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Law360 (August 13, 2020, 5:10 PM EDT ) Sorrento Therapeutics Inc. investors represented by Pomerantz, Kirby McInerney and Robbins Geller continue to fight for appointment as lead plaintiff in a proposed securities class action accusing the company of misleading the public after its CEO characterized some of its COVID-19 research as a "cure."
Lead plaintiff motions in the action were due July 27, and court records show that seven separate parties put in lead plaintiff bids. Of those seven proposed lead plaintiffs, three still contend they should be appointed to lead the suit in briefs filed Tuesday in California federal court.
Jing Li, who is represented by Pomerantz LLP, claims she lost $454,341 in connection with the alleged securities fraud. Even though her alleged losses appear to be higher than losses suffered by other lead plaintiffs, Li's motion still faces opposition from two other would-be lead plaintiffs.
"Li clearly has the greatest financial interest within the meaning of the [Private Securities Litigation Reform Act] of any putative class member seeking appointment as lead plaintiff," she said, noting that her alleged losses were about $70,000 greater than those of the proposed lead plaintiffs with the next-highest alleged losses.
That runner-up coalition comprises four individual Sorrento investors calling themselves the SRNE Investor Group, who claim they lost a combined $380,908.82 in connection with the company's alleged securities fraud. The SRNE Investor Group is represented by Kirby McInerney LLP, the counsel team that filed the original lawsuit in May, though in the original suit, investor Wasa Medical Holdings was the plaintiff.
In its opposition motion, the Investor Group called Li's lead plaintiff bid "deeply flawed" because her motion assumed she sold all of her Sorrento shares right after the class period ended, though she didn't say anything about selling all her shares in her certification. The group also claimed that in Li's loss calculation chart, the listed sale price "exceeds the highest price at which Sorrento shares traded on the alleged sale date."
"The unreliability of Li's submissions cast doubt upon her adequacy as a lead plaintiff," the investor group claimed.
The third remaining contender is Andrew R. Zenoff, who is represented by Robbins Geller Rudman & Dowd LLP and alleges he lost $195,500, arguing that Li hasn't shown she satisfies lead plaintiff requirements of the Private Securities Litigation Reform Act.
"Ms. Li fails to set forth any meaningful qualifications or attributes she possesses that can be deemed as 'prox[ies] for [her] financial and legal sophistication,'" Zenoff said in his opposition bid.
Zenoff also characterized the SRNE Investor Group as an "amalgamation of disparate class members who lack any pre-existing relationship to one another and who each claim financial interests smaller than that of Mr. Zenoff."
Court records show that three parties filed notices of non-opposition, conceding that they didn't appear to have the largest financial interest in the matter, after all the lead plaintiff bids were filed. Mike Nguyen reportedly lost $107,019.74 in connection with the alleged misdeeds and is represented by Faruqi & Faruqi LLP; Dean Roller, who allegedly lost $78,003, is represented by Wolf Haldenstein Adler Freeman & Herz LLP; and Thomas Hammond, who claimed he lost $195,343.18, is represented by Bragar Eagel & Squire PC.
Guiyun Qin, who claimed she lost $170,195.88 and is represented by Levi & Korsinsky LLP, withdrew her lead plaintiff bid, according to court records.
The case is assigned to U.S. District Judge Anthony J. Battaglia and U.S. Magistrate Judge Daniel E. Butcher.
On Monday, attorneys for the remaining proposed lead plaintiffs and representatives for Sorrento did not immediately respond to requests for comment.
Li is represented by Jennifer Pafiti, Jeremy A. Lieberman and J. Alexander Hood II of Pomerantz LLP.
The SRNE Investor Group is represented by Robert J. Gralewski Jr. and Ira Press of Kirby McInerney LLP.
Zenoff is represented by Danielle Myers and Michael Albert of Robbins Geller Rudman & Dowd LLP.
Counsel information for Sorrento was not immediately available Thursday.
The case is Wasa Medical Holdings v. Sorrento Therapeutics Inc. et al., case number 3:20-cv-00966, in the U.S. District Court for the Southern District of California.
--Additional reporting by Dean Seal. Editing by Haylee Pearl.
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