UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF ILLINOIS 

EASTERN DIVISION 

THOMAS LAURIA, Individually, and on Behalf 

of Himself and All Others Similarly Situated, 

Plaintiff, 

v. 

BIOSANTE PHARMACEUTICALS, INC., and 

STEPHEN M. SIMES, 

Defendants. 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

 Civil Action No. 1:12-cv-00772 

 Honorable Joan B. Gottschall

OPPOSITION OF THE BIOSANTE INVESTOR GROUP TO COMPETING MOTIONS 

TO CONSOLIDATE RELATED ACTIONS; APPOINT LEAD PLAINTIFF; AND 

APPROVE CHOICE OF LEAD COUNSEL

Lead Plaintiff movant, the BioSante Investor Group (“BIG” or “Movant”), consisting of 

Michael O. Bopst, Guy L. Jacks, II, Patrick Lavoie, Quynh-Ly Pham, and George Pappaylion, 

respectfully submits this memorandum in further support of BIG’s motion, pursuant to the 

Private Securities Litigation Reform Act of 1995 (“PSLRA”), for appointment of BIG as lead 

plaintiff, and for approval of its selection of Kahn Swick & Foti, LLC (“KSF”) and Brower 

Piven, A Professional Corporation (“Brower Piven”), as co-Lead Counsel, and Susman Heffner 

& Hurst LLP (“SHH”) as Liaison Counsel for the Class, and in opposition to all competing 

motions. 

Four competing lead plaintiff motions were submitted by the following movants: (1) the 

BioSante Investor Group (II) (“BIG II”), consisting of Avraham Shaked, Sue Benson, and 

Raymond Skubel, with claimed losses of $1,443,447.20; (2) Thomas Norgiel and Jeffrey 

Case: 1:12-cv-00772 Document #: 45 Filed: 04/20/12 Page 1 of 12 PageID #:441
2

Rennell (“Norgiel and Rennell”) with claimed losses of $843,842.42; (3) BIG, consisting of 

Michael O. Bopst, Guy L. Jacks, II, Quynh-Ly Pham, Patrick Lavoie, and George Pappaylion 

with claimed losses of $298,386.80; and (4) Mark Dale1 (“Dale”) with claimed losses of 

$73,683.72. 

In making the determination of which investor to appoint as Lead Plaintiff, the PSLRA 

instructs this Court to adopt a presumption that the “most adequate plaintiff” is the person or 

group that “has the largest financial interest in the relief sought by the class,” 15 U.S.C. § 78u4(a)(3)(B)(iii)(I)(bb), and “otherwise satisfies the requirements of Rule 23 of the Federal Rules 

of Civil Procedure.” 15 U.S.C. § 78u-4(a)(3)(B)(iii)(I)(cc). In other words, in order to trigger the 

presumption, both of these statutory requirements must be met. 

A review of the lead plaintiff submissions filed by the two movants with the claimed 

largest losses—BIG II and Norgiel and Rennell—reveals that these competing movants suffer 

from group cohesion problems and erroneous loss calculations that call into question their ability 

to meet both statutory requirements as mandated in order to trigger the lead plaintiff presumption 

in their favor.2

 

By contrast, BIG is a small, cohesive group that has suffered losses of approximately 

$298,386.80 as a result of its members’ investments in BioSante Pharmaceuticals, Inc. 

(“BioSante” or the “Company”) during the Class Period. BIG is a dedicated group of 

 

1

 Movant Dale, with losses of merely $73,683.72, is the movant with the smallest losses and cannot trigger the 

rebuttable presumption in his favor, much less meet the statutory requirements to be appointed lead plaintiff. 

2

 BIG II and Norgiel and Rennell have submitted joint declarations in an attempt to fulfill the requirement to be 

considered a valid group under the PSLRA, but their declarations are defective on their face because they contain 

testimony of each of the members of the groups swearing to information none of the declarants could know from 

personal knowledge. One person is not competent to swear under oath to the intent of another or to what another 

understands, believes or knows. “Under the personal knowledge standard, an affidavit is inadmissible if the witness 

could not have actually perceived or observed that which he testifies to.” Argo v. Blue Cross & Blue Shield of 

Kansas, Inc., 452 F.3d 1193, 1200 (10th Cir. 2006). 

Case: 1:12-cv-00772 Document #: 45 Filed: 04/20/12 Page 2 of 12 PageID #:442
3

experienced investors who have chosen to come together to vigorously represent the Class as 

Lead Plaintiff and has chosen highly capable counsel. BIG’s motion to appoint BIG as lead 

plaintiff and approve its selection of counsel should be granted. 

I. ARGUMENT 

A. BIG II Does Not Trigger Presumptive Lead Plaintiff Status Because of 

Group Cohesion Problems and Improper Certifications 

 While BIG II meets the first statutory requirement to trigger presumptive status (largest 

loss), BIG II does not meet the second requirement to trigger the presumption (Rule 23) because 

of group cohesion problems. 15 U.S.C. § 78u-4(a)(3)(B)(iii)(I)(cc). Courts have consistently 

required cohesion between members, especially when they have no pre-existing relationship. 

Bang v. Acura Pharmaceuticals, Inc., No. C 5757, 2011 WL 91099, at *3 (N.D. Ill. Jan. 11, 

2011) (citing cases acknowledging that “a group of investors should be ‘small and cohesive 

enough such that it can adequately control and oversee the litigation’”) (citations omitted); 

Eichenholtz v. Verifone Holdings, Inc., No. C 07-06140 MHP, 2008 WL 3925289 at *8 (N.D. 

Cal. Aug. 22, 2008); see also Schriver v. IMPAC Mortg. Holdings, Inc., No. SACV 06-31 CJC, 

2006 WL 6886020 at *8 (C.D. Cal. May 2, 2006) (“The Court agrees with Gemstar and other 

cases holding that groups of unrelated investors, while not per se impermissible lead plaintiffs 

under the PSLRA, are not adequate class representatives absent a showing that they are able to 

coordinate their efforts in the litigation”); In re Enron Corp. Sec. Litig., 206 F.R.D. 427, 455-57 

(S.D. Tex. 2002) (reviewing lead plaintiff group applications for those groups which 

affirmatively decided to work together and had agreed upon a decision-making structure). 

Here, one member of BIG II—significantly, the member with the largest loss among all 

group members—was not even a signatory to the joint declaration signed by the other two group 

Case: 1:12-cv-00772 Document #: 45 Filed: 04/20/12 Page 3 of 12 PageID #:443
4

members, wherein Benson and Skubel avowed their dedication and cooperation in litigating the 

matter. See Porritt Decl. at 5. Indeed, the declaration even concedes that Shaked, the missing 

third member of the group, did not attend the conference call with counsel where the respective 

responsibilities of counsel and lead plaintiffs were discussed. Shaked’s absence from the 

conference call renders everything said and agreed-to during the conference meaningless, 

because not all group members were present to discuss the different roles and responsibilities of 

the parties. Moreover, the joint declaration suggests that Shaked does not agree to zealously 

represent the class in this litigation and calls into question whether a group was even formed to 

pursue this action in the first place. Another possible scenario is that Shaked did not want to 

sign the declaration because he wanted to litigate independently of the group, given that his 

losses overshadow those of the other two BIG II members. At minimum, Shaked’s absence from 

the joint declaration indicates that there is no cohesion among the group in that all members have 

not agreed how to manage the litigation and to effectively and efficiently make decisions to 

advance the litigation. 

In addition to cohesion problems, BIG II fails as a lead plaintiff candidate because one of 

its members, Raymond Skubel, did not sign his certification. Skubal’s failure to provide proper 

plaintiff’s certifications is a direct violation of the PSLRA and is fatal to his and his group’s 

ability to represent the Class. 15 U.S.C. § 78u-4(a)(2)(A). “Each plaintiff seeking to serve as a 

representative party on behalf of a class shall provide a sworn certification, which shall be 

personally signed by such plaintiff and filed with the complaint.” 15 U.S.C. § 78u4(a)(2)(A)(emphasis added). The failure to submit valid PSLRA certifications automatically 

disqualifies them as potential lead plaintiffs here. See, e.g., In re Versata, Inc. Sec. Litig., No. C 

01-1439 SI, 2001 WL 34012374, at *2 (N.D. Cal. Aug. 20, 2001) (“[A]ll proposed lead plaintiffs 

Case: 1:12-cv-00772 Document #: 45 Filed: 04/20/12 Page 4 of 12 PageID #:444
5

must have submitted a sworn certification . . .”); Burke v. Ruttenberg, 102 F. Supp. 2d 1280, 

1319 (N.D. Ala. 2000) (“Only those plaintiffs who satisfy the certification requirement of the 

[PSLRA] subsection can serve as lead plaintiff.”). Since the PSLRA certification must be 

“sworn,” 28 U.S.C. § 1746 governs its requirements; it provides that: 

...., such matter may, with like force and effect, be supported, evidenced, 

established, or proved by the unsworn declaration, certificate, verification, or 

statement, in writing of such person which is subscribed by him, as true under 

penalty of perjury, and dated, in substantially the following form: ... “I declare (or 

certify, ... that the foregoing is true and correct. Executed on (date). (Signature)”. 

[Emphasis added]. 

Since the certification must be “personally signed” under the PSLRA, the only permissible way 

for the requirements of both the PSLRA and 28 U.S.C. § 1746 to be satisfied is by the filing of a 

personally signed and dated plaintiff’s certification. Skubal’s certification is not signed, and, 

therefore, he is not eligible to serve as lead plaintiff, and his group is also disqualified. 

Alternatively, if the Court is inclined to find that BIG II is the presumptive lead plaintiff, 

limited discovery into the group’s formation, ability and willingness to join together and manage 

the litigation and counsel is warranted due to this red flag. See In re Cavanaugh, 306 F.3d 726, 

730 (9th Cir. 2002) (“In seeking evidence that could rebut the presumptive lead plaintiff’s 

showing on these points, other plaintiffs may be allowed to conduct discovery if they 

‘demonstrate[ ] a reasonable basis for finding that the presumptively most adequate plaintiff is 

incapable of adequately representing the class.’”) (quoting 15 U.S.C. § 78u-4(a)(3)(B)(iv)). BIG 

respectfully submits that these circumstances raise sufficient questions to warrant limited 

discovery. See 15 U.S.C. 78-u-4(a)(3)(B)(iv) (permitting discovery when movant demonstrates a 

“reasonable basis” for a finding that plaintiff is incapable of adequately representing class). See 

also Brown v. Biogen, No. 05-10801-RCL, 2005 U.S. Dist. LEXIS 19350, at *7-8 (D. Mass. July 

Case: 1:12-cv-00772 Document #: 45 Filed: 04/20/12 Page 5 of 12 PageID #:445
6

26, 2005) (granting discovery of lead plaintiff movant); Sakhrani v. Brightpoint, Inc., 78 F. Supp 

2d 845, 847-48 (S.D. Ind. 1999) (granting limited discovery). 

B. Norgiel and Rennell Do Not Trigger Presumptive Lead Plaintiff Status 

Because Their Loss Calculation Is Erroneous 

In accordance with the statutory requirements, because BIG II has not triggered 

presumptive lead plaintiff status, the Court should next consider the movant with the purported 

second-largest loss, which is the Norgiel and Rennell group. Because the loss calculations in 

Norgiel and Rennell’s motion include multiple errors in the purchase prices of BioSante stock 

during the Class Period, serious questions are raised regarding the accuracy of the Group’s 

certification. Norgiel’s trade data claims that he made purchases of 25,000 shares on November 

17, 2011 at prices from $4.51 to $4.73; however, the highest value of BioSante stock on 

November 17, 2011 was only $2.55, a nearly 100% increase over the true value! Addressing a 

nearly identical purchase inflation, one court found the exaggerated losses raise concerns over 

the movant’s adequacy: 

One of the proposed group, David Renzer, states in his affidavit that on “2/7” he 

purchased 2,500 shares of common stock of Websecure, Inc. at a price of $17.50 

per share. Information supplied by the plaintiffs about the stock’s trading 

indicates, however, that on February 7, 1996, the stock closed, as it had the day 

before, at $9.50 per share. The statement in the Renzer affidavit may thus be 

suspected of being inaccurate. The inaccuracy may be explainable, but it cast 

sufficient doubt on Mr. Renzer’s adequacy as a class representative plaintiff that 

he should be excluded from the group appointed to serve as lead plaintiffs.” 

Nager v. Websecure, Inc., No. CIV.A 97-10662, 1997 WL 773717 at *1 at n. 1 (D. Mass. Nov. 

26, 1997) (internal citations omitted). The demonstrably erroneous trading data for Norgiel 

indicates that the ultimate loss calculation for the group is plainly wrong. Given these clear 

errors, the presumption is not triggered in Norgiel’s and Rennell’s favor. 

Case: 1:12-cv-00772 Document #: 45 Filed: 04/20/12 Page 6 of 12 PageID #:446
7

In the alternative, in the event the Court is inclined to apply presumptive status to Norgiel 

and Rennell, BIG respectfully requests that all competing movants should be allowed limited 

discovery to assess the scope of the inaccuracies in the loss figure and certifications for Norgiel 

and Rennell’s motion. 

Additionally, Norgiel and Rennell calculate their losses on a first-in-first-out (“FIFO”) 

basis, which many courts, including this one, have found to be a less appropriate method of 

calculating losses than the last-in-first-out (“LIFO”) method. See Hill v. The Tribune Co., No. 05 

C 2602, 2005 WL 3299144 at *2 (N.D. Ill. Oct. 13, 2005) (finding that the majority view “is that 

security fraud losses should be calculated using LIFO.”); see also In re Comdisco Sec. Litig., No. 

01 C 2110, 2004 WL 905938 (N.D. Ill. Apr. 26, 2004). Under the LIFO methodology Norgiel 

and Rennell’s losses decrease by over $160,000, not counting the aforementioned inflation due 

to inaccuracies with the purchase values of Norgiel’s stock. 

Thus, the lead plaintiff presumption is not triggered in favor of Norgiel and Rennell. 

C. BIG Meets the Requirements To Trigger the Statutory Presumption and 

Should Be Appointed Lead Plaintiff 

Under the statutory formula, because the presumption is not triggered by BIG II or 

Norgeil and Rennell, the Court should next consider the lead plaintiff movant with the next 

largest claimed loss: BIG. BIG meets the requirements to trigger the presumption because it has 

the next largest financial interest in the outcome of the litigation and “otherwise satisfies the 

requirements of Rule 23 of the Federal Rules of Civil Procedure. 15 U.S.C. § 78u-4(a)(3)(B). 

BIG easily satisfies both the typicality and adequacy requirements of Rule 23. The 

typicality requirement of Rule 23(a)(3) is satisfied when the representative plaintiff’s claims 

arise from the “same event or course of conduct that gives rise to the claims of other class 

members and [its] claims are based on the same legal theory. De La Fuente v. Stokely-Van 

Case: 1:12-cv-00772 Document #: 45 Filed: 04/20/12 Page 7 of 12 PageID #:447
8

Camp, Inc., 713 F.3d 225, 232 (7th Cir. 1983). BIG satisfies the typicality requirement of Rule 

23 because, just like all other class members, its members: (1) purchased BioSante securities 

during the Class Period at artificially inflated prices; and (2) suffered damages thereafter when 

the truth was revealed and the artificial inflation was removed from the price of the stock. Thus, 

BIG’s claims are typical of those of other class members since their claims and the claims of 

other class members arise out of the same course of events. 

Under Rule 23(a)(4), the representative party must also “fairly and adequately protect the 

interests of the class.” The PSLRA directs the Court to limit its inquiry regarding the adequacy 

of the movant to whether the interests of the movant are clearly aligned with the members of the 

putative Class and whether there is evidence of any antagonism between the interests of the 

movant and other members of the Class. See 15 U.S.C. § 78u-4(a)(3)(B). Here, BIG fairly and 

adequately protects the interests of the class. As a preliminary matter, because BIG’s claims are 

identical to the claims of other Class members, there is no evidence of antagonism between its 

interests and those of the proposed Class members. Thus, BIG’s interests are clearly aligned 

with those of the members of the Class. 

Furthermore, in contrast to BIG II’s so-called “joint” declaration signed only by two of 

its three purported members, each member of BIG signed a declaration acknowledging their 

obligations as lead plaintiffs and potential class representatives, and avowing group cooperation 

to actively, diligently, and competently discharge their responsibilities in litigating this matter. 

See Declarations of Michael O. Bopst, Guy L. Jacks, II, Quynh-Ly Pham, Patrick Lavoie, and 

George Pappaylion In Support of the Motion of the BioSante Investor Group to Consolidate 

Related Actions; To Be Appointed Lead Plaintiff; and To Approve Proposed Lead Plaintiff’s 

Choice of Counsel (hereinafter collectively, “Decls.”) at 2. And, BIG has collectively selected as 

Case: 1:12-cv-00772 Document #: 45 Filed: 04/20/12 Page 8 of 12 PageID #:448
9

proposed class counsel attorneys with extensive experience in successfully prosecuting securities 

class actions. 

 As illustrated in the previously-submitted declarations, BIG is a small, cohesive group of 

sophisticated investors who will assertively and collaboratively direct counsel in this litigation. 

Decls. at 1. Moreover, through the professional experiences of its individual members, BIG 

brings a solid understanding of the intricate business and medical issues involved in the 

litigation. 

In addition to their extensive investment experience, BIG’s members bring a professional 

background in business and science. The group includes a nuclear engineer, Mr. Jacks, who 

brings an informed scientific perspective to an action involving misrepresentations regarding 

pharmaceutical products and biotechnology. Jacks Decl. at 1. Mr. Jacks also possesses an 

MBA, which can better help the group understand the business issues arising from the claims. 

Id. Adding to the group’s business experience is Mr. Lavoie, who is an accountant and vice 

president of finance for a manufacturing company. Lavoie Decl. at 1. 

As noted in their declarations, prior to the filing of their motion, the members of BIG 

spoke with each other and their selected counsel by telephone and agreed to move together to be 

appointed lead plaintiff. Decls. at 3. Further, BIG has a plan in place to effectively direct 

counsel, manage the litigation, and actively represent the interests of the Class. Decls. at 2. If 

selected as Lead Plaintiffs, the members of BIG will meet regularly with and/or without counsel 

to discuss the progress of the litigation and to approve the strategies recommended by counsel. 

Decls. at 2-3. Finally, BIG members have a plan to share decision-making responsibilities, and 

in the event that an emergency arises in the course of litigation, the members have selected Mr. 

Bopst to serve as BIG spokesperson and decision-maker. Decls. at 3. Because BIG triggers 

Case: 1:12-cv-00772 Document #: 45 Filed: 04/20/12 Page 9 of 12 PageID #:449
10

presumptive lead plaintiff status, competing movants must rebut this presumption with proof of 

inadequacy and they cannot do so.

For the foregoing reasons, BIG’s motion for appointment as Lead Plaintiff and approval 

of its selection of Lead Counsel KSF and Brower Piven, and Liaison Counsel SHH, should be 

granted and all competing motions should be denied 

DATED: April 20, 2012 Respectfully submitted, 

SUSMAN HEFFNER & HURST LLP 

s/ Matthew T. Heffner 

 Matthew T. Heffner 

30 N. Lasalle, Suite 1210 

Chicago, Illinois 60602 

Telephone: (312) 346-3466 

Facsimile: (312) 346-2829 

Email: mheffner@shhllp.com

Counsel for BioSante Investor Group and Proposed 

Liaison Counsel for the Class 

DAVID A.P. BROWER 

 BROWER PIVEN 

A Professional Corporation 

488 Madison Avenue, 8th Floor 

New York, NY 10004 

Telephone: (212) 501-9000 

KIM E. MILLER 

KAHN SWICK & FOTI, LLC 

500 Fifth Avenue, Ste. 1810 

New York, NY 10110 

Telephone: (212) 696-3730 

Facsimile: (504) 455-1498 

Email: kim.miller@ksfcounsel.com 

and 

LEWIS S. KAHN 

KAHN SWICK & FOTI, LLC 

Case: 1:12-cv-00772 Document #: 45 Filed: 04/20/12 Page 10 of 12 PageID #:450
11

206 Covington Street 

Madisonville, Louisiana 70447 

Telephone: (504) 455-1400 

Facsimile: (504) 455-1498 

Email: lewis.kahn@ksfcounsel.com 

 

Counsel for BioSante Investor Group and Proposed 

Co-Lead Counsel for the Class 

Case: 1:12-cv-00772 Document #: 45 Filed: 04/20/12 Page 11 of 12 PageID #:451
12

CERTIFICATE OF SERVICE 

I hereby certify that on April 20, 2011, I electronically filed the foregoing with the Clerk 

of the Court using the CM/ECF system which will send notification of such filing to the e-mail 

addresses registered, as denoted on the attached Electronic Mail Notice List, and I hereby certify 

that I have mailed the foregoing document or paper via the United States Postal Service to the 

non-CM/ECF participants indicated on the Manual Notice List. 

/s/ Matthew T. Heffner 

MATTHEW T. HEFFNER 

Case: 1:12-cv-00772 Document #: 45 Filed: 04/20/12 Page 12 of 12 PageID #:452