IN THE UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

THOMAS LAURIA, on Behalf of Himself and 

All Others Similarly Situated, 

Plaintiff,

v.

BIOSANTE PHARMACEUTICALS, INC., and 

STEPHEN M. SIMES,

Defendants.

Case No. 1:12-cv-00772

BALA PALANISAMY, Individually and on

Behalf of All Others Similarly Situated,

Plaintiff, 

v.

BIOSANTE PHARMACEUTICALS, INC., and 

STEPHEN M. SIMES,

Defendants.

Case No. 1:12-cv-01215

REPLY BRIEF IN FURTHER SUPPORT OF THE MOTION OF THE 

BIOSANTE INVESTOR GROUP FOR APPOINTMENT AS 

LEAD PLAINTIFF AND APPROVAL OF ITS COUNSEL

Movants Avraham Shaked, Sue Benson and Raymond Skubel (the “BioSante Investor 

Group”) submit this reply brief in further support of its motion for lead plaintiff, filed with the 

Court on April 6, 2012. As the movant with the largest financial interest in the relief sought by 

the class, the BioSante Investor Group should be appointed lead plaintiff in this action.

I. THE BIOSANTE INVESTOR GROUP SHOULD BE APPOINTED LEAD 

PLAINTIFF

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A. The Largest Investor of the BioSante Investor Group Alone Has More Losses 

Than the Other Movants

It is undisputed that the BioSante Investor Group has far and away the largest losses in 

this case and therefore the largest financial interest in the relief sought by the class. As set forth 

in its opposition brief, the BioSante Investor Group’s $1,443,477.24 in losses are $599,634.82

more than the movant group with the second largest amount of losses, Thomas Norgiel and 

Jeffrey Rennell (the “Norgiel-Rennell Group”). In fact, Avraham Shaked, the BioSante Investor 

Group’s largest shareholder, singlehandedly has $1,167,194.63 in losses, which by itself is 

$323,352.21 greater than the Norgiel-Rennell Group’s losses. Despite the competing movants’

attempts to complicate the issue, the inquiry here is quite simple: the Court is required to 

presume that the most adequate plaintiff is the one who has the “largest financial interest in the 

relief sought by the class.” 15 U.S.C. § 78u-4(a)(3)(B)(iii)(I)(bb); Takara Trust v. Molex, Inc., 

229 F.R.D. 577, 580-81 (N.D. Ill. 2005) (appointing unrelated group of investors lead plaintiff). 

Whether the Court chooses to appoint a sole individual or a group as lead plaintiff on behalf of 

the class, the BioSante Investor Group, or alternatively Avraham Shaked, is the presumptive lead 

plaintiff under the plain reading of the statute and case law interpreting it, and the movants have 

done nothing to rebut that presumption. 

B. The BioSante Investor Group Is A Small Cohesive Group Capable of 

Working Together As Lead Plaintiff

The BioSante Investor Group consists of three individual investors. All three intended to 

move for lead plaintiff together as a group, but due to the timing of the lead plaintiff deadline 

(which occurred during Passover), Avraham Shaked was unable to convene on the conference 

call. However, Mr. Shaked was aware at the time and is willing and able to serve in the group. 

Courts in this District routinely appoint small groups of unrelated investors as lead plaintiff in 

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securities class actions. For example, in City of Sterling Heights Gen. Empl’ees. Ret. Sys. v. 

Hospira, Inc., Judge St. Eve in this district less than two weeks ago appointed as lead plaintiff an 

unrelated group with the largest cumulative loss over the protestations of a smaller but related 

investor group, an identical circumstance to the one present here. No. 11 C 8332, 2012 WL 

13396978, at *8 (N.D. Ill. Apr. 18, 2012); see also Bang v. Acura Pharm., Inc., No. 10 C 5757, 

2011 WL 91009, at *2 (N.D. Ill. Jan. 11, 2011) (Kendall, J.); Takara Trust, 229 F.R.D. at 50-81. 

In appointing the group lead plaintiff, the court in Bang, due to the paucity of Seventh Circuit 

law on the issue, adopted the reasoning of the Third Circuit in In re Cendant Corp. Litigation in 

appointing a small group of unrelated individuals, which stated:

[T]he PSLRA ‘contains no requirement mandating that the members of a proper 

group be ‘related’ in some manner’ . . . . Rather, that Circuit held that courts 

should ‘concern’ themselves with whether a movant group will fairly and

adequately protect the interests of the class; as such the extent of the prior 

relationships between members of a movant group may enter ‘into the calculus’ of 

the equation but it is not dispositive. 

Bang, 2011 WL 91009, at *3 (quoting In re Cendant, 264 F.3d 201, 266 (3d Cir. 2001)); accord 

Hospira, 2012 WL 1339697, at *8. This practice is consistent with other districts where “the 

trend in recent years . . . seems to be away from a blanket prohibition against ‘lead plaintiff 

groups’ with no pre-existing relationship . . . .” Sabbagh v. Cell Therapeutics, Inc., 2010 WL 

3064427, at *4 (W.D. Wash Dec. 19, 2011); see also Eichenholtz v. Verifone Holdings, Inc., No. 

C 07-06140 MHP, 2008 WL 3925289, at *5 (N.D. Cal. Aug. 28, 2008) (“[A] pre-existing 

relationship between entities that comprise a group is not required if the resulting group is small 

and cohesive enough such that it can adequately control and oversee the litigation.”). 

This is not a situation where the movant group needs to accumulative its losses to 

overcome a competing movant, since, as stated above, the BioSante Investor Group and its 

largest investor both have hundreds of thousands of dollars of losses more than all other 

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competing movants. Takeda v. Turbodyne Techs., Inc., 67 F. Supp. 2d 1129, 1135-36 (C.D. Cal. 

1999) (appointing group of investors lead plaintiff because it contained investor with single 

largest losses). Rather, joining the investors together will add diversity to the group, as Mr. 

Shaked is an investor from Israel and Ms. Benson and Mr. Skubel are both located in the United 

States. This diversity of opinions will help to adequately monitor counsel and the case on behalf 

of the class. See In re Oxford Health Plans, Inc. Secs. Litig., 182 F.R.D. 42, 49 (S.D.N.Y. 1998).

C. In the Alternative, the Court Should Appoint Shaked As Sole Lead Plaintiff

While courts in this district have appointed small groups of unrelated investors lead 

plaintiff, if the Court determines that the BioSante Investor Group would not adequately 

represent the plaintiff class, the Court should instead appoint Mr. Shaked as sole lead plaintiff. 

Despite the Norgiel-Rennell Group’s averments to the contrary, courts routinely appoint the 

largest individual shareholder if it is unsatisfied with a group’s composition for lead plaintiff in 

securities class actions. See, e.g., In re Bally Total Fitness Sec. Litig, No. 04C3530, 2005 WL 

627960, at *4-6 (N.D. Ill. Mar. 15, 2005); see also In re CMED Secs. Litig., No. 11 Civ. 

9297(KBF), 2012 WL 1118302, at *5 (S.D.N.Y. Apr. 2, 2012) (looking to individual members 

of group compared to competing movants and appointing movant with largest losses); Beckman 

v. Ener1, Inc., No. 11 Civ. 5794(PAC), 2012 WL 512651, at *2-4 (S.D.N.Y. Feb. 15, 2012);

Varghese v. China Shenghou Pharm. Holdings, Inc., 589 F. Supp. 2d 388, 394 (S.D.N.Y. 2008) 

(noting “the Court may consider Maa, the largest shareholder of the Maa Group, individually, as 

if he had moved to be appointed as lead plaintiff alone”); Eichenholtz, 2008 WL 3925289, at *10 

(rejecting proposed group, yet considering individual entity); In re Flight Safety Tech., Inc. Sec. 

Litig., 231 F.R.D. 124, 130 (D. Conn. 2005) (considering proposed members of moving groups 

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on an individual basis); In re Donnykenny Inc. Sec. Litig., 171 F.R.D. 156, 158 (S.D.N.Y. 1997) 

(appointing individual entity as lead plaintiff after denying the motion of its larger group).

The Rennell-Norgiel Group cites four cases for the proposition that the Court cannot 

consider an individual member of a group for the purposed of moving for lead plaintiff. The four 

cases cited by the group, however, directly contradict the practice used by the courts in this 

district and the overwhelming precedent in favor of appointing the largest shareholder in a group 

lead plaintiff. See In re Bally, 2005 WL 627960, at *6 (appointing largest investor from movant 

group to serve as lead plaintiff). Indeed, one of the cases cited, In re Critical Path Securities 

Litigation, explicitly stated that “[i]n certain circumstances, it may serve the interests of the class 

to sever from a group a single plaintiff . . . [that] should be appointed the ‘most adequate 

plaintiff.’” 156 F. Supp. 2d 1102 (N.D. Cal. 2001). Those circumstances are met here. The 

other cases are outliers and otherwise inapposite to the facts and circumstances here.

Furthermore, Shaked stated in his declaration that “I am willing to serve as a 

representative party on behalf of the class[,]” demonstrating that he has contemplated the 

possibility of moving alone, and is fully capable of fairly and adequately protecting the interests 

of the class. Therefore, while we believe that the BioSante Investor Group is cohesive and 

adequate for the purposes of being lead plaintiff, in the event the Court chooses to appoint an 

individual lead plaintiff with the largest losses, Avraham Shaked is capable and willing to serve 

as lead plaintiff.

D. Minor Technical Deficiencies Do Not Rebut the Presumption That the 

BioSante Investor Group is the Most Adequate Plaintiff

The competing movants predictably attempt to snipe away at de minimis issues with the 

BioSante Investor Group’s submissions to attempt to rebut the presumption that it is the most 

adequate plaintiff, despite its overwhelming superiority in the amount of losses suffered. None 

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of the issues raised by the movants, however, is evidence sufficient to rebut the presumption that 

the BioSante Investor Group is the most adequate plaintiff. See, e.g., Constance Sczesny Trust v. 

KPMG LLP, 223 F.R.D. 319, 324-25 (S.D.N.Y. 2004) (conclusory assertions of inadequacy not 

sufficient to rebut presumption of adequacy). Indeed, “since ‘it is unsettled whether a candidate 

for lead plaintiff who has not filed a complaint is even required to submit []a certificate,’ at this 

stage of the litigation, the adequacy of the certificate should not be the determinative factor in 

selecting the lead plaintiff.” Bhojwani v. Pistolis, No. 06 Civ. 13761, 2007 WL 2197836, at *8 

(S.D.N.Y. June 26, 2007) (quoting Pirelli Armstrong Tire Corp. Retiree Med. Benefits Trust v. 

Labranche & Co., Inc., 229 F.R.D. 395, 407 (S.D.N.Y.2004)); accord Aronson v. McKesson 

HBOC, Inc., 79 F. Supp. 2d 1146, 1155 (N.D. Cal. 1999) (concluding that “[i]t seems strained to 

recast the words ‘filed with the complaint’ to mean ‘filed with the complaint or motion.’ . . . the 

legislative history indicates that Congress knew that it was limiting the certification requirement 

to those who file complaints.”)

First, the Norgiel-Rennell Group makes the argument that because Sue Benson of the 

BioSante Investor Group’s signature is e-signed that it is somehow invalid. This argument is 

without merit. Electronic signatures are generally acceptable as genuine and there is no authority 

which states that a PSLRA certification needs to be signed with a written signature. See Magyar 

v. St. Joseph Reg’l Med. Ctr., 544 F.3d 766, 770 (7th Cir. 2008) (electronically signed affidavits 

are sufficient and “regularly honored”); cf. Bhojwani, 2007 WL 2197836, at *8. They cite to a 

decision where the movant filed an amended certification because the initial certification (which 

contained the electronic signature) contained misleading trading data and loss calculations, and 

also mistakenly stated that the movant reviewed a complaint, which it turned out in a deposition 

was false. In re Vonage Init. Pub. Offering (IPO) Secs. Litig., No. 07-177(FLW), 2007 WL , at 

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*8 n.8 (Sept. 7, 2007). Hence, the fact that it was an electronic signature was not the reason the 

court cast doubt upon the movant’s certification.

Second, the Norgiel-Rennell Group also attempts to disqualify Avraham Shaked’s 

certification because it does not list his trades. Just as the with Benson’s certification, a minor 

deficiency with Shaked’s certification is not enough to disqualify him as lead plaintiff. 

Bhojwani, 2007 WL 2197836, at *8. Not surprisingly, their brief lists no authority where the 

court has found a lead plaintiff inadequate because his trades were not listed in his certification. 

Regardless, the detail of Mr. Shaked’s trades were listed in Exhibit B to the Porritt Declaration 

and, therefore, has been submitted in support of the motion to be appointed lead plaintiff and 

demonstrate his position as the movant with the largest individual financial interest in this case, 

mooting any questions regarding the timing of his trades. Therefore, there is nothing to rebut the 

presumption that either he or the BioSante Investor Group is the presumptive lead plaintiff.

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II. CONCLUSION

For the foregoing reasons, the BioSante Investor Group should be appointed lead 

plaintiff. In the alternative, as the shareholder with the largest loss, Avraham Shaked should be 

appointed in the event the Court does not wish to appoint a group as lead plaintiff.

Dated: April 27, 2012 Respectfully submitted,

DITOMMASO ♦ LUBIN, P.C. 

/s/Vincent L. DiTommaso

Vincent L. DiTommaso

Peter Lubin

17 W 220 22nd Street – Suite 410

Oakbrook Terrace, Illinois 60181

Tel: (630) 333-0000

Fax: (630) 333-0333

Email: vdt@ditommasolaw.com

Email: psl@ditommasolaw.com

Nicholas I. Porritt

Thomas M. Gottschlich

LEVI KORSINSKY LLP

1101 30th Street NW

Suite 115

Tel: (202) 425-4291

Fax: (202) 333-2121

Email: nporritt@zlk.com

Email: tgottschlich@zlk.com

Eduard Korsinsky

Eric Andersen

LEVI KORSINSKY LLP

30 Broad Street, 24th Floor

New York, New York 10004

Tel: (212) 363-7500

Fax: (212) 363-7171

Email: ek@zlk.com

Email: eandersen@zlk.com

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CERTIFICATE OF SERVICE

I, Vincent L. DiTommaso, the undersigned attorney, hereby certify that on the 27

th day of 

April, 2012, I caused to be served a copy of the within and foregoing Reply Brief in Further

Support of the Motion of the BioSante Investor Group for Appointment as Lead Plaintiff and

Approval of Its Counsel, via ECF, on all counsel of record.

/s/ Vincent L. DiTommaso

Vincent L. DiTommaso

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