Germond v. Spero Therapeutics, Inc. et al
MEMORANDUM & ORDER granting (9) Motion to Appoint Counsel; finding as moot (6) Motion to Appoint Counsel. This Court appoints Memon as lead plaintiff and approves Pomerantz as lead counsel. Saad's competing motion is denied as moot. See attached. Ordered by Magistrate Judge Roanne L. Mann on 9/19/2022. Associated Cases: 1:22-cv-03125-LDH-RLM, 1:22-cv-04154-LDH-RLM (Proujansky, Josh)
Case 1:22-cv-03125-LDH-RLM Document 18 Filed 09/19/22 Page 1 of 22 PageID #: 254
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
IN RE SPERO THERAPEUTICS, INC.
22-CV-3125 (LDH) (RLM)
22-CV-4154 (LDH) (RLM)
ROANNE L. MANN, UNITED STATES MAGISTRATE JUDGE:
Currently pending before this Court is the unopposed motion of Kashif Memon
(“Memon”) for appointment as lead plaintiff and approval of lead counsel. 1 See generally
Motion of Kashif Memon for Consolidation, Appointment as Lead Plaintiff, and Approval of
Lead Counsel (July 25, 2022) (“Memon Mot.”), Electronic Case Filing (“ECF”) Docket Entry
(“DE”) #9; Memon’s Memorandum of Law in Support of Motion (July 25, 2022) (“Memon
Mem.”), DE #9-2. For the following reasons, this Court grants Memon’s motion: Memon is
hereby appointed as lead plaintiff and Memon’s choice of counsel—Pomerantz LLP
(“Pomerantz”)—is approved as lead counsel.2
As discussed infra, another movant—Nabil Saad (“Saad”)—also timely filed a motion to be appointed lead
plaintiff. Saad, however, subsequently filed a notice of non-opposition to Memon’s motion. Accordingly, the
Court denies Saad’s motion as moot.
An order appointing lead plaintiff and approving lead counsel qualifies as a non-dispositive matter under Rule
72(a) of the Federal Rules of Civil Procedure (the “FRCP”), allowing this Court to issue a written order (i.e., a
Memorandum and Order), rather than a recommended disposition (i.e., a Report and Recommendation). See
Fed. R. Civ. P. 72(a). Multiple courts, including ones in this District, have concluded that such motions are nondispositive and may be disposed of by a magistrate judge. See, e.g., Darish v. N. Dynasty Mins. Ltd., 20-cv5917 (ENV), 2021 WL 1026567, at *1 n.3 (E.D.N.Y. Mar. 17, 2021) (collecting cases).
Case 1:22-cv-03125-LDH-RLM Document 18 Filed 09/19/22 Page 2 of 22 PageID #: 255
On May 26, 2022, plaintiff Richard S. Germond (“plaintiff Germond”), who is also
represented by Pomerantz, commenced this matter by filing a class action complaint against
Spero Therapeutics, Inc. (“Spero”) and individual defendants Ankit Mahadevia and Satyavrat
Shukla, both of whom hold officer-level positions at the company (collectively, “defendants”).
See generally Complaint (May 26, 2022) (“Compl.”), DE #1. The Complaint sets forth claims
under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”),
15 U.S.C. §§ 78j(b), 78t(a), and Rule 10b-5 promulgated thereunder, 17 C.F.R. § 240.10b-5,
as amended by the Private Securities Litigation Reform Act of 1995 (the “PSLRA”). See
Compl. ¶¶ 10, 42-57. The foregoing claims are asserted on behalf of all putative class
members who purchased or otherwise acquired Spero securities between October 28, 2021 and
May 2, 2022, inclusive of both dates (the “Class Period”).3 See id. ¶ 1.
Corporate defendant Spero is a “clinical-stage biopharmaceutical company, [which]
focuses on identifying, developing, and commercializing treatments for multi-drug resistant
. . . bacterial infections and rare diseases in the United States.” Id. ¶ 2. Spero’s “product
candidates include Tebipenem Pivoxil Hydrobromide (HBr), an oral carbapenem-class
antibiotic to treat complicated urinary tract infections[.]” Id. According to the Complaint, on
October 28, 2021, Spero issued a press release stating that it had submitted a new drug
application for the Tebipenem HBr tablets to the U.S. Food and Drug Administration (the
On July 15, 2022, Memon also filed a class action complaint in this Court against defendants—styled Memon v.
Spero Therapeutics, Inc. et al, 22-cv-4154 (the “Memon Action”)—which alleges substantially the same or similar
facts, but asserts an enlarged class period of from May 6, 2021 until May 2, 2022, inclusive of both dates. See
Complaint in 22-cv-4154 (July 15, 2022) (the “Memon Complaint”), DE #1; infra note 4. The two cases were
subsequently consolidated. See infra note 5.
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“FDA”). See id. ¶¶ 3, 22-23. 4 Subsequently, on November 10, 2021, Spero issued a press
release on the Tebipenem HBr tablets and held an earnings call with investors to discuss
Spero’s third-quarter 2021 results. See id. ¶¶ 24-25. On January 3, 2022, Spero issued a
second press release announcing, amongst other things, that the FDA had granted priority
review designation and accepted the new drug application for said tablets. See id. ¶ 26. The
Complaint alleges that the representations made by defendants in the foregoing earnings call
and press releases were false and/or misleading because defendants failed to disclose that “the
data submitted in support of the [new drug application for] Tebipenem HBr were insufficient to
obtain FDA approval” and “accordingly, it was unlikely that the FDA would approve the
Tebipenem HBr [new drug application] in its current form[.]” Id. ¶ 27. Defendants also
allegedly failed to disclose that, due to the foregoing issues, Spero would need to significantly
reduce its workforce and restructure its operations. See id.
On March 31, 2022, Spero issued one of two corrective disclosures in the form of a
press release, which revealed that the FDA had “identified deficiencies that preclude[d]
discussion of labeling and post-marketing requirements/commitments” for the Tebipenem HBr
tablets. Id. ¶ 28. Following this press release, “Spero’s stock price fell $1.59 per share, or
18.27%, to close at $7.11 per share on April 1, 2022.” Id. ¶ 29. Then, on May 3, 2022,
Spero announced in a second press release that the FDA had identified “substantive review
issues,” and, in light of this feedback, Spero would be “immediately defer[ring] current
commercialization activities for [T]ebipenem HBr[.]” Id. ¶ 30. Spero further announced that
The Memon Complaint, with its enlarged class period, includes references to a press release issued by Spero on
May 6, 2021, which proclaimed that the company was “off to a strong start in 2021” and had “completed a preNDA meeting for [T]ebipenem HBr with the FDA.” See Memon Complaint ¶ 23, in 22-cv-4154.
Case 1:22-cv-03125-LDH-RLM Document 18 Filed 09/19/22 Page 4 of 22 PageID #: 257
it planned to reduce its workforce by approximately 75 percent, restructure its operations to
reduce costs, and reallocate resources toward other clinical development programs. See id.
On the same day, “Spero’s stock price fell $3.24 per share, or 63.65%, to close at $1.85 per
share[.]” Id. ¶ 31.
On July 25, 2022, after the Complaint was filed, Memon and Saad each timely moved
to be appointed lead plaintiff in the instant class action. 5 See generally Memon Mot., DE #9;
Motion of Nabil Saad for Consolidation of Related Actions, Appointment as Lead Plaintiff,
and Approval of Lead Counsel (July 25, 2022), DE #6. Memon claims to have suffered
$163,918 in financial losses, see Memon Mem. at 2, DE #9-2; Memon Damages Analysis
(July 25, 2022) at 6, DE #9-4, whereas Saad purports to have suffered $92,072.53 in financial
losses, see Saad Mem. at 7, DE #7; Saad Loss Chart (July 25, 2022) at 2, DE #8-3.
Initially, movant Saad opposed Memon’s motion for appointment as lead plaintiff,
raising questions concerning Memon’s financial interest and loss calculation. See generally
Saad Opposition to Memon’s Motion (Aug. 8, 2022) (“Saad Opp.”), DE #12. More
specifically, Saad asserted that Memon lacks a “bona fide financial interest” in this action
because (1) Memon claims “to have sold 5,852 more shares than he certified he owned on June
30, 2021” and (2) Memon “certified that he engaged in at least 19 transactions that occurred at
On July 22, 2022, Memon, plaintiff Germond, and defendants jointly moved to consolidate the Memon Action
with the first-filed action and filed a joint stipulation to that effect. See generally Motion to Consolidate Cases
(July 22, 2022), DE #5. Because this request remained outstanding at the time of their submissions, Memon’s
and Saad’s motions also include requests for consolidation. See Memon Mem. at 4-5, DE #9-2; Saad
Memorandum in Support of Motion (July 25, 2022) (“Saad Mem.”) at 4-5, DE #7. In light of the previous
stipulation, however, the Honorable LaShann DeArcy Hall referred the two movants’ motions to the undersigned
magistrate judge for a determination limited to the appointment of lead plaintiff and lead counsel. See Referral
Order (Aug. 3, 2022). Subsequently, on August 5, 2022, Judge DeArcy Hall so-ordered the parties’ proposed
stipulation and consolidated the two related actions. See Stipulation and Order Consolidating Related Actions and
Extending Defendants’ Time to Respond to Complaints (Aug. 5, 2022), DE #10.
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prices outside the daily range on the days they were purportedly executed[.]” Id. at 1-2.
Several days later, however, Saad filed a notice of non-opposition to Memon’s motion to be
appointed lead plaintiff, in which Saad attributes his change in position to the fact that his
counsel “subsequently conferred with Mr. Memon’s counsel regarding the potential issues”
and that, “as a result of the conference, and upon further review of the record in the action,
Mr. Saad no longer opposes Mr. Memon’s motion.” Saad Notice of Non-Opposition (Aug.
15, 2022) (“Saad Non-Opposition”) at 1, DE #13.
Memon thereafter filed a reply, wherein Memon’s counsel clarifies that “Memon’s
Certification  inadvertently omit[ted] certain purchases of Spero stock that occurred prior to
the Class Period” and, taking these omitted stock purchases into account, Memon’s total loss is
$252,682. Memon Reply in Further Support of Motion (Aug. 15, 2022) (“Memon Reply”) at
3 n.2, DE #14. Memon’s counsel further represents that Memon’s Amended Certification
accurately sets forth Memon’s purchases and sales of Spero stock during the Class Period. See
id.; see generally Amended Certification (Aug. 15, 2022), DE #14-2.
Having determined that further information was required, the Court directed Memon to
“supplement his submissions to address the purported issues concerning his loss calculation and
candidacy for appointment as lead plaintiff, as outlined by Saad in his original Opposition.”
Order deferring ruling on . . . Motion to Appoint Counsel and Lead Plaintiff (Aug. 19, 2022).
Memon timely supplemented his submissions on August 24, 2022. See generally Memon
Supplemental Memorandum of Law in Further Support of Motion (Aug. 24, 2022) (“Memon
Supp. Mem.”), DE #15. In his supplemental memorandum, Memon contends that his original
Certification’s omission of certain stocks purchased prior to the Class Period does not violate
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the PSLRA and, thus, his certification was not defective on this ground. See id. at 3. Memon
further represents that he cured his failure to include two of his purchases of Spero stock
(totaling 200 shares) during the Class Period by filing the Amended Certification, which
accounts for these purchases. See id. at 3-4. Finally, Memon argues that there are no
“discrepancies” in his transaction prices for Spero stock because “all of the 19 transactions
flagged by [Saad] were at prices within the relevant pre- or post-market price ranges on the
dates in question.” Id. at 5. In support of his argument, Memon has provided a chart listing
the date, price, and pre- and post-market range for each of the relevant transactions. See id.
Appointment of Lead Plaintiff
The PSLRA establishes the procedure for the appointment of a lead plaintiff in cases
involving claims under the Exchange Act. The PSLRA’s legislative history reveals that
Congress enacted the law in response to class action abuses, as plaintiffs’ lawyers would
otherwise “race to the courthouse” to secure the lead plaintiff designation. In re Olsten Corp.
Sec. Litig., 3 F.Supp.2d 286, 294 (E.D.N.Y. 1998) (citation omitted), adhered to on
reconsideration sub nom. In re Olsten, 181 F.R.D. 218 (E.D.N.Y. 1998). “By enacting the
PSLRA, Congress intended to ‘increase the likelihood that parties with significant holdings in
issuers, whose interests are more strongly aligned with the class of shareholders, will
participate in the litigation and exercise control over the selection and actions of plaintiff’s
counsel.’” Id. (quoting H.R. Rep. No. 104-369 at 32 (1995)).
Procedurally, the law directs the court to “appoint as lead plaintiff the member or
members of the purported plaintiff class that the court determines to be most capable of
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adequately representing the interests of class members” (generally known as the “most
adequate plaintiff”). 15 U.S.C. § 78u-4(a)(3)(B)(i). “Courts follow a two-step process to
determine the most adequate plaintiff.” Darish, 2021 WL 1026567, at *5 (citing In re Gentiva
Sec. Litig., 281 F.R.D. 108, 111-12 (E.D.N.Y. 2012)). In the first stage of the inquiry, the
PSLRA establishes a “presumption” that the most adequate plaintiff is the person or group of
persons who or that:
(aa) has either filed the complaint or made a motion in response 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 Federal Rules of Civil
15 U.S.C. § 78u-4(a)(3)(B)(iii)(I).
Once the court determines that there exists a presumptively adequate lead plaintiff, it
must move to the second stage of the inquiry: whether that presumption has been sufficiently
rebutted by any member of the purported plaintiff class. See 15 U.S.C. § 78u4(a)(3)(B)(iii)(II). Specifically, the presumption “may be rebutted only upon proof by a
member of the purported plaintiff class that the presumptively most adequate plaintiff-(aa) will not fairly and adequately protect the interests of the class; or
(bb) is subject to unique defenses that render such plaintiff incapable of
adequately representing the class.”
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Timely Notification and Filing
As an initial matter, the PSLRA requires that the plaintiff who files the first action
publish notice to the class within 20 days of filing the action in “a widely circulated national
business-oriented publication or wire service,” advising members:
(I) of the pendency of the action, the claims asserted therein, and the purported
class period; and
(II) that, not later than 60 days after the date on which the notice is published,
any member of the purported class may move the court to serve as lead plaintiff
of the purported class.
15 U.S.C. § 78u-4(a)(3)(A)(i).
On May 26, 2022—the same day the Complaint was filed—Pomerantz, as counsel for
plaintiff Germond, published a notice in Globe Newswire announcing that a securities class
action had been filed against defendants. See generally Press Release (docketed on July 25,
2022), DE #9-5. This press release described the claims being asserted against defendants, as
well as the dates of the purported class period. See id. at 2-4. The published notice further
advised that those qualifying shareholders of Spero securities wishing to serve as lead plaintiff
in the purported class action should apply to the Court for the designation by July 25, 2022.
See id. at 2. No moving party has challenged the adequacy of the May 26, 2022 notice, and
the filing of a press release through Globe Newswire is an appropriate means of satisfying the
PSLRA’s notice requirement. See 15 U.S.C. § 78u-4(a)(3)(A)(i); see, e.g., Parot v. Clarivate
Plc, 22-cv-394 (ARR), 2022 WL 1568735, at *3 (E.D.N.Y. May 18, 2022) (“[T]he filing of a
press release through Globe Newswire is an appropriate means of satisfying the PSLRA’s
notice requirement.” (citations omitted)); Gutman v. Lizhi Inc., 21-CV-00317 (LDH)(PK),
Case 1:22-cv-03125-LDH-RLM Document 18 Filed 09/19/22 Page 9 of 22 PageID #: 262
2021 WL 8316283, at *1 (E.D.N.Y. Apr. 28, 2021) (finding plaintiff complied with PSLRA
notice requirement by timely publishing press release in Globe Newswire).
Based on the May 26, 2022 publication date, the 60-day period in which members of
the proposed class could move to serve as lead plaintiff of said class expired on July 25, 2022.
Having filed his motion on July 25, 2022, Memon has timely moved for lead plaintiff status.
See generally Memon Mot., DE #9. In the absence of any objection to the May 26, 2022
notice, and because Memon has complied with the PSLRA’s 60-day deadline to move to serve
as lead plaintiff of the putative class, the Court must next consider whether Memon has the
largest financial interest, see 15 U.S.C. § 78u-4(a)(3)(B)(iii)(I)(bb), and, if so, whether
Memon also satisfies the requirements of Rule 23 of the FRCP, see 15 U.S.C. § 78u4(a)(3)(B)(iii)(I)(cc).
Largest Financial Interest
The PSLRA requires courts to “adopt a presumption that the most adequate plaintiff
. . . has the largest financial interest in the relief sought by the class[,]” 15 U.S.C. § 78u4(a)(3)(B)(iii)(I)(bb), but offers no statutory guidance for determining which plaintiff has the
largest financial interest, see Darish, 2021 WL 1026567, at *5; In re Gentiva, 281 F.R.D. at
112. Courts in the Second Circuit have adopted the four “Olsten factors” to determine which
movant has the largest financial interest: “(1) the [total] number of shares purchased during the
class period; (2) the number of net shares purchased during the class period; (3) the total net
funds expended during the class period; and (4) the approximate losses suffered during the
class period.” In re Olsten, 3 F.Supp.2d at 295 (citing Lax v. First Merchs. Acceptance
Case 1:22-cv-03125-LDH-RLM Document 18 Filed 09/19/22 Page 10 of 22 PageID #: 263
Corp., No. 97 C 2715, 1997 WL 461036, at *5 (N.D. Ill. Aug. 11, 1997)); accord Chitturi v.
Kingold Jewelry, Inc., 20-CV-2886-LDH-SJB, 2020 WL 8225336, at *4 (E.D.N.Y. Dec. 22,
2020); In re Gentiva, 281 F.R.D. at 112. Most crucial to the Court’s determination is the
fourth factor—the approximate financial losses suffered. See Plymouth Cnty. Ret. Ass’n v.
Innovative Tech., Inc., 21 Civ. 4390 (VM), 2021 WL 4298191, at *2 (S.D.N.Y. Sept. 21,
2021), adhered to on reconsideration sub nom. Plymouth Cnty. Ret. Ass’n v. Array Tech.,
Inc., 2021 WL 5051649 (S.D.N.Y. Nov. 1, 2021); Darish, 2021 WL 1026567, at *5;
Baughman v. Pall Corp., 250 F.R.D. 121, 125 (E.D.N.Y. 2008). In the instant case, only
movant Memon still claims to possess the largest financial interest in this litigation. For the
reasons set forth below, the Court concludes that Memon has suffered the greatest loss and is
therefore the movant with the largest financial interest.
Relevant Class Period
In calculating his financial losses, Memon apparently relies upon the class period set
forth in the Memon Complaint: May 6, 2021 until May 2, 2022, inclusive of both dates. See
Memon Mem. at 1 n.1, DE #9-2 (“[T]o avoid excluding any potential class members,
[Memon’s] motion has adopted the larger class period alleged in the Memon Action.”). As an
initial matter, the Court addresses whether Memon may properly utilize this enlarged class
period, as opposed to the shorter class period of October 28, 2021 until May 2, 2022, inclusive
of both dates, as set forth in the Complaint filed by plaintiff Germond and the corresponding
PSLRA notice. See id.; Compl. ¶ 1; Press Release at 2, DE #9-5.
“A number of courts in this [Circuit] have found it appropriate to rely on the more
inclusive class for determining lead plaintiff because ‘it encompasses more potential class
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members.’” Hom v. Vale, S.A., 1:15-cv-9539-GHW, 2016 WL 880201, at *4 (S.D.N.Y.
Mar. 7, 2016) (citing In re Doral Fin. Corp. Sec. Litig., 414 F.Supp.2d 398, 402–03
(S.D.N.Y. 2006); Villella v. Chem. & Mining Co. of Chile Inc., Nos. 15 Civ. 2106(ER),
2015 WL 6029950, at *5 n.5 (S.D.N.Y. Oct. 14, 2015); In re Elan Corp. Sec. Litig., No.
1:08–cv–08761–AKH, 2009 WL 1321167, at *1 (S.D.N.Y. May 11, 2009); In re Gentiva,
281 F.R.D. at 113-14). Accordingly, consistent with these decisions, this Court finds that
utilizing the enlarged class period in the second-filed complaint is appropriate, given that it will
(as Memon points out) “avoid excluding any potential class members,” Memon Mem. at 1 n.1,
DE #9-2, and encompass more potential damages.
Application of this longer class period is proper even though the press release issued by
Pomerantz on behalf of plaintiff Germond incorporated the shorter class period in its
announcement of the class action. See Press Release at 2, DE #9-5. “The plain text of the
[PSLRA] provides that, where a subsequent action asserts ‘substantially the same claim or
claims ... only the plaintiff or plaintiffs in the first filed action shall be required to cause notice
to be published.’” Hom, 2016 WL 880201, at *4 (quoting 15 U.S.C. § 78u–4(a)(3)(A)(ii)).
“Based on this statutory text, courts typically ‘disfavor republication of notice under PSLRA
when a class period is extended beyond the period contained in the first-filed securities class
action.’” Id. (citation omitted). Generally, courts require republication of notice only “where
the amended complaint substantially alters the claims or class members.” Id. (citation
Here, plaintiff Germond filed the first complaint on May 26, 2022, and timely issued a
notice advising potential class members of the action and the deadline for applying for the
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position of lead plaintiff, thereby complying with the requirements of the PSLRA. See Press
Release at 2, DE #9-5. Moreover, the enlargement of the class period by approximately six
months does not substantially alter the composition of the class and is within the range of
enlargements deemed modest by other courts, so as not to necessitate republication of the
PSLRA notice. See, e.g., Hom, 2016 WL 880201, at *3-4 (finding that enlargement of class
period from approximately eight months to more than 2 years in the amended complaint did
not substantially alter the class members); cf. Kaplan v. S.A.C. Capital Advisors, L.P., 947
F.Supp.2d 366, 367 (S.D.N.Y. 2013) (finding that republication of notice was warranted
where the first-filed complaint included an original class period of only nine days and the
consolidated class-action complaint expanded that period by more than two years and added
new claims). As such, the Court finds that republication of the PSLRA notice is unnecessary.
Analysis of Largest Financial Interest
When utilizing the longer class period alleged in the Memon Action, it is readily
apparent that Memon has sustained the larger financial loss: 6 Memon sustained $252,682 in
losses,7 see Memon Reply at 3 n.2, DE #14, as compared with Saad’s losses of $92,072.53,
While Memon initially claimed to have suffered $163,918 in losses, see Memon Mem. at 2, DE #9-2, he later
amended his certification to account for two additional purchases of stock totaling 200 shares, which he purchased
during the longer class period set forth in the Memon Complaint, and which resulted in an increased loss total of
$252,682, see Memon Reply at 3 n.2, DE #14. Both loss figures are greater than those sustained by Saad and,
thus, the analysis set forth in this subsection remains unchanged regardless of whether the original or amended
loss figure is considered.
Memon apparently uses the “First-In-First-Out” (or “FIFO”) calculation method in determining his total loss
amount, see generally Memon Damages Analysis, DE #9-4; this calculation method assumes that “the first stocks
to be sold are the stocks that were acquired first[,]” Sallustro v. CannaVest Corp., 93 F.Supp.3d 265, 270 n.5
(S.D.N.Y. 2015) (citation omitted). While the “Last-In-First-Out” or “LIFO” method is largely preferred over
the FIFO method, the Second Circuit has yet to adopt a “categorical rule for the appropriate measurement of
losses where[, as here,] there is a pre-existing inventory of stock followed by purchases and sales during the class
period[.]” Id. Use of the FIFO method is not automatically disqualifying. See Ellenburg v. JA Solar Holdings
Co. Ltd., 262 F.R.D. 262, 265 (S.D.N.Y. 2009). Thus, at this early stage of the litigation, “it is sufficient [for
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see Saad Mem. at 7, DE #7. This factor is the most crucial of the Olsten factors and weighs
heavily in favor of finding that Memon has the greatest financial interest.
Movant Saad previously raised two main issues concerning Memon’s financial interest
in this litigation. See Saad Opp. at 2-4, DE #12. While Saad has retracted his concerns with
respect to these purported discrepancies, see Saad Non-Opposition at 1, DE #13, the Court
nevertheless addresses (and disposes of) each of these so-called issues in turn.
First, Saad questioned whether Memon had correctly calculated his losses, citing the
fact that Memon claims to have sold 5,852 more shares than he certified he owned as of June
30, 2021, yet Memon’s certification “does not indicate in his loss chart that he had any
opening position of Spero stock.” Saad Opp. at 2, DE #12. As Memon explains in his
supplemental memorandum, he did own shares of Spero stock prior to the enlarged class
period, see Memon Supp. Mem. at 3, DE #15, and he permissibly accounted for these shares
in his loss calculations. Contrary to Saad’s subsequently retracted assertions, Memon’s
certification also complies with the PSLRA’s requirement that a movant’s certification set
“forth all of the transactions of the plaintiff in the security that is the subject of the complaint
during the class period specified in the complaint[.]” 15 U.S.C. § 78u-4(a)(2)(A)(iv)
(emphasis added). The plain text of the PSLRA does not require that transactions occurring
prior to the applicable class period be included in said certification.
In addition, Saad also characterized 19 of Memon’s transactions as “discrepancies”
because the prices of these transactions fell outside the given market range for the date on
which they occurred. See Saad Opp. at 1, DE #12; Saad Analysis of Memon’s Transactions
the Court] to find that, under any analysis, the financial interest of [Memon] exceeds that of [Saad].” Hom, 2016
WL 880201, at *5 n.2.
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(Aug. 8, 2022) at 2, DE #12-2. More specifically, Saad complained that “Memon does not
explain the[se] discrepancies.” Saad Opp. at 1, DE #12. But Memon later clarified that his
transactions were outside the market range because his “trades occurred before or after market
trading hours (i.e., pre- or post-market) on those dates[.]” Memon Supp. Mem. at 4, DE #15.
Further, in his supplemental submissions, Memon also included a detailed chart showing that
the 19 transactions in question were purchased or sold at prices within the pre- and post-market
range for the given dates of the transactions.8 See id. at 5. While the factual context in which
Memon transacted these trades is not entirely clear, “this [is an] issue [that] may be revisited
once any amended pleading is filed[,]” after the issuance of this Order. Gordon, 962
F.Supp.2d at 531. Thus, contrary to Saad’s initial opposition to Memon’s motion, these
transactions do not constitute unexplained discrepancies and are not necessarily disqualifying.
In sum, having reviewed Memon’s supplemental submissions and addressed Saad’s
concerns, the Court concludes that Memon is the movant with the largest financial interest.
Satisfaction of Rule 23
Having identified Memon as the plaintiff with the greatest loss and thus the largest
financial interest in the litigation, the Court must now “focus on that plaintiff alone and be
limited to determining whether he satisfies the other statutory requirements [of the PSLRA].”
Pirelli Armstrong Tire Corp. Retiree Med. Benefits Tr. v. LaBranche & Co., Inc., 229
F.R.D. 395, 411 (S.D.N.Y. 2004) (citations and internal quotations omitted); accord Khunt v.
The record does not support Saad’s earlier suggestion that Memon may have been a “short seller” and therefore
subject to unique defenses. See Saad Opp. at 3 n.2, DE #12. Moreover, the fact that Memon may have traded
“after hours” or “outside the market range does not . . . necessarily imply that he did not rely on the assumption
that the market price reflected all available information.” Gordon v. Sonar Capital Mgmt. LLC, 962 F.Supp.2d
525, 531 (S.D.N.Y. 2013) (citation omitted).
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Alibaba Group Holding Ltd., 102 F.Supp.3d 523, 535 (S.D.N.Y. 2015); Darish, 2021 WL
1026567, at *6. Under the PSLRA, in order to serve as lead plaintiff, the movant with the
largest financial interest must also satisfy the requirements of Rule 23 of the FRCP. See 15
U.S.C. § 78u-4(a)(3)(B)(iii)(I)(cc). Rule 23(a) specifies four requirements for certification of a
class action: numerosity, commonality, typicality, and adequacy. See Fed. R. Civ. P. 23(a).
Nevertheless, in determining whether the presumptively most adequate lead plaintiff
satisfies Rule 23 for the purposes of the PSLRA, a court need only consider whether that
movant’s claims are typical and adequate, and the presumptive lead plaintiff need only make a
preliminary, prima facie showing as to these two requirements. See In re Olsten, 3 F.Supp.2d
at 296 (“[T]he party moving for lead plaintiff of the consolidated action need only make a
preliminary showing that it satisfies the typicality and adequacy requirements of Rule 23.”
(citations omitted)); accord In re Gentiva, 281 F.R.D. at 112. At this initial stage of the
litigation, a “wide ranging analysis under Rule 23 is not appropriate . . . and should be left for
consideration of a motion for class certification.” Weinberg v. Atlas Air Worldwide Holdings,
Inc., 216 F.R.D. 248, 252-53 (S.D.N.Y. 2003) (citations and quotations omitted); accord
Darish, 2021 WL 1026567, at *6. 9
Memon has made the requisite preliminary showing with respect to Rule 23(a)’s
typicality requirement. Cases in the Second Circuit have held that the typicality requirement is
met where “each class member’s claim arises from the same course of events, and each class
“[A]ny finding that Rule 23 requirements have been met at this stage do[es] not preclude a later challenge in the
context of a Rule 23 class certification motion.” Ford v. Voxx Int’l Corp., No. 14-CV-4183(JS)(AYS), 2015 WL
4393798, at *3 (E.D.N.Y. July 16, 2015) (citations omitted).
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member makes similar legal arguments to prove the defendant’s liability.” Brady v. Top Ships
Inc., 324 F.Supp.3d 335, 350 (E.D.N.Y. 2018) (quoting In re Drexel Burnham Lambert Grp.,
Inc., 960 F.2d 285, 291 (2d Cir. 1992)). Similar to other potential class members, Memon
alleges that that defendants made certain misleading statements and/or failed to disclose certain
material facts concerning Spero’s new drug application for the Tebipenem HBr tablets; Memon
further alleges that he “purchased Spero securities during the [enlarged] Class Period at prices
artificially inflated by [d]efendants’ misrepresentations or omissions and was damaged upon the
disclosure of those misrepresentations and/or omissions.” Memon Mem. at 9-10, DE #9-2
(“The claims of Memon are typical of those of the Class.”). Thus, as the movant with the
largest financial interest, Memon has preliminarily demonstrated typicality under Rule 23(a).
Memon has likewise preliminarily satisfied the adequacy requirement of Rule 23(a).
The adequacy requirement is satisfied where: “(1) class counsel is qualified, experienced, and
generally able to conduct the litigation; (2) there is no conflict between the proposed lead
plaintiff and the members of the class; and (3) the proposed lead plaintiff has a sufficient
interest in the outcome of the case to ensure vigorous advocacy.” Kaplan v. Gelfond, 240
F.R.D. 88, 94 (S.D.N.Y. 2007) (citations omitted), on reconsideration in part sub nom. In re
IMAX Sec. Litig., 2009 WL 1905033 (S.D.N.Y. June 29, 2009); accord Plymouth Cnty. Ret.
Ass’n, 2021 WL 4298191, at *2.
In the instant case, Memon’s counsel—Jeremy A. Lieberman (a managing partner at
Pomerantz)—concedes that he made two relatively minor errors in drafting Memon’s
submissions related to his request to be appointed lead plaintiff. See Memon Reply at 3 n.2,
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DE #14; Memon Supp. Mem. at 4 n.2, DE #15. First, in Memon’s original Certification, Mr.
Lieberman inadvertently omitted two transactions (in the total amount of 200 shares) that
occurred during the enlarged class period and should have been accounted for in Memon’s loss
calculation; Mr. Lieberman later remedied this mistake by submitting the Amended
Certification on August 15, 2022. Compare Original Certification (July 25, 2022) at 3-6, DE
#9-6, with Amended Certification at 4, DE #14-2 (adding two transactions dated May 6, 2021
and May 10, 2021, respectively, for 100 shares of stock each). Next, in Memon’s reply, Mr.
Lieberman incorrectly referred to these two transactions as having occurred “prior to the Class
Period[,]” Memon Reply at 3 n.2, DE #14 (emphasis added), when, in fact, they occurred
during the enlarged class period beginning on May 6, 2021—a misstep that Mr. Lieberman
acknowledged and corrected in Memon’s supplemental memorandum of law, see Memon
Supp. Mem. at 4 n.2, DE #15.
“The goal of the PSLRA was not to select individuals for lead plaintiff who make no
mistakes[.]” Reitan v. China Mobile Games & Entm’t Grp., Ltd., 68 F.Supp.3d 390, 399
(S.D.N.Y. 2014). “[M]inor or inadvertent mistakes made in a sworn certification do not strike
at the heart of Rule 23’s adequacy requirement.” Khunt, 102 F.Supp.3d at 538-39 (quoting
Niederklein v. PCS Edventures!.com, Inc., No. 1:10–cv–00479–EJL–CWD, 2011 WL
759553, at *11 (D. Idaho Feb. 24, 2011)). Moreover, courts are permitted to consider
untimely amended certifications in selecting the lead plaintiff if “the corrections to the
certification do not prejudice any party to th[e] litigation, or any lead plaintiff movant, and
‘[c]ourts routinely reject criticisms based on errors in certifications, particularly where there is
no evidence of bad faith or intent to deceive the court or the parties.’” Silverberg v. DryShips
Case 1:22-cv-03125-LDH-RLM Document 18 Filed 09/19/22 Page 18 of 22 PageID #: 271
Inc., 17-CV-4547 (SJF)(ARL), 2018 WL 10669653, at *3 n.2 (E.D.N.Y. Aug. 21, 2018)
(quoting In re SLM Corp. Sec. Litig., Master File No. 08 Civ. 1029(WHP), 2012 WL
209095, at *8 (S.D.N.Y. Jan. 24, 2012)).
In this Court’s view, Memon’s counsel’s mistakes are relatively minor. Indeed, these
are not the kind of errors that courts in this Circuit typically view as demonstrating a movant’s
inadequacy to serve as lead plaintiff. Cf. Rodriguez v. DraftKings Inc., 21 Civ. 5739 (PAE),
2021 WL 5282006, at *5-6, *9 (S.D.N.Y. Nov. 12, 2021) (finding that the movant’s
“significant” and “numerous and varied errors” and inconsistencies in his lead plaintiff
submissions rose to the level of “slovenliness” and therefore called into doubt his adequacy
where there were myriad inconsistencies between the movant’s PSLRA certification and loss
chart, omissions in the PSLRA certification, and incorrect treatment of sales as losses—all of
which necessitated the submission of a memorandum and an “affidavit from the accountant
who prepared his loss chart, describing what went wrong”); Karp v. Diebold Nixdorf, Inc., 19
Civ. 6180(LAP), 2019 WL 5587148, at *6 (S.D.N.Y. Oct. 30, 2019) (finding that the
movants failed to satisfy adequacy showing where they overcalculated their losses by 34
percent), adhered to on reconsideration, 2019 WL 6619351 (S.D.N.Y. Dec. 5, 2019); In re
NYSE Specialists Sec. Litig., 240 F.R.D. 128, 144-45 (S.D.N.Y. 2007) (movant failed to
ensure that the complaint and lead plaintiff motion were filed by the entity that actually
purchased shares during the class period); see also Savino v. Comput. Credit, Inc., 164 F.3d
81, 87 (2d Cir. 1998) (affirming denial of motion for class certification where movant offered
“differing accounts about the letters that form[ed] the very basis for his lawsuit”).
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Mr. Lieberman’s mistakes do not prejudice any party to this litigation or the sole other
movant—i.e., Saad—who has since withdrawn his opposition to Memon’s appointment as lead
plaintiff. Nor is there any evidence of bad faith or an intent to deceive on the part of
Pomerantz, as Mr. Lieberman readily identified and admitted his mistakes in Memon’s
subsequent submissions when addressing Saad’s unrelated concerns. Accordingly, the Court is
satisfied that, based on the firm’s experience and credentials (as discussed infra), Pomerantz is
experienced and well-qualified to conduct the class action securities litigation at hand.
Moreover, Memon maintains a sufficient financial interest in the outcome of the case with
respect to all claims under the Exchange Act to vigorously advocate on behalf of the class and,
in his papers, he denies the existence of any conflicts of interest with absent class members.
See Memon Mem. at 10, DE #9-2 (“There is no antagonism between the interests of Memon
and those of the Class, and his losses demonstrate that he has a sufficient interest in the
outcome of this litigation.”).
With respect to the second stage of the inquiry, only Saad has opposed Memon’s
motion to be appointed lead plaintiff—an opposition that he later retracted voluntarily. See
generally Saad Opp., DE #12; Saad Non-Opposition, DE #13. In any event, as discussed
above, Saad’s (withdrawn) concerns proved to be unavailing: the Court has satisfied itself that
Memon’s loss is bona fide, and the greatest suffered by any movant. Thus, Saad failed to
provide the “exacting proof needed to rebut the PSLRA’s presumption.” In re Facebook, Inc.,
IPO Sec. & Derivative Litig., 288 F.R.D. 26, 40 (S.D.N.Y. 2012). As such, the PSLRA’s
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statutory presumption stands unrebutted, and the Court therefore finds Memon to be the most
adequate lead plaintiff.
Approval of Lead Counsel
The PSLRA also specifies the procedure to be followed for approving lead counsel in
putative class actions brought pursuant to federal securities laws. Under the PSLRA, “[t]he
most adequate plaintiff shall, subject to the approval of the court, select and retain counsel to
represent the class.” 15 U.S.C. § 78u-4(a)(3)(B)(v). As is evident from the statutory
language, “the lead plaintiff’s right to select and retain counsel is not absolute - the court
retains the power and the duty to supervise counsel selection and counsel retention.” City of
Ann Arbor Emps.’ Ret. Sys. v. Citigroup Mortg. Loan Tr. Inc., CV 08-1418 (LDW) (ETB),
2009 WL 10709107, at *5 (E.D.N.Y. Mar. 9, 2009) (quoting In re Luxottica Grp., S.p.A.
Sec. Litig., No. 01–CV–3285, 2004 WL 2370650, at *3 (E.D.N.Y. Oct. 22, 2004)), adopted,
2009 WL 10750336 (E.D.N.Y. Mar. 16, 2009). Nevertheless, “[t]he Court generally defers
to the plaintiff’s choice of counsel, and will only reject the plaintiff’s choice ... if necessary to
protect the interests of the class.” Rauch v. Vale S.A., 378 F.Supp.3d 198, 211 (E.D.N.Y.
2019) (second alteration in original) (citations omitted); see Brady, 324 F.Supp.3d at 352
(“Courts have correctly found that the PSLRA evidences a strong presumption in favor of
approving a properly-selected lead plaintiff’s decisions as to counsel selection and counsel
retention.” (citation and internal quotations omitted)). The PSLRA thus makes clear that
courts should interfere with the lead plaintiff’s selection and retention of counsel only to
“protect the interests of the class[.]” 15 U.S.C. § 78u-4(a)(3)(B)(iii)(II)(aa); see Darish, 2021
WL 1026567, at *8; Rauch, 378 F.Supp.3d at 211.
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Here, Memon has selected Pomerantz as lead counsel and seeks this Court’s approval
of that selection. In assessing a proposed lead plaintiff’s selection and retention of counsel to
represent a purported class, courts give significant weight to counsel’s experience. See Rauch,
378 F.Supp.3d at 211. Pomerantz has submitted a 57-page resume in support of its candidacy
for lead counsel. See generally Firm Resume (July 25, 2022), DE #9-8. Pomerantz’s resume
sets forth the qualifications and legal experience for more than 40 lawyers employed at the law
firm. See id. at 16-57. In addition, the Pomerantz resume provides a detailed description of
the law firm’s extensive credentials and highlights its successful representation of plaintiffs in
numerous securities class actions in this Circuit and across the country. See id. at 2-7
(describing in detail those securities class actions in which Pomerantz obtained a favorable
settlement as lead counsel). Notably, neither Saad in his retracted opposition, nor any other
“purported class members[,] have offered any reason why Pomerantz LLP would be illequipped to serve as lead counsel in this case.” Darish, 2021 WL 1026567, at *8. Moreover,
numerous other courts in this Circuit have also concluded that, based on Pomerantz’s extensive
experience, the firm is qualified to serve as lead counsel in similar class actions. See, e.g., id.
at *8-9 (collecting cases approving a movant’s selection of Pomerantz as lead counsel). In
sum, the Court agrees with Memon that Pomerantz has “extensive experience in securities
litigation and class actions involving issues similar to those raised in” the instant action, as well
as “the skill and knowledge necessary to enable the effective and expeditious prosecution” of
the instant claims. Memon Mem. at 12, DE #9-2. Thus, despite counsel’s relatively minor
mistakes in preparing Memon’s initial submissions (as addressed supra), Pomerantz is
Case 1:22-cv-03125-LDH-RLM Document 18 Filed 09/19/22 Page 22 of 22 PageID #: 275
nevertheless qualified to serve as lead counsel in this matter and is therefore approved to serve
as lead counsel.
For the foregoing reasons, this Court appoints Memon as lead plaintiff and approves
Pomerantz as lead counsel. Saad’s competing motion is denied as moot.
Brooklyn, New York
September 19, 2022
Roanne L. Mann
ROANNE L. MANN
UNITED STATES MAGISTRATE JUDGE
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