff and Approval of Lead Counsel is denied. The Court appoints Lungu as Lead Plaintiff,
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`Pomerantz LLP as Lead Counsel, and Lite DePalma Greenberg, LLC as Liaison Counsel. An
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`order consistent with this Memorandum Opinion shall be entered.
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`MICHAEL A. éHiPP
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`UNITED STATES DISTRICT JUDGE
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`Date: Julyiflgm8
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