KAHN GAUTHIER SWICK, LLC 

Michael A. Swick (MS-9970) 

Kim E. Miller (KM-6996) 

12 East 41st Street, 12th Floor 

New York, NY 10017 

Telephone: (212) 696-3730 

Fax: (504) 455-1498 

KAHN GAUTHIER SWICK, LLC 

Lewis S. Kahn 

650 Poydras Street, Suite 2150 

New Orleans, LA 70130 

Telephone: (504) 455-1400 

Fax: (504) 455-1498 

Counsel for the Chen Group and 

Proposed Lead Counsel for the Class 

UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF NEW YORK 

BRICKMAN INVESTMENTS, INC., 

Individually And On Behalf of All Others 

Similarly Situated, 

 Plaintiff, 

 vs. 

ALLOT COMMUNICATIONS, LTD., YIGAL 

JACOBY, RAMI HADAR AND ADI SAPIR,

 

 Defendants. 

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DOCKET NUMBER: 07-cv-3455 

HON. RICHARD J. HOLWELL 

(Caption continued on the following page) 

MEMORANDUM IN FURTHER SUPPPORT OF THE MOTION OF THE CHEN 

GROUP TO CONSOLIDATE RELATED ACTIONS; TO BE APPOINTED LEAD 

PLAINTIFF; AND TO APPROVE PROPOSED LEAD PLAINTIFF’S CHOICE OF 

COUNSEL; AND IN OPPOSITION TO ALL OTHER COMPETING MOTIONS 

Case 1:07-cv-03455-RJH Document 18 Filed 07/17/2007 Page 1 of 21
GERALD BILGER, Individually And On Behalf 

of All Others Similarly Situated, 

 

 Plaintiff, 

 vs. 

ALLOT COMMUNICATIONS, LTD., YIGAL 

JACOBY, RAMI HADAR AND ADI SAPIR,

 

 Defendants. 

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DOCKET NUMBER: 07-cv-3815 

HON. RICHARD J. HOLWELL 

ELIYAHU MOKHTAR, Individually And On 

Behalf of All Others Similarly Situated, 

 

 Plaintiff, 

 vs. 

ALLOT COMMUNICATIONS, LTD., YIGAL 

JACOBY, RAMI HADAR AND ADI SAPIR,

 

 Defendants. 

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DOCKET NUMBER: 07-cv-5456 

HON. RICHARD J. HOLWELL 

SHANNON VINSON, Individually And On 

Behalf of All Others Similarly Situated, 

 

 Plaintiff, 

 vs. 

ALLOT COMMUNICATIONS, LTD., YIGAL 

JACOBY, RAMI HADAR AND ADI SAPIR,

 

 Defendants. 

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DOCKET NUMBER: 07-cv-5457 

HON. RICHARD J. HOLWELL 

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Case 1:07-cv-03455-RJH Document 18 Filed 07/17/2007 Page 2 of 21
TABLE OF CONTENTS

TABLE OF AUTHORITIES ...................................................................................................... iv 

INTRODUCTION......................................................................................................................... 1 

ARGUMENT................................................................................................................................. 3 

I) The Court Should Consolidate the Related Actions........................................................... 3 

II) The Chen Group Should Be Appointed Lead Plaintiff..................................................... 4 

A. The Chen Group Meets the Requirements of the PSLRA and Is “The Most Adequate 

Plaintiff” ............................................................................................................................ 4

1. The Chen Group Has the Largest Financial Interest ............................................... 4

2. The Chen Group Satisfies the Requirements of Rule 23 .......................................... 5

3. The Competing Movants Cannot Rebut the Presumption That The Chen Group 

Is the Most Adequate Plaintiff and Their Motions Must Fail................................ 8

B. The Dikla Mondial Mutual Fund Should Not Be Appointed Lead Plaintiff................ 9

1. Dikla Mondial Has Provided No Evidence of Its Authority To Act As Lead 

Plaintiff In This Litigation......................................................................................... 9

2. Dikla’s Failure To Investigate The Troubling Record Of Its Proposed Lead 

Counsel Sabo Renders It Inadequate To Be Appointed Lead Plaintiff .............. 11

C. The Remaining Lead Plaintiff Movant, Brickman Investments Group, Has Losses 

Well Below Those Of The Chen Group........................................................................ 13

III) The Court Should Appoint the Chen Group Lead Plaintiff and Approve the Chen 

Group’s Selection of Counsel ........................................................................................ 13

CONCLUSION ........................................................................................................................... 14 

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Case 1:07-cv-03455-RJH Document 18 Filed 07/17/2007 Page 3 of 21
TABLE OF AUTHORITIES

CASES 

Casden v. HPL Technologies, Inc., 2003 U.S. Dist. LEXIS 19606 at *30 (N.D. Cal. Sept. 29, 

2003) ........................................................................................................................................... 9 

Ezra Charitable Trust v. Rent-Way, Inc., 136 F. Supp. 2d 435, 441 (W.D. Pa. 2001)................... 9 

In re Cavanaugh, 306 F.3d 726, 732 (9th Cir. 2002) ................................................................. 4, 6 

In re Comverse Tech., Inc. Sec. Litig., 2006 U.S. Dist. LEXIS 69900 at *3 (D.N.Y. 2006).......... 4 

In re Crayfish Company Sec. Litig., 2002 U.S. Dist. LEXIS 10134 (S.D.N.Y. 2002)................... 7 

In re Espeed, Inc. Sec. Litig., 232 F.R.D. 95 (S.D.N.Y. 2005)....................................................... 6 

In re MicroStrategy, Inc. Sec. Litig., 110 F. Supp. 2d 427, 431032 (E.D. Va. 2000) .................... 3 

In re Oxford Health Plaints, Inc., 182 F.R.D. 42, 46 (S.D.N.Y. 1998).......................................... 8 

In re Party City, 189 F.R.D. 91, 106 (D. NJ 1999)......................................................................... 5 

In re Peregrine Sys. Sec. Litig., 2002 U.S. Dist. LEXIS 27690 at *58-*59 (S.D. Cal. October 9, 

2002) ......................................................................................................................................... 10 

In re Turkcell Iletisim Hizmetler, A.S. Sec. Litig., 209 F.R.D. 353, 357-58 (S.D.N.Y. 2002)........ 2 

Johnson v. Celotex Corp., 899 F.2d 1281, 1284 (2d Cir. 1990)..................................................... 3 

Kaplan v. Gelfond, 240 F.R.D. 88, 95 (S.D.N.Y. 2007)................................................................. 2 

Olsen v. New York Community Bancorp, Inc., 233 F.R.D. 101, 107 (E.D.N.Y. 2005).................. 9 

Pirelli Armstrong Tire Corp. Retiree Med. Benefits Trust v. LaBranche & Co., Inc., No. 03-cv8264, 2004 U.S. Dist. LEXIS 9571, at *53 (S.D.N.Y. May 27, 2004)....................................... 5 

Smith v. Suprema Specialities, 206 F. Supp. 2d 627, 634-635 (D.N.J. 2002) .............................. 10 

Sofran v. LaBranch & Co., 220 F.R.d. 398, 401 (S.D.N.Y. 2004)................................................. 4 

Weinberg v. Atlas Air Worldwide Holdings, Inc., 216 F.R.D. 248, 252 (S.D.N.Y. 2003) ... 5, 9, 11 

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Case 1:07-cv-03455-RJH Document 18 Filed 07/17/2007 Page 4 of 21
v 

Weltz v. Lee, 199 F.R.D. 129, 132 (S.D.N.Y. 2001)................................................................. 6, 13 

STATUTES 

15 U.S.C. § 77z-1(a) ....................................................................................................................... 1 

15 U.S.C. § 77z-1(a)(3)(B) ............................................................................................................. 5 

15 U.S.C. § 77z-1(a)(3)(B)(iii) ............................................................................................... 3, 4, 6 

15 U.S.C. § 77z-1(a)(3)(B)(iii)(bb)............................................................................................... 13 

15 U.S.C. § 77z-1(a)(3)(B)(iii)(I) ................................................................................................... 6 

15 U.S.C. § 77z-1(a)(3)(B)(iii)(II).................................................................................................. 2 

15 U.S.C. § 77z-1(a)(3)(B)(iii)(II)(aa).......................................................................................... 11 

15 U.S.C. § 77z-1(a)(3)(B)(v)................................................................................................. 11, 13 

RULES 

Fed. R. Civ. P. Rule 23(a)............................................................................................................... 6 

Fed. R. Civ. P. Rule 23(g)............................................................................................................... 6 

Fed. R. Civ. P. Rule 42(a)).............................................................................................................. 3 

Case 1:07-cv-03455-RJH Document 18 Filed 07/17/2007 Page 5 of 21
INTRODUCTION 

On July 2, 2007, the following movants filed motions to be appointed Lead Plaintiff in 

this case: (1) the Chen Group, with losses of $42,789.64; (2) Dikla Mondial Mutual Fund 

(“Dikla”), with purported losses of $40,992.20; and (3) Brickman Investments Group 

(“Brickman”), a two-person group with combined losses of $11,548.00. 

All three movants support consolidation. At this time, the Chen Group hereby opposes 

the other three competing motions for appointment as Lead Plaintiff because the Chen Group is 

the most adequate plaintiff who otherwise satisfies the requirements of Section 27(a) of the 

Securities Act of 1933 (“Securities Act”), 15 U.S.C. § 77z-1(a), as amended by Section 101(a) of 

the Private Securities Litigation Reform Act of 1995 (“PSLRA”). The Chen Group has suffered 

the largest loss among the competing movants, and is a small, cohesive three person group that 

has been working together to prosecute this action for the Class, and who each signed a 

declaration (“Chen Group Decl.”) which evidences their understanding of their responsibilities 

should they be appointed Lead Plaintiff and their willingness to work together and fully 

supervise counsel. See Miller Declaration in support of this motion (“Miller Suppl. Decl.”), 

Exhibit A, Chen Group Decl. ¶8. 

Dikla cannot be appointed Lead Plaintiff because it is a mutual fund comprised of clients 

who own shares of the fund, and has therefore suffered no financial loss itself as the result of any 

purchase of Allot stock. Instead, any loss on the purchase of Allot shares is that of the owners of 

shares of Dikla’s mutual fund. Under a well developed body of PSLRA case law, Dikla is akin to 

an investment advisor who manages the investments of clients. As such, Dikla has failed to 

produce any proof whatsoever evidencing that its hundreds, or possibly thousands, of clients 

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have provided it with the attorney-in-fact authority to bring litigation on their behalf or seek the 

Lead Plaintiff position in this litigation. In re Turkcell Iletisim Hizmetler, A.S. Sec. Litig., 209 

F.R.D. 353, 357-58 (S.D.N.Y. 2002) (court held that investment advisor lacked standing to claim 

the financial interest of its clients); See also Kaplan v. Gelfond, 240 F.R.D. 88, 95 (S.D.N.Y. 

2007) (“Courts have found standing for an investment advisor if it is authorized to act as 

attorney-in-fact with unrestricted decision making authority for the funds at issue.”). 

Further confounding the issue of Dikla’s authority is the unexplained appearance of 

another apparent Israeli entity, Migdal Mutual Funds Management Ltd. (“Migdal”), as signateur 

on Dikla’s sworn Certification filed with its Lead Plaintiff motion, and the scribbling of an 

unrecognizable symbol on the signature line of the Certification, along with the Hebrew 

translation for Migdal stamped under the signature line. Even if Dikla had the legally cognizable 

attorney-in-fact authority from its clients to bring suit and its Lead Plaintiff motion, its omission 

of a clearly identifiable authorized agent on the signature line demonstrates that its lack of 

authority is fatal to its application. 

Next, Dikla’s failure at this early juncture in the litigation to investigate and oversee its 

own chosen Lead Counsel for the Class, the Law Offices of Jacob Sabo (“Sabo”), a firm with its 

offices in Israel, should alone render it inadequate under the Federal Rules of Civil Procedure 

(“FRCP”) Rule 23 to lead this litigation. Dikla has selected Lead Counsel for the Class who has 

misrepresented his credentials in securities class action litigation, as explained herein. Dikla’s 

oversight is indicative that its counsel, and not Dikla, would be in control of this litigation were it 

to be appointed Lead Plaintiff. Consequently, Dikla has proven that it will not fairly and 

adequately protect the interests of the Class through even the most basic of investigations, and 

should not be appointed Lead Plaintiff. 15 U.S.C. § 77z-1(a)(3)(B)(iii)(II). 

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Brickman, the third Lead Plaintiff movant, cannot be appointed because its losses for two 

individual investors, a combined $11,548.00, are dwarfed by those of the Chen Group, and also 

by the Chen Group’s largest investor, Shichao Chen. Accordingly, this Court should appoint the 

Chen Group Lead Plaintiff and appoint its chosen counsel Kahn Gauthier Swick, LLC (“KGS”) 

as Lead Counsel for the Class. 

ARGUMENT 

I) The Court Should Consolidate the Related Actions 

All movants agree that the related actions should be consolidated. The Federal Rules of Civil 

Procedure provide for consolidation of actions pending before a court that assert “common 

questions of law or fact,” Rule 42(a), and the PSLRA provides for consolidation of related 

federal securities actions, before the Court determines the Lead Plaintiff issue. See 15 U.S.C. § 

77z-1(a)(3)(B)(iii). Here, all four of the securities class actions filed involve common—indeed 

virtually identical—questions of law and fact and assert claims on behalf of the aggrieved Allot 

Communications investors during similar. See, e.g., In re MicroStrategy, Inc. Sec. Litig., 110 F. 

Supp. 2d 427, 431032 (E.D. Va. 2000) (actions alleging different class period and naming 

different defendants consolidated pursuant to Fed. R. Civ. P. Rule 42(a)). Furthermore, 

defendants have standing to object to consolidation (as opposed to Lead Plaintiff appointments) 

but have not done so. Therefore, consolidation of these actions is proper and should be granted at 

this time. See, e.g., Johnson v. Celotex Corp., 899 F.2d 1281, 1284 (2d Cir. 1990). 

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Case 1:07-cv-03455-RJH Document 18 Filed 07/17/2007 Page 8 of 21
II) The Chen Group Should Be Appointed Lead Plaintiff 

A. The Chen Group Meets the Requirements of the PSLRA and Is “The Most Adequate 

Plaintiff” 

1. The Chen Group Has the Largest Financial Interest 

Pursuant to 15 U.S.C. § 77z-1(a)(3)(B)(iii), the Court shall appoint as Lead Plaintiff the 

movant or movants who have the largest financial interest in the relief sought by the Action. If 

the plaintiff with the largest losses satisfies the typicality and adequacy requirements of Rule 23, 

he is entitled to Lead Plaintiff status. In re Comverse Tech., Inc. Sec. Litig., 2006 U.S. Dist. 

LEXIS 69900 at *3 (D.N.Y. 2006). Courts have uniformly held that the financial loss prong of 

the statutory test is by far the most important factor in selecting a Lead Plaintiff. See Sofran v. 

LaBranch & Co., 220 F.R.D. 398, 401 (S.D.N.Y. 2004)(“Because the Harper Woods Group has 

lost the most money in connection with the purchase of LaBranche securities...that group is 

deemed the most adequate plaintiff so long as it fulfills the remaining statutory requirements.”); 

In re Cavanaugh, 306 F.3d 726, 732 (9th Cir. 2002)(“the Reform Act provides in categorical 

terms that the only basis on which a court may compare plaintiffs competing to serve as lead is 

the size of their financial stake in the controversy.”) (Emphasis original). 

The Chen Group, with losses of $42,789.64 (see Declaration of Kim E. Miller in Support 

of the Motion of the Chen Group to Consolidate Related Actions; to Be Appointed Lead 

Plaintiff; and to Approve Proposed Lead Plaintiff’s Choice of Counsel, (“Miller Decl.”) Exhibit 

A), clearly has the “largest financial interest in the relief sought by the Class” among those 

seeking appointment as Lead Plaintiff. By contrast, the closest competitor, Dikla—whose Motion 

is defective because Dikla has provided no evidence of its authority to act as Lead Plaintiff in 

this litigation—has purported losses of approximately $40,992.20. The other moving group, 

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Brickman, has losses of approximately $11,548.00. Thus, the Chen Group is the presumptive 

“most adequate plaintiff.” 

2. The Chen Group Satisfies the Requirements of Rule 23 

Pursuant to 15 U.S.C. § 77z-1(a)(3)(B), in addition to possessing the largest financial 

interest in the outcome of the litigation, the Lead Plaintiff must also “otherwise satisfy[y] the 

requirements of Rule 23 of the Federal Rules of Civil Procedure.” The Courts have made it clear 

that the PSLRA’s focus of the inquiry under this provision is on the typicality requirement of 

Rule 23(a)(3) and the adequacy requirement of Rule 23(a)(4). See, e.g., Pirelli Armstrong Tire 

Corp. Retiree Med. Benefits Trust v. LaBranche & Co., Inc., No. 03-cv-8264, 2004 U.S. Dist. 

LEXIS 9571, at *53 (S.D.N.Y. May 27, 2004). Furthermore, the Courts have uniformly held 

that, at the Lead Plaintiff appointment stage, the determination of whether a proposed Lead 

Plaintiff “otherwise satisfies the requirements of Rule 23” is subject only to a preliminary 

analysis. See, e.g., Weinberg v. Atlas Air Worldwide Holdings, Inc., 216 F.R.D. 248, 252 

(S.D.N.Y. 2003), citing In re Party City, 189 F.R.D. 91, 106 (D. NJ 1999) (“In fact, a ‘wide 

ranging analysis under Rule 23 is not appropriate [at this initial stage of the litigation] and should 

be left for consideration of a motion for class certification.”) 

As discussed in the Chen Group’s opening Memorandum, the Chen Group easily satisfies 

both the typicality and adequacy requirements of Rule 23. 

Furthermore, the Chen Group Declaration, submitted herewith, demonstrates that the 

members of the Chen Group understand their obligations as Lead Plaintiffs and will discharge 

those responsibilities actively, diligently, competently, and faithfully. See Chen Group Decl. at 

¶8. Moreover, the large loss of the Chen Group creates a significant incentive to vigorously 

prosecute the claims in this Action. Finally, as demonstrated by the Kahn Gauthier Swick 

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(“KGS”) firm resume submitted at Miller Decl. Ex. C, the Chen Group has selected as proposed 

Lead Counsel highly-skilled attorneys with extensive experience in successfully prosecuting 

securities class actions. See, e.g., In re Cavanaugh, 306 F.3d at 735. (“Lawyers and law firms 

work hard to develop reputations for success, and we in the legal profession widely accept the 

proposition that an aggressive, competent lawyer can make a substantial difference in the 

outcome of the case.”); see also Fed. R. Civ. P. Rule 23(g). Thus, the Chen Group will fairly and 

adequately represent the Class. 

As the Chen Group has sustained the largest losses, and meets the typicality and adequacy 

requirements of Fed. R. Civ. P. Rule 23(a), in accordance with 15 U.S.C. § 77z-1(a)(3)(B)(iii)(I), 

the Chen Group is presumptively the “most adequate plaintiff.” Because that presumption has 

not been and cannot be rebutted by proof by any competing movant group, the Motion of the 

Chen Group should be granted in full. 

The PSLRA expressly refers to the “person or group of persons that...has the largest 

financial interest in the relief sought...” 15 U.S.C. § 77z-1(a)(3)(B)(iii). As a result, courts in this 

District permit plaintiffs to aggregate their losses for the purposes of Lead Plaintiff selection, 

particularly when the lone competing movant who claims to be an institutional investor is 

rendered inadequate under the PSLRA. See In re Espeed, Inc. Sec. Litig., 232 F.R.D. 95 

(S.D.N.Y. 2005) (the “majority view” in the Second Circuit holds that “unrelated investors may 

aggregate;” and the Court concluded that “where aggregation would not displace an institutional 

investor as presumptive Lead Plaintiff based on the amount of losses sustained, a small group of 

unrelated investors may serve as Lead Plaintiff, assuming they meet other necessary 

requirements.”); Weltz v. Lee, 199 F.R.D. 129, 132 (S.D.N.Y. 2001) (permitting aggregation of 

the losses of a “group of seven” unrelated investors); In re Crayfish Company Sec. Litig., 2002 

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U.S. Dist. LEXIS 10134 (S.D.N.Y. 2002) (this Court finds that a group of seven individuals does 

not "present a group so cumbersome as to deliver the control of the litigation into the hands of 

the lawyers.”). 

The Chen Group is comprised of a small, cohesive three-member group of experienced, 

hands-on investors who were damaged by defendants’ wrongdoing as alleged in the Action. 

Aggregation of the losses of the three investors comprising the Chen Group—Shichao Chen, 

Cynthia Hober, and Robert Johnkeer—is appropriate here, and the varied experiences of the 

three members of the group will benefit the Class. 

In addition to the certifications provided by the members of the Chen Group, the group 

has also provided a Joint Declaration providing the backgrounds for each group member, 

evidencing a range of business and professional experience, and enabling the group to bring a 

broad spectrum of knowledge to bear in the decision-making process in this Action, which will 

benefit the Class. The Declaration of the three group-members also demonstrates that the 

members of the Chen Group are fully familiar with their fiduciary obligations as class 

representatives under Rule 23(a)(4), and they have explained, in great detail, how they will 

proactively discharge those obligations. See generally Chen Group Decl. 

All members of the group are cognizant of their responsibilities: to protect the interests of the 

Class; to direct counsel; and to render the ultimate decisions on matters of importance to the 

litigation. They have formed lines of communication, and intend to regularly use those lines of 

communication, with and without counsel present, to discuss the status of the Action and to 

make their joint decisions in the case. They have determined that they can direct this case among 

themselves on a consensus basis; however, they have also put in place a mechanism to deal with 

disagreements. They have also designated one member of their group to act as a point person in 

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the event of a situation where they cannot meet in time to make a decision. Their choice in that 

highly unlikely event is an experienced investor with a degree in business management, Shichao 

Chen. Shichao Chen represents a solid choice of emergency “point” person for the group. See id. 

The Chen Group will thus clearly act independently and evaluate the advice of its counsel rather 

than follow it blindly. They will also act as a “single voice” in directing counsel and will bring 

their broad experiences to the forefront to protect the interests of the Class. See In re Oxford 

Health Plaints, Inc., 182 F.R.D. 42, 46 (S.D.N.Y. 1998) (recognizing the benefit of “pooling” the 

“knowledge and experience” of “multiple Lead Plaintiffs.”). Furthermore, should this court at 

any time during the briefing or hearing see a need to break up or reconfigure the group to select 

one or more members of the group as Lead Plaintiff, each member of the Chen Group has 

expressed their willingness to serve as Lead Plaintiff and their support of reconfiguration in the 

event they are not chosen as Lead Plaintiff. See Chen Group Decl. at ¶13. 

In sum, the Chen Group represents precisely the type of “group of persons” – small, 

cohesive, cognizant, and in control – that Congress envisioned when it enacted the PSLRA. 

3. The Competing Movants Cannot Rebut the Presumption That The Chen Group 

Is the Most Adequate Plaintiff and Their Motions Must Fail 

As discussed above in great detail, the Chen Group has the largest losses—approximately 

$42,789.64, meets the adequacy and typicality requirements of Rule 23, and the presumption that 

it should be appointed Lead Plaintiff cannot be rebutted. The Chen Group suffers from none of 

the serious adequacy and typicality concerns from which Dikla suffers, discussed below, and has 

losses more than 300% the losses of Brickman. 

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B. The Dikla Mondial Mutual Fund Should Not Be Appointed Lead Plaintiff

1. Dikla Mondial Has Provided No Evidence of Its Authority To Act As Lead 

Plaintiff In This Litigation 

Dikla, a mutual fund - and its purported designee Migdal - suffers from serious questions 

regarding its standing to bring this action. Dikla has submitted no evidence that it acts as 

attorney-in-fact for its clients and is authorized to bring suit to recover for investment losses. 

Weinberg, 216 F.R.D. 248 (investment advisor must be attorney-in-fact for clients and have 

unrestricted decision making authority to be “purchaser” under the securities laws). Nor has 

Dikla demonstrated that it functions as a single investor. 

Courts have held that an investment advisor is only a proper Lead Plaintiff where it 

operates as a “single investor” and functions as the attorney-in-fact for its clients. See, e.g., In re 

Espeed, 2005 U.S. Dist. LEXIS 14104 at *5-6 (“In order for an investment advisor to attain 

standing on behalf of investors, the transactions in question must have been executed as if by a 

single person. Moreover, the advisor must be the attorney in fact for his clients...”); See also

Weinberg, 216 F.R.D. 248, 255 (“when the investment advisor is also the attorney-in-fact for its 

clients with unrestricted decision making authority, the investment advisor is considered the 

‘purchaser’ under the federal securities laws with standing to sue in its own name.”); Ezra 

Charitable Trust v. Rent-Way, Inc., 136 F. Supp. 2d 435, 441 (W.D. Pa. 2001). Further, “[w]hen 

the investment advisor is also the attorney-in-fact for its clients with unrestricted decision 

making authority, the investment advisor is considered the ‘purchaser’ under the federal 

securities laws with standing to sue in its own name.” Olsen v. New York Community Bancorp, 

Inc., 233 F.R.D. 101, 107 (E.D.N.Y. 2005); See also Casden v. HPL Technologies, Inc., 2003 

U.S. Dist. LEXIS 19606 at *30 (N.D. Cal. Sept. 29, 2003) (“Investment advisors who make the 

decisions to purchase the securities qualify as purchasers...”). Therefore, as purchasers of the 

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securities with the proper authority, investment advisors have a financial interest in the relief 

sought by the Class. 

Dikla has presented no such evidence that its clients have anointed it as attorney-in-fact 

to bring litigation on their behalf. Dikla has presented no evidence concerning its relationship 

with Migdal and how Migdal would have attorney-in-fact authority for its clients. Dikla is, 

therefore, not considered the purchaser of Allot stock under the federal securities laws, has no 

financial interest in this case, and its loss on purchases of Allot stock is zero. Had Dikla wished 

to be appointed Lead Plaintiff based upon the losses of its clients, it could have timely presented 

the Court with evidence of its authority. 

In In re Peregrine Sys. Sec. Litig., 2002 U.S. Dist. LEXIS 27690 at *58-*59 (S.D. Cal. 

October 9, 2002), the court was presented with a similar motion to be appointed Lead Plaintiff by 

the Needham Growth Fund, a mutual fund like Dikla. The court analyzed the fund’s standing to 

be appointed Lead Plaintiff, determining that “the court is unable to discern any reason why the 

Needham Growth Fund is able to function as "a person" under the PSLRA and finds that it is not 

an appropriate Lead Plaintiff...” See also Smith v. Suprema Specialities, 206 F. Supp. 2d 627, 

634-635 (D.N.J. 2002) (denying Lead Plaintiff appointment to an asset manager who failed to 

show it had the authority to bring action on behalf of its clients). Without the proper attorney-infact authority from its clients proving that they intended for Dikla to take legal action on their 

behalf, Dikla’s Lead Plaintiff motion must be denied. 

Dikla’s Lead Plaintiff motion must also be denied because it is unclear who, as agent for 

Dikla, had the authority to sign its sworn Certification. The only evidence of any purported agent 

whatsoever is an unremarkable scribbling of an unknown symbol on the signature line of the 

Certification, with no elaboration. 

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Simply, it is obvious that Dikla has done little to provide this Court and the competing 

movants with any information to establish its standing to be a Lead Plaintiff in this litigation.1

On this record, the Court must conclude that Dikla does not have the authority to act and 

therefore does not have standing to seek the position of Lead Plaintiff herein. 

2. Dikla’s Failure To Investigate The Troubling Record Of Its Proposed Lead 

Counsel Sabo Renders It Inadequate To Be Appointed Lead Plaintiff

Dikla has shown this Court that it will not fairly and adequately protect the interests of 

the Class through even the most basic of investigations, and should not be appointed Lead 

Plaintiff. 15 U.S.C. § 77z-1(a)(B)(iii)(II). While the PSLRA vests authority in the Lead Plaintiff 

to select and retain counsel to represent the Class, subject to the Court’s approval (15 U.S.C. § 

77z-1(a)(3)(B)(v)), this Court has both the discretion to undo that choice if necessary to “protect 

the interests of the class,” 15 U.S.C. § 77z-1(a)(3)(B)(iii)(II)(aa), or to render Dikla inadequate to 

represent the Class. See Weinberg, 216 F.R.D. 248, 253. The Chen Group submits that Dikla’s 

cavalier attitude towards this litigation and the Class members’ rights mandates that this Court 

eliminate Dikla from consideration as Lead Plaintiff. 

Dikla failed to investigate and identify several significant misrepresentations set forth by 

its chosen counsel Sabo in Sabo’s Firm Resume, attached as Exhibit E to the MacDiarmid 

Declaration submitted to the Court with Dikla’s Motion for Lead Plaintiff. Sabo lists three cases 

in which he purports to serve in a leadership position in federal securities class action litigations, 

as follows: 

 

1

 Counsel for the Chen Group had numerous telephonic conversations with counsel for 

Dikla where information was requested to determine Dikla’s authority to bring this action, and to 

determine who its agent was who signed its sworn Certification. No information was provided in 

response to these requests. 

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Case 1:07-cv-03455-RJH Document 18 Filed 07/17/2007 Page 16 of 21
Jacob Sabo currently serves as Co-Lead Counsel or supporting Lead or co-Lead counsels 

in numerous securities fraud actions throughout the United States, including, among 

others: 

 In re Gilat Satellite Networks, Ltd. Sec. Litig., 

 USDC Eastern New York, Case. No. 02-1510 CPS 

 In re Lumenis, Ltd. Sec. Litig., 

 USDC Southern New York, Case. No.02-CV-1989 DAB 

 In re Amdocs Ltd. Sec. Litig., 

 USDC Eastern Missouri, Case No. 02CV950 HEA 

(Emphasis added.) 

Law Offices of Jacob Sabo Firm Resume p1, Miller Suppl. Decl. Exhibit B. 

Contrary to Sabo’s representations, a cursory search evidences that in fact Sabo currently 

serves in no federally-court appointed leadership positions whatsoever. See attachments to Miller 

Suppl. Decl.: Exhibit C (In re Amdocs Ltd Sec. Litig., Order Approving Stipulation and 

Appointing Lead Plaintiff and Co-Lead and Liaison Counsel); Exhibit D (In re Gilat Satellite 

Networks Sec. Litig., Order); Exhibit E (In re Lumiens, Ltd. Sec. Litig., 2003 U.S. Dist. LEXIS 

10348). Consequently, Sabo’s representation that he currently serves as Co-Lead, among other 

positions, in securities class action litigations in Federal Court is not true. Had Dikla taken the 

time to interview and investigate its counsel’s representations, or its submissions to this Court, it 

would have recognized that Sabo held no federally court-appointed leadership positions in 

securities class actions. In fact, while Sabo was appointed as one of three co-Lead Counsel in In 

re Gilat Satellite Networks, Ltd. Sec. Litig. by virtue of an unopposed Lead Plaintiff motion, his 

co-Lead Counsel in that case, including Glancy Binkow Goldberg (“Glancy”), proposed co-Lead 

Counsel for Dikla in this case, substituted Bernstein Liebhard & Lifshitz, LLP in Sabo’s place on 

January 29, 2003, only fifteen days after Sabo was first chosen as co-Lead Counsel. Miller 

Suppl. Decl. Ex. D. 

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Case 1:07-cv-03455-RJH Document 18 Filed 07/17/2007 Page 17 of 21
 Dikla should have known about Sabo’s misrepresentations in his firm resume. Sabo’s 

proposed co-Lead Counsel for Dikla, Glancy, clearly should have known about Sabo’s 

misrepresentations, having prepared the Order in In re Gilat Satellite Networks, Ltd. Sec. Litig. 

that terminated Sabo’s co-lead appointment, nearly four and a half years ago. The only 

conclusion this Court can make is that Dikla has not diligently managed its chosen counsel, who 

have exhibited self-interested machinations that epitomize “lawyer-driven” litigation, evidencing 

that its appointment as Lead Plaintiff would unfairly prejudice the Class. The PSLRA was 

enacted to expressly prohibit “lawyer-driven litigation”. Weltz, 199 F.R.D. at 131. Consequently, 

Dikla cannot be appointed Lead Plaintiff. 

C. The Remaining Lead Plaintiff Movant, Brickman Investments Group, Has Losses 

Well Below Those Of The Chen Group 

Brickman, represented by proposed co-Lead Counsel Lerach Coughlin Stoia Geller Rudman 

& Robbins LLP and Schiffrin Barroway Topaz & Kessler LLP, is comprised of two 

shareholders, Brickman Investments, Inc., with a loss of $4,408.00, and John Spitz, with a loss of 

$7,140.00. The Chen Group’s losses are 300% greater than Brickman’s. Accordingly, Brickman 

cannot be appointed Lead Plaintiff as it is not the presumptive lead plaintiff, not having the 

largest financial losses in the action. 

III) The Court Should Appoint the Chen Group Lead Plaintiff and Approve the Chen 

Group’s Selection of Counsel 

The Chen Group suffers none of the defects that render other Movants’ Motions 

unwinnable. The Chen Group, which suffered losses of approximately $42,789.64, has “the 

largest financial interest in the relief sought by the class” among class members seeking to be 

appointed Lead Plaintiff. See 15 U.S.C. § 77z-1(a)(3)(B)(iii)(bb) and meets the requirements of 

Rule 23. The Chen Group is therefore the presumptive Lead Plaintiff in this action, which 

13 

Case 1:07-cv-03455-RJH Document 18 Filed 07/17/2007 Page 18 of 21
presumption cannot be rebutted, and the court should approve the Chen Group’s Motion for 

appointment as Lead Plaintiff. 

Further, the PSLRA vests authority in the Lead Plaintiff to select and retain counsel to 

represent the Class, subject to the Court’s approval. See 15 U.S.C. § 77z-1(a)(3)(B)(v). The Chen 

Group has selected Kahn Gauthier Swick, LLC, (“KGS”) to serve as Lead Counsel for the Class. 

KGS is highly experienced in leading the successful prosecution of class action securities cases 

and currently serves as Lead Counsel in several securities litigations. See, e.g., Miller Decl. at C. 

This Court may be assured that in the event this Motion is granted, the members of the Class will 

receive the highest caliber of legal representation. 

CONCLUSION 

For all the foregoing reasons, the Chen Group respectfully requests that this Court: (1) 

consolidate all related actions; (2) appoint the Chen Group as Lead Plaintiffs in the Action; (3) 

approve the Chen Group’s selection of Lead Counsel for the Class; and (4) grant such other and 

further relief as the Court may deem just and proper. 

Dated: July 17, 2007 Respectfully submitted, 

 

KAHN GAUTHIER SWICK, LLC 

/s/ Kim E. Miller________

Kim E. Miller (KM-6996) 

Michael A. Swick (MS-9970) 

12 E. 41st Street, 12th Floor 

New York, NY 10017 

Telephone: (212) 696-3730 

Facsimile: (504) 455-1498 

14 

Case 1:07-cv-03455-RJH Document 18 Filed 07/17/2007 Page 19 of 21
KAHN GAUTHIER SWICK, LLC 

Lewis S. Kahn 

650 Poydras St., Suite 2150 

New Orleans, Louisiana 70130 

Telephone: (504) 455-1400 

Facsimile: (504) 455-1498 

Counsel for the Chen Group and 

Proposed Lead Counsel for the 

Class 

15 

Case 1:07-cv-03455-RJH Document 18 Filed 07/17/2007 Page 20 of 21
16 

CERTIFICATE OF SERVICE

I hereby certify that this Memorandum was filed through the ECF system and will be sent 

electronically to the registered participants as identified on the Notice of Electronic Filing (NEF), 

and paper copies will be sent to those indicated as non-registered participants on March 2, 2007. 

/s/ Kim E. Miller_____

Case 1:07-cv-03455-RJH Document 18 Filed 07/17/2007 Page 21 of 21