SAPIR v. AVERBACK et al

Filing 16

OPINION fld. Signed by Judge Jose L. Linares on 2/26/15. (sr, )

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

ROY SAPIR, on behalf of himself and all
others similarly situated,

Civil Action No. 14-CV-07331

Plaintiff,
v.

OPINION

PAUL AVERBACK and NYMOX
PHARMACEUTICAL CORPORATION,
Defendants.
JOSE L. LINARES, U.S.D.J.
This matter comes before the Court upon four motions subm
itted by various plaintiffs in

this case to: 1) appoint lead plaintiff; and 2) appoint lead
counsel. (ECF Nos. 6, 7, 11, 12).
Pursuant to Rule 78 of the Federal Rules of Civil Procedur
e, no oral argument was heard. Upon
consideration of the submissions, and for the reasons stated belo
w, the motion by Plaintiff, Nymox
Investor Group, consisting of Harry Lattanzio and And
rew Silverman (hereinafter the
“Lattanzio/Silverman Nymox Investor Group”), (ECF No.
11), is GRANTED. Accordingly,
motions by Gil Rodriguez, (ECF No. 6), Charles Tuskes,
(ECF No. 7), and the Nymox Investor
Group consisting of Roy Sapir, Norman Jacobs
and Stephen Taylor (hereinafter the
“Sapir/Jacobs/Tuskes Nymox Investor Group”), (ECF No.
12), are DENIED.
I. BACKGROUND

This action is brought on behalf of all persons who purc
hased the securities of Nymox
Pharmaceutical Corporation (“Nymox”) between Janu
ary 31, 2011 and November 2, 2014,

inclusive (“Class Period”). Plaintiffs allege violations of
the Securities and Exchange Act of 1934
(the “Exchange Act”) against the Nyrnox and Paul Aver
back (hereinafter “Mr. Averback”).
Nymox is a pharmaceutical company with a focus on resea
rching and developing products for the
elderly. (Complaint ¶ 6). This lawsuit is focused on the
Nymox’s efforts to develop a proprietary
drug candidate referred to as “NX- 1207” which purported
ly treats “benign prostatic hyperplasia
(BPH),” (Id.

¶ 6). Defendant, Mr. Averback is the Company’s President and Chairman. (Id. 7).
¶

During the Class Period, the Complaint alleges that Nym
ox and Mr. Averback made a number of
false and misleading statements concerning the efficacy
of NX- 1207 and, specifically, the results
of testing during the drug’s Phase 3 trials. (Id.

¶ 9).

On November 3, 2014, Mr. Averback stated during an earn
ings conference call that testing
for NX-1207 was highly subjective in nature. (Id.

¶ 11). Consequently, testing for NX-1207 was

very unlikely to yield statistically significant results and,
therefore, FDA approval of NX- 1207
was unlikely. (Id.

¶J 12-13). On this news, the price of Nymox stock fell by approximately 82%

to close at $0.93 per share on November 3, 2014. (Id. 16).
Each of the following Plaintiffs bring
¶
motions to be lead plaintiff in this action and appoint
their own counsel as lead counsel: the
Lattanzio/Silverman Nymox Investor Group, Gil
Rodriguez, Charles Tuskes, and the
Sapir/Jacobs/Tuskes Nymox Investor Group.

II. LEGAL STANDARD

The Private Securities Litigation Reform Act (here
inafter “PSLRA”) sets forth procedures
for the selection of Lead Plaintiff in class actions
brought under the Exchange Act. The PSLRA
directs courts to consider any motion to serve as Lead
Plaintiff filed by class members in response
to a published notice of class action by the latter of(i)
90 days after the date of publication, or (ii)

as soon as practicable after the Court decides any pending moti
on to consolidate. 15 U.S.C.

§ 78u-

4(a)(3)(B)(i) and (ii).’ The PSLRA provides a “rebuttable presu
mption” that the most “adequate
plaintiff’ to serve as Lead Plaintiff is the “person or grou
p of persons” that:
(aa) has either filed the complaint or made a motion in respo
nse to a
notice...;
(bb) in the determination of the Court, has the largest financial
interest
in the relief sought by the class; and
(cc) otherwise satisfies the requirements of Rule 23 of the Fede
ral
Rules of Civil Procedure.
15 U.S.C.

§ 78u-4(a)(3)(B)(iii). In deciding a motion to serve as lead plaintiff, the Court should

limit its inquiry to the typicality and adequacy prongs of Rule
23(a), and defer examination of the
remaining requirements until the Lead Plaintiff moves for
class certification. See Hoxworth v.
Blinder,Robinson & Co., 980 F.2d 912, 924 (3d Cir. 1992);
see also In re Nice Sys. Secs. Litig.,
188 F.R.D. 206, 217 (D.N.J. 1999). The PSLRA vests auth
ority in the lead plaintiff to select and
retain counsel to represent the Class, subject to the Court’s appr
oval. 15 U.S.C. §78u-4(a)(3)(B)(v).

III. DISCUSSION
A. Largest Financial Interest in the Relief Sought

Each of the moving Plaintiffs have represented to the Cou
rt the amount of losses they
suffered as a result of Nymox’s violation of the Exchange
2
Act. However, the Lattanzio/Silverman
Nymox Investor Group has the largest financial interest in
the relief sought with $660,203.00 in

Plaintiff in this action, which was filed on Novemb
er 24, 2014, published a notice on Globe
Newswire on November 25, 2014. This notice anno
unced that applications for appointment as
lead plaintiff had to be made by January 26, 2015, to
which, all relevant Plaintiffs complied.
2
Court needs not determine which calculating methodol
ogy to use as the
Lattanzio/Silverman Nymox Investor Group has the mos
t losses regardless of method.

claimed losses. Indeed, the Sapir/Jacobs/Tuskes Nymox Inve
3
stor Group submitted a letter to the
Court stating that:

after reviewing the motions filed by the various lead plain
tiff
movants in the above-captioned action, it appears that
the SJT
Nymox Investor Group does not have the largest financial inter
est
in the relief sought in the litigation and is, therefore,
not the
presumptive Lead Plaintiff. The Lattanzio/Silverma Nym
n
ox
Investors Group appear to have financial interests in excess
of
$600,000.00, thus significantly larger than the other movants.
(ECF No. 13). The determination of which candidate has
the largest loss is by far the most
important factor in determining who should be the lead plain
tiff. See Local 144 Nursing Home
Pension Fund v. Honeywell Int’l, Inc., No. 00-3605, 2000
U.S. Dist. LEXIS 16712, at *14 (D.N.J.
Nov. 16, 2000). The presumptive lead plaintiff must be appo
inted unless it is proven that the
movant will not satisfy the typicality and adequacy requirem
ents of Rule 23. The Court therefore
finds Lattanzio/Silverman Nymox Investor Group is the presu
mptive lead plaintiff.
B. Adequacy/Typicality

The typicality inquiry is intended to assess whether the actio
n can be efficiently maintained
as a class and whether the named plaintiffs have incentives
that align with those of absent class
members so as to assure that the absentees’ interests will
be fairly represented. 3B Moore &
Kennedy, ¶ 23.06—02; 1 Newberg & Conte, 3.13. “Typ
icality entails an inquiry whether ‘the
§
named plaintiffs individual circumstances are markedly diffe
rent or the legal theory upon which
the claims are based differs from that upon which the claim
s of other class members will perforce
be based.’ “Hassine v. Jeffes, 846 F.2d at 177 (3d Cir.
1988). “[F]actual differences will not
render a claim atypical if the claim arises from the same
event or practice or course of conduct that
...

Gil Rodriguez, claims losses of $45,424.54. Charles Tusk
es claims losses of $194,226.00. The
Sapir/Jacobs/Tuskes Nymox Investor Group claims losse
s of $301 .047.31.

gives rise to the claims of the class members, and if it is base
d on the same legal theory.” Grasty
v. Amalgamated Clothing & Textile Workers Union, 828 F.2d
123, 130 (3d Cir.l987). Because
the Lattanzio/Silverman Nymox Investor Group acquired
Nymox securities during the Class
Period at prices inflated by Defendants’ materially false state
ments and have represented to the
Court their claims do not conflict or compete with the claim
s of other class members, the Court
finds the Lattanzio/Silverman Nymox investor Group satis
fies the typicality requirement.
Under Rule 23(a)(4), the representative party must “fairly
and adequately protect the
interests of the class.” The inquiry that a court shou
ld make regarding the adequacy of
representation requisite of Rule 23(a)(4) is to determine that
the putative named plaintiff has the
ability and the incentive to represent the claims of the class vigo
rously, that he or she has obtained
adequate counsel, and that there is no conflict between the individ
ual’s claims and those asserted
on behalf of the class. See General Telephone Co. v. Falc
on, 457 U.S. 147, 157 n. 13, 102 5.Ct.
2364. 2370 n. 13, 72 L.Ed.2d 740 (1982); Wetzel v. Libe
rty Mutual Ins. Co., 508 F.2d 239, 247
(3d Cir.) (“the plaintiffs attorney must be qualified, expe
rienced, and generally able to conduct
the proposed litigation

...

and

...

must not have interests antagonistic to those of the class”)

The Lattanzio/Silverman Nymox Investor Group has inter
ests aligned with those of the
other class members where they would fairly and adeq
uately protect the interests of the class.
Similarly the Lattanzio/Silverman Nyrnox Investor Grou
p has represented to the Court why their
attorneys are qualified and experienced, of which, the
Court agrees. Therefore, the adequacy
requirement is met as well. Overall, after meeting the
adequacy and typicality requirements and
because the Lattanzio/Silverman Nymox Investor Grou
p has the largest financial interest by
approximately a $300,000 margain, the Court will appo
int the Lattanzio/Silverman Nymox
Investor Group as Lead Plaintiff in this action.

C. Choice of Counsel

Having found the Lattanzio/Silverman Nymox
Investor Group to be the Lead Plaintiff in
this action, the PSLRA vests authority in the Latta
nzio/Silverman Nymox Investor Group to selec
t
and retain counsel to represent the Class,
subject to the Court’s approval. 15 U.S.C. §78u
4(a)(3)(B)(v). The Court finds Brower Piven,
P.C., has not only prosecuted complex securities
fraud class actions, but has also successfully pros
ecuted many other types of complex class actions
as lead and/or class counsel. Similarly, Carella
Byrne, Cecchi, Olstein, Brody & Agnello, P.C.
, is
a well-respected law firm, and its attorneys
have experience litigating complex commerc
ial
actions. (See Cecchi Decl., Exhibit F). The Cou
rt hereby approves Brower Piven, P.C., as Lead
Counsel and Carella Byrne, Cecchi, Olstein,
Brody & Agnello, P.C., as Liaison Counsel
for the
Class.

IV. CONCLUSION

For the reasons set forth above, Lattanzio/Silverma
n Nymox Investor Group’s motion to
appoint lead plaintiff and lead counsel, (ECF
No. 11), is GRANTED, and the remaining Plain
tiffs’
motions are therefore DENIED. (ECF Nos.
6, 7, 12). An appropriate Order accompanies
this
Opinion.

Date:

February2O15