UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

BRICKMAN INVESTMENTS INC., on

behalf of itself and all others similarly

situated,

Plaintiff,

v.

ALLOT COMMUNICATIONS LTD.,

YIGAL JACOBY, RAMI HADAR and ADI

SAPIR,

Defendants.

No. 1:07-cv-03455-RJH

REPLY MEMORANDUM OF LAW IN

SUPPORT OF MOTION OF DIKLA

MONDIAL MUTUAL FUND FOR

CONSOLIDATION OF CASES,

APPOINTMENT AS LEAD PLAINTIFF,

AND FOR APPROVAL OF LEAD

COUNSEL

GERALD BILGER individually and on

behalf of all others similarly situated,

Plaintiff,

v.

ALLOT COMMUNICATIONS LTD.,

YIGAL JACOBY, RAMI HADAR and ADI

SAPIR,

Defendants.

No. 1:07-cv-03815-RJH

ELIYAHU MOKHTAR, individually and on

behalf of all others similarly situated,

Plaintiff,

v.

ALLOT COMMUNICATIONS LTD.,

YIGAL JACOBY, RAMI HADAR and ADI

SAPIR,

Defendants.

No. 1:07-cv-05456-RJH

[Captions Continue on Following Page]

Case 1:07-cv-03455-RJH Document 21 Filed 07/24/2007 Page 1 of 13
SHANNON VINSON, individually and on

behalf of all others similarly situated,

Plaintiff,

v.

ALLOT COMMUNICATIONS LTD.,

YIGAL JACOBY, RAMI HADAR and ADI

SAPIR,

Defendants.

No. 1:07-cv-05457-RJH

Case 1:07-cv-03455-RJH Document 21 Filed 07/24/2007 Page 2 of 13
1

In response to the opposition filed by the Chen Group,1 Movant Dikla Mondial Mutual

Fund (hereinafter, “Dikla Mondial”) respectfully submits this reply memorandum of law in

further support of its motion for appointment as Lead Plaintiff and for approval of its selection of

Co-Lead Counsel, Glancy Binkow & Goldberg LLP and The Law Office of Jacob Sabo.

2

INTRODUCTION

Dikla Mondial has the largest individual financial interest in this litigation. As it has

demonstrated both its adequacy to serve as Lead Plaintiff and that its claims are typical of those

of the class, pursuant to the Private Securities Litigation Reform Act of 1995 (“PSLRA”), Dikla

Mondial is the presumed most adequate plaintiff. The Chen Group provides no evidence to rebut

this presumption – just rank speculation that Dikla Mondial, a mutual fund, is somehow an

“investment advisor” lacking standing to sue, and false accusations that proposed Co-Lead

Counsel has misrepresented his credentials to the Court. Both attacks are meritless. Dikla

Mondial is a sophisticated institutional investor which owns its Allot shares.3 Proposed CoCounsel Jacob Sabo ably serves as Co-Lead Counsel or as Israeli counsel in support of Co-Lead

counsel in other complex securities class actions; his appointment as Co-Lead counsel will

enhance the prosecution of this action against an Israel-based company. Dikla Mondial

respectfully requests the Court grant its motion.

1 The Brickman Group filed no opposition to the appointment of Dikla Mondial as Lead

Plaintiff. With losses totaling only $11,548.00, the group has apparently decided not to pursue

its application to be appointed Lead Plaintiff.

2 As both Dikla Mondial and the Chen Group agree that the pending cases should be

consolidated pursuant to Fed.R.Civ.P. 42(a) and 15 U.S.C. §77-1(a)(3)(B)(ii), no argument will

be presented on this aspect of Dikla Mondial’s motion.

3 See Declaration of Asa Sasson in Further Support of Motion of Dikla Mondial Mutual

Fund for Appointment as Lead Plaintiff and for Approval of Lead Counsel, submitted herewith

(“Sasson Decl.”), at ¶3; Declaration of Jacob Sabo in Further Support of Motion of Dikla

Case 1:07-cv-03455-RJH Document 21 Filed 07/24/2007 Page 3 of 13
2

ARGUMENT

I. DIKLA MONDIAL IS THE PRESUMED MOST ADEQUATE PLAINTIFF

Under the PSLRA, there is a rebuttable presumption that the “most adequate plaintiff” is

the person or group of persons 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

Procedure.

15 U.S.C. § 78u-4(a)(3)(B)(iii). As set forth in its moving papers, Dikla Mondial satisfies all of

the elements of this inquiry; it is the presumed most adequate plaintiff.4 The Chen Group’s

arguments in opposition do not defeat this presumption.

A. Dikla Mondial Has The Largest Financial Interest In This Litigation

Recently, another Court in this District was faced with a nearly identical situation to that

posed in the instant action. In Goldberger v. PXRE Group, Ltd., No. 06-CV-3410(KMK), 2007

WL 980417 (S.D.N.Y. March 30, 2007), the individual with the largest financial interest in the

litigation was opposed in its application to be appointed Lead Plaintiff by a group whose

aggregate losses were larger than the individual’s losses. Id. at *3. Rather than accept the

group’s assertion that it had the largest financial interest, the Court explained that the initial

Mondial Mutual Fund for Appointment as Lead Plaintiff and for Approval of Lead Counsel,

submitted herewith (“Sabo Decl.”), filed herewith at ¶3.

4 The Chen Group does not challenge the timeliness of Dikla Mondial’s motion or that its

claims are typical of the class’s claims. Dikla Mondial will not repeat its arguments on these

prongs of the “most adequate plaintiff” inquiry.

Case 1:07-cv-03455-RJH Document 21 Filed 07/24/2007 Page 4 of 13
3

inquiry under 15 U.S.C. § 78u-4(a)(3)(B)(iii)(bb) is to determine whether the group is

sufficiently cohesive that its constituent members’ losses can be aggregated for the purpose of

evaluating the movants’ financial stake in the litigation. Id. at *3. In Goldberger, because Judge

Karas determined that the only common interest shared by the group members was the lawsuit

itself, id. at *5, the Court discarded the group designation and found the individual with the

largest financial loss to be the presumed most adequate plaintiff. Id.

Here, there is no dispute that Dikla Mondial’s loss, $40,992 -- a mere $1,800 less than

those of the three Chen Group members combined -- represents the largest single financial

interest in this litigation.5 As explained in greater detail in Dikla Mondial’s opposition to the

Chen Group’s moving papers,6if the members of the Chen Group have no prior relationship and

their ad hoc management structure was artificially created by counsel, their losses cannot be

aggregated for the purpose of determining the “person or group of persons” with the largest

financial stake in the action.7

The Chen Group’s papers in opposition to Dikla Mondial’s motion fail to evidence any

prior relationship among group members or any common interest (other than this litigation). See

5 The losses of the three Chen Group members are $23,072, $11,387, and $8,329. See

Motion of Chen Group, filed July 2, 2007, at Miller Decl., at ¶4 and Ex. A.

6

See Dikla Mondial’s Memo. of Law in Opposition, filed July 17, 2007, at 3-10.

7 See also In re Razorfish, Inc. Sec. Litig., 143 F. Supp. 2d 304, 308-09 (S.D.N.Y. 2001)

(citing both the PSLRA’s legislative history and cases, court concluded that the purpose of the

PSLRA, to wrest control of securities cases from lawyers, would be defeated by appointment of

a group if it “has no independent existence and its composite members have no prior

relationship”). Although the Chen Group tries to exhibit cohesiveness, e.g., describing a plan to

monitor the litigation and appointing Mr. Chen as its spokesperson (see Chen Group Opp. at 6-8

and Joint Declaration, at ¶¶9-12, both filed July 17, 2007), these measures are insufficient.

Miller v. Ventro Corp., No. 01-Civ-1287, 2001 WL 34497752, at *8-9, 15 (N.D. Cal. Nov. 28,

2001) (appointing shareholder and bondholder with largest individual losses co-lead plaintiffs,

court rejected a group that presented a purported management structure, because it was created

by the very counsel the group must exercise control over).

Case 1:07-cv-03455-RJH Document 21 Filed 07/24/2007 Page 5 of 13
4

Chen Group Joint Declaration, filed July 17, 2007. Indeed, the declaration itself belies the Chen

Group’s existence as a cohesive, democratic group: Because his is the largest loss of the three,

Mr. Chen will speak for the group where there is a lack of unanimity, even if the other two

members disagree with him. Id. at ¶10. This deference to Mr. Chen (a) mirrors the PSLRA’s

preference for control residing with the movant with the largest losses and (b) requires that the

Chen Group’s artifice be discarded and its members considered individually. Among the four

movants still seeking to be appointed Lead Plaintiff, Dikla Mondial is the person with the largest

financial interest in the relief sought by the class.

B. Dikla Mondial Has Standing to Bring Suit

Sophisticated institutional investors are preferred Lead Plaintiffs under the PSLRA.8 As

this Court is well aware, large institutional investors are often pension plans, mutual funds, and

other pooled investment vehicles.9 Dikla Mondial is such a plaintiff. See, e.g., In re Bally Total

Fitness Sec. Litig., No. 04C3530, 2005 WL 627960, at *2 (N.D. Ill. March 15, 2005) (providing

as an example of a cohesive lead plaintiff group one whose members are mutual funds under

common management). As set forth in the accompanying declarations of Asa Sasson and Jacob

Sabo, Dikla Mondial is a mutual fund which owns the shares of Allot allegedly damaged herein;

8

See, e.g., Sofran v. LaBranche & Co., Inc., 220 F.R.D. 398, 403 (S.D.N.Y. 2004) (citing

legislative history); see also Strougo v. Brantly Capital Corp., No. 06-Civ.-13315 (SCR), 2007

WL 1683348, at *3 (S.D.N.Y. June 3, 2007) (institutional investors who already have fiduciary

responsibilities are “particularly well suited” to representing interests of investors); Vanamringe

v. Royal Group Techs. Ltd., 237 F.R.D. 55, 57 (S.D.N.Y. 2006). For this reason, even when an

individual investor has sustained the largest loss, an institutional investor is sometimes appointed

as co-lead plaintiff. See, e.g., Malasky v. IAC/InterActive Corp., No. 04-Civ-7447 (RJH), 2004

WL 2980085, at *4 (S.D.N.Y. December 21, 2004).

9 See, e.g., Weiss v. Friedman, Billings, Ramsey Group, Inc., No. 05-CV-04617 (RJH),

2007 WL 197036, at *1 nn. 1, 2, 4, and 7 (S.D.N.Y. Jan. 25, 2006); Barnet v. Elan Corp., 236

F.R.D. 158, 161 (S.D.N.Y. 2005); Malasky v. IAC/InterActive Corp., No. 04-Civ-7447 (RJH),

2005 WL 549548, at *2 (S.D.N.Y. March 2, 2005).

Case 1:07-cv-03455-RJH Document 21 Filed 07/24/2007 Page 6 of 13
5

individual investors in the fund do not own the shares. See Sasson Decl. at ¶¶2-3; Sabo Decl. at

¶3. Dikla Mondial, not its underlying individual investors, has the right to bring suit to protect

its rights as a shareholder of Allot. Sasson Decl. at ¶4; Sabo Decl. at ¶3. The Chen Group’s

opposition to Dikla Mondial is unfounded.

The Chen Group concedes that an entity which operates as a “single investor” can serve

as Lead Plaintiff. Chen Group Opp. at 9. However, the Chen Group then jumps to the incorrect

conclusion that all such entities are “investment advisors” who require attorney-in-fact authority

to sue on behalf of the legal owners of the shares. Id. Not so. Dikla Mondial is a single investor

which invests in securities; it is not an investment advisor. Sasson Decl. at ¶3. Grasping at

straws, the Chen Group next complains about the fact that Migdal Mutual Funds Management

Ltd. (“Migdal”) executed a certification on behalf of Dikla Mondial. However, this fact presents

neither smoke nor fire. As Dikla Mondial has no employees of its own, Migdal, its paid fund

manager, is its authorized agent to purchase and sell securities and to enforce rights flowing from

such stock ownership. Sasson Decl. at ¶4.10

The critical test is “whether plaintiff has ‘such right as to afford defendant the protection

ofres judicata when the suit is terminated.’” Montoya v. Herley Industries, Inc., Civ. A. No. 06-

2596, 2006 WL 3337485, at *2 (E.D. Pa. Nov. 14, 2006) (quoting Ezra Charitable Trust v. Rent10 As the CEO of Migdal, Mr. Sasson is competent to describe the relationship between

Dikla Mondial and Migdal and to assure the Court that Dikla Mondial -- which has no employees

it can speak through --seeks to pursue this action on its own account. Cf. Montoya v. Herley

Industries, Inc., Civ. A. No. 06-2596, 2006 WL 3337485, at *2 (E.D. Pa. Nov. 14, 2006); In re

Molson Coors Brewing Co. Sec. Litig., 233 F.R.D. 147, 152 (D. Del. 2005) (affidavit evidence

sufficient to establish authority to sue). In fact, had fund manager Migdal sued in its name, Mr.

Sasson’s declaration would establish attorney-in-fact authority to bring suit to enforce Dikla

Mondial’s rights.

Case 1:07-cv-03455-RJH Document 21 Filed 07/24/2007 Page 7 of 13
6

Way, Inc., 136 F. Supp. 2d 435, 443 (W.D. Pa. 2001)). Whereas Dikla Mondial owns the Allot

shares at issue, this test is satisfied.

C. Rather Than Rendering Dikla Mondial an Inadequate Plaintiff, the Presence

of Proposed Co-Counsel Sabo Will Enhance the Prosecution of the Action

The Chen Group claims that Dikla Mondial fails to meet Rule 23’s adequacy requirement

because one of its proposed co-lead counsel, Jacob Sabo, overstated his credentials in his firm

resume. Chen Group Opp. at 11. In particular, the Chen Group claims that “Sabo’s

representation that he currently serves as Co-Lead, among other positions, in securities class

action litigations in Federal Court, is not true.” Id. at 12 (emphasis provided).

11 It is the Chen

Group’s statement which is untrue.

Jacob Sabo is currently serving as Co-Lead counsel in a federal securities class action

pending in the United States District Court for the District of New Jersey, In re Team Telecom

Int’l. Ltd., No. 2:04-cv-04305-PGS. See Sabo Decl. at ¶5 and Ex. A. He also serves an

important role as Lead Plaintiffs’ Israeli counsel in In re Gilat Satellite Networks, Ltd., No. CV02-1510 (CPS), 2007 WL 1191048, at *11 (E.D.N.Y. April 19, 2007) (preliminary approval of

$20 million settlement required, inter alia, that “the Tel-Aviv based law office of Jacob Sabo,

Lead Plaintiff's counsel, will maintain a phone number for inquiries and will be prepared to mail

or otherwise provide Amended Notice and Proof of Claim forms on an as-requested basis to

Israeli Class Members”).12

In fact, it is beneficial to the class in a case alleging claims against an Israeli defendant

11 By referencing only court orders appointing Lead Counsel, the Chen Group does not

take into account Mr. Sabo’s actual statement that he alternatively served in the capacity of

“supporting Lead or co-Lead counsels” in the cited cases. Sabo Decl. at ¶5; Chen Group Opp. at

Miller Supp. Decl., Ex. B.

12 See also Sabo Decl. at Ex. B, ¶9 (class notice complying with Court’s order).

Case 1:07-cv-03455-RJH Document 21 Filed 07/24/2007 Page 8 of 13
7

that Co-Lead counsel include an Israeli attorney who is both fluent in Hebrew and the manner in

which business is conducted in Israel, and is also a member of the bar in this country as well.

Sabo Decl. at ¶6. Proposed Co-Lead Counsel Sabo’s services will be particularly useful

conducting oral and documentary discovery and, as in Gilat, acting as a liaison with Israeli class

members should the action settle. See In re Commtouch Software Ltd. Sec. Litig., No. C-01-

00719 (WHA), 2001 WL 34131835, at *1 & n.1 (N.D. Cal. June 27, 2001)(appointing Israeli

Lead Plaintiff, the Court reasoned: “Since Commtouch is an Israeli company, the class will be

benefitted by having a representative in Israel, fluent in Hebrew ...”).

To the contrary, it is the Chen Group whose adequacy is in question. In In re Cendant

Corp. Litig., 264 F.3d 201, 266-67 (3d Cir. 2001), the Third Circuit explained that a group of

unrelated persons that was put together by counsel to serve as Lead Plaintiff might not be able to

adequately represent the interests of the class because they “could not be counted on to monitor

counsel in a sufficient manner.” See also Razorfish, supra, 143 F. Supp. 2d at 309 (“Given,

moreover, that the Azimut Group has no independent existence and its composite members have

no prior relationship, there is nothing to suggest that they will collectively ride herd on counsel

anywhere as well as could a single sophisticated entity.”).13

13 Proposed Lead Counsel for the Chen Group has been rejected as Lead Counsel before

on the ground that it had created a proposed Lead Plaintiff group of unrelated persons. In In re

XM Satellite Radio Holdings Sec. Litig., 237 F.R.D. 13 (D.D.C. 2006), several unrelated parties

who had initially sought Lead Plaintiff status on their own belatedly joined forces to establish a

group with the largest financial loss. Id. at 16. The court found their alleged concerns about the

apparent inadequacy of the movant with the largest financial loss, to “ring hollow” – as “[t]heir

‘concerns’ are ... voiced in language that closely tracks that used in In re Able Laboratories Sec.

Litig., 425 F. Supp. 2d 562 (D.N.J. 2006),” where two institutional investors successfully moved

together after the 60-day deadline. 237 F.R.D. at 19. Rejecting Kahn Gauthier Swick, LLC and

its clients, the court stated: “Although the XM Shareholder Group may now present the greatest

financial interest, the inescapable conclusion is that this group was formed to secure lead

plaintiff status for the group and its multiple law firms.” 237 F.R.D. at 20.

Case 1:07-cv-03455-RJH Document 21 Filed 07/24/2007 Page 9 of 13
8

II. THE CHEN GROUP HAS NOT PROVIDED EVIDENCE TO REBUT THE

PRESUMPTION IN FAVOR OF DIKLA MONDIAL

Once the Court finds Dikla Mondial to be the presumed most adequate plaintiff, the

presumption that it should be appointed Lead Plaintiff can only be rebutted by actual “proof” that

it will not fairly and adequately represent the interests of the class. Cendant, supra, 264 F.3d at

268; Montoya, supra, 2006 WL 3337485, at *2 (“’Speculative assertions . . . are therefore

insufficient to rebut the lead plaintiff presumption in this case.’”) (citing cases). Here, no proof

has been presented that Dikla Mondial is an investment advisor without standing to sue; nor is

there proof that Jacob Sabo has misrepresented his role in other securities class actions. The

presumption in Dikla Mondial’s favor has not been rebutted.

CONCLUSION

For all the foregoing reasons, Dikla Mondial requests that the Court (i) consolidate the

pending related cases; (ii) appoint it as lead plaintiff; (iii) approve its selection Glancy Binkow &

Goldberg LLP and Law Office of Jacob Sabo as co-lead counsel; and (iv) grant such other relief

as the Court may deem just and proper.

Respectfully submitted,

DATED: July 24, 2007 MURRAY, FRANK & SAILER LLP

By__________/s/______________________

Brian P. Murray (BM 9954)

Gregory B. Linkh (GL 0477)

275 Madison Avenue, Suite 801

New York, New York 10016

Telephone: (212) 682-1818

Facsimile: (212) 682-1892

Proposed Liaison Counsel

Case 1:07-cv-03455-RJH Document 21 Filed 07/24/2007 Page 10 of 13
9

GLANCY BINKOW & GOLDBERG LLP

Lionel Z. Glancy

1801 Avenue of the Stars, Suite 311

Los Angeles, California 90067

Telephone: (310) 201-9150

Facsimile: (310) 201-9160

and

Robin Bronzaft Howald

1501 Broadway, Suite 1900

New York, New York 10036

Telephone: (917) 510-0009

Facsimile: (646) 366-0895

THE LAW OFFICE OF JACOB SABO

Jacob Sabo

The Tower No.3 Daniel Frisch St.

15th Floor

Tel Aviv, Israel 64731

Telephone: 011 972 3 607 88 88

Facsimile: 011 972 3 607 88 89

Proposed Co-Lead Counsel

Case 1:07-cv-03455-RJH Document 21 Filed 07/24/2007 Page 11 of 13
DECLARATION OF SERVICE

I am an attorney admitted to practice in this district. I hereby certify, under

penalty of perjury, that on this 24th day of July, 2007, I caused a true and correct copy of

the foregoing REPLY MEMORANDUM OF LAW IN SUPPORT OF MOTION OF DIKLA MONDIAL

MUTUAL FUND FOR CONSOLIDATION OF CASES, APPOINTMENT AS LEAD PLAINTIFF, AND

FOR APPROVAL OF LEAD COUNSEL; to be served on the persons listed below, 1) through

this court’s ECF system, and 2) by causing a true copy thereof to be delivered by regular

United States mail, postage prepaid:

For Plaintiffs:

David Avi Rosenfeld

Samuel Howard Rudman

Lerach, Coughlin, Stoia,

Geller, Rudman & Robbins, LLP

58 South Service Road, Suite 200

Melville, NY 11747

Jack Gerald Fruchter

Abraham Fruchter & Twersky LLP

One Penn Plaza, Suite 1910

New York, NY 10119

D. Seamus Kaskela

Richard A. Maniskas

Schiffrin Barroway Topaz & Kessler, LLP

280 King of Prussia Rd.

Radnor, PA 19087

Evan J Smith

Brodsky & Smith, L.L.C.

240 Mineola Blvd.

Mineola, NY 11501

Corey D. Holzer

Michael I. Fistel, Jr.

Holzer Holzer & Cannon LLC

1117 Perimeter Center West, E-107

Atlanta, GA 30338

Case 1:07-cv-03455-RJH Document 21 Filed 07/24/2007 Page 12 of 13
Nadeem Faruqi

Shane Thomas Rowley

Antonio Vozzolo

Faruqi & Faruqi, LLP

369 Lexington Avenue, 10th Floor

New York, NY 10017

Michael Swick

Kahn Gauthier Swick, LLC

12 East 41st st, 12th floor

New York, NY 10017

For Defendants:

General Counsel

Allot Communications Ltd.

c/o Allot Communications, Inc.

7664 Golden Triangle Drive

Eden Prairie, MN 55344

Telephone: 877-255-6826

Facsimile: 952-944-9555

Yigal Jacoby

c/o Allot Communications, Inc.

7664 Golden Triangle Drive

Eden Prairie, MN 55344

Telephone: 877-255-6826

Facsimile: 952-944-9555

Rami Hadar

c/o Allot Communications, Inc.

7664 Golden Triangle Drive

Eden Prairie, MN 55344

Telephone: 877-255-6826

Facsimile: 952-944-9555

Adi Sapir

c/o Allot Communications, Inc.

7664 Golden Triangle Drive

Eden Prairie, MN 55344

Telephone: 877-255-6826

Facsimile: 952-944-9555

______/s/Gregory B. Linkh___________

Gregory B. Linkh (GL-0477)

Case 1:07-cv-03455-RJH Document 21 Filed 07/24/2007 Page 13 of 13