LABELLE v. FUTURE FINTECH GROUP INC.

UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY

CHAMBERS OF Martin Luther King, Jr. Federal Bldg.

JESSICA S. ALLEN & U.S. Courthouse

UNITED STATES MAGISTRATE JUDGE 50 Walnut Street

Newark, New Jersey 07102

(973-645-2580)

LETTER ORDER

September 24, 2024

TO: ALL COUNSEL OF RECORD

Re: Labelle v. Future FinTech Group, Inc., et al.

Civil Action No. 24-247 (JXN) (JSA)_______

Dear Counsel:

This is a putative class action brought pursuant to the Private Securities Litigation Reform

Act (“PSLRA”), 15 U.S.C § 78u-4(a)(3)(B). Before the Court are the following motions:

(1) Gary Pierce’s (“Pierce”) Motion for Appointment as Lead Plaintiff and

Approval of Lead Counsel (ECF Nos. 5, 11; “Pierce’s Motion to Appoint”);

(2) Jeff Dyck’s (“Dyck”) Motion for Appointment as Lead Plaintiff and Approval

of Lead Counsel (ECF No. 6; “Dyck’s Motion to Appoint”);

(3) Scott Present’s (“Present”) Motion for Appointment as Lead Plaintiff and

Approval of Lead Counsel (ECF Nos. 7, 12; “Present’s Motion to Appoint”);

(4) Present’s Motion to Seal his Motion to Seal and to Strike Evidence (ECF Nos.

13, 14, 17; “Present’s First Motion to Seal and to Strike”);

(5) Present’s Motion to Seal (i) Pierce’s Opposition to Present’s Motion to Seal and

(ii) Reply Memorandum of Law in Further Support of Present’s Motion to Seal

to Strike Evidence (ECF Nos. 18, 19, 21; “Present’s Second Motion to Seal”).

Pierce opposes Present’s Motion to Appoint. (ECF No. 9). Present opposes Pierce’s

Motion to Appoint. (ECF No. 10). Present and Pierce both oppose Dyck’s Motion to Appoint.

(ECF Nos. 9, 10). Pierce opposes Present’s First Motion to Seal and to Strike and Present’s Second

Motion to Seal. (ECF Nos. 16, 20). Dyck has not filed any opposition to either of Present’s

Motions to Seal. For the reasons set forth below, and for good cause shown, Pierce’s Motion to

Appoint is DENIED; Dyck’s Motion to Appoint is DENIED; Present’s Motion to Appoint is

GRANTED; Present’s First Motion to Seal and to Strike is DENIED; and Present’s Second

Motion to Seal is DENIED.

I. RELEVANT BACKGROUND

This case is brought on behalf of a putative class of all persons or entities who purchased

or otherwise acquired publicly traded Future FinTech Group, Inc. (“Future FinTech” or “the

Company”) securities from March 10, 2020, through January 11, 2024. (See Compl., ¶ 1; ECF

No. 1). Future FinTech—a Florida corporation with its principal place of business in New York—

trades on the NASDQ under the ticker symbol “FTFT.” (Id., ¶¶ 7-8). The Company’s business

includes supply chain financial services and trading, asset management, cross-border money

transfer services, and cryptocurrency mining and market data and information services. (Id., ¶ 7).

Defendant Shanchun Huang (“Huang”) has been Future FinTech’s CEO since March 4, 2020. (Id.,

¶ 9). Defendant Jing Chen (“Chen”) served as the Company’s Chief Financial Officer (“CFO”)

from 2019 until November 2020, and currently serves on the Board of Directors. (Id., ¶ 10).

Defendant Ming Yi (“Yi”) has served as the Company’s CFO since November 30, 2020. (Id., ¶

11).

On January 11, 2024, after the market closed, the Securities and Exchange Commission

(“SEC”) announced that it had charged Huang with “manipulative trading” and “buying hundreds

of thousands of Future FinTech shares to artificially increase the company’s stock price shortly

before and after he became the CEO.” (Id., ¶¶ 38-39). Attached to the SEC’s announcement was

its civil complaint filed against Huang in the United States District Court for the Southern District

of New York. (Id., ¶ 39). Following this news, on January 12, 2024, Future FinTech’s stock price

fell $0.27, or 20.9%, to close at $1.02 per share. (Id., ¶ 46).

On January 16, 2024, Plaintiff Denise Labelle filed the present Complaint, alleging that:

“(1) Defendant Huang manipulated the price of Future FinTech stock; (2) Defendant Huang and

Future FinTech lied to the Securities and Exchange Commission about the nature of Defendant

Huang’s ownership of Future FinTech stock; (3) Future FinTech understated its legal risk; (4)

Future FinTech did not disclose the unlawful measures Defendant Huang took to prop up the price

of its stock; and (5) as a result, Defendants’ statements about its business, operations, and prospects

were materially false and misleading and/or lacked a reasonable basis at all relevant times.” (Id.,

¶ 37).1

The PSLRA requires that the first plaintiff to file a complaint alleging a securities class

action publish notice of the complaint in a widely circulated business publication within twenty

(20) days of its filing. See 15 U.S.C. § 78u-4(a)(3)(A)(i). The notice is required to inform class

members of their right to move the court, within sixty (60) days, for appointment as lead plaintiff.

See 15 U.S.C. § 78u-4(a)(3)(A)(i)(II); see also Lifestyle Invs., LLC v. Amicus Therapeutics, Inc.,

2016 WL 3032684, at *3 (D.N.J. May 26, 2016).

Counsel for Plaintiff Labelle published notice of her Complaint and the lead plaintiff

deadline via Business Wire on January 16, 2024. (See ECF No. 7-3, Ex. A; see also ECF No. 7-1

at 7). On March 18, 2024, three plaintiffs filed motions to be appointed lead plaintiff and for

approval of lead counsel: Present, Pierce, and Dyck. (See ECF Nos. 5-7).

1 A review of the Court’s official docket confirms that summonses were issued on Plaintiff Labelle’s Complaint. (See

ECF No. 4). However, no executed returns of service have been filed, and Defendants have not yet appeared in the

case.

II. THE MOTIONS TO APPOINT

A. PSLRA Framework

Pursuant to 15 U.S.C. § 78u-4(a)(3)(B)(i), the Court must consider any timely motion to

be appointed lead plaintiff and must appoint the movant that the Court determines to be “most

capable of adequately representing the interests of class members[.]” Id. The PSLRA establishes

a rebuttable presumption that the “most adequate plaintiff” is the person that:

(aa) has either filed the complaint or made a motion in response to a

notice [published by a complainant]; (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)(I); see also In re Cendant Corp. Litig., 264 F.3d 201, 262-63 (3d

Cir. 2001) (describing the PSLRA’s process for determining the “most adequate plaintiff”). The

only Rule 23 considerations that are relevant to the lead plaintiff analysis are the typicality and

adequacy requirements. See id.; see also Fields v. Biomatrix, Inc., 198 F.R.D. 451, 456 (D.N.J.

2000) (the lead plaintiff Rule 23 analysis is focused “only on the typicality . . . and adequacy

requirements.”).

In considering whether a plaintiff has established typicality, “courts should consider

whether the circumstances of the movant with the largest losses ‘are markedly different or the legal

theory upon which the claims [of the movant] are based differ[] from that upon which the claims

of other class members will be based.’” In re Able Labs. Sec. Litig., 425 F. Supp. 2d 562, 567

(D.N.J. 2006) (quoting In re Cendant, 264 F.3d at 264-65). As for the adequacy requirement,

“courts should consider whether the plaintiff has the ability and incentive to represent the claims

of the class vigorously, [whether movant] has obtained adequate counsel, and [whether] there is a

conflict between [the movant’s] claims and those asserted on behalf of the class.” Id. At the

appointment of lead plaintiff stage, the Rule 23 analysis is limited to determining whether the

movant has made a “prima facie showing” of typicality and adequacy, In re Cendant, 264 F.3d at

264-65, and the inquiry “need not be extensive.” Id.

Once the court has determined who is the proper presumptive lead plaintiff, the

presumption can be rebutted only upon proof by a class member that the presumptive lead plaintiff:

“(aa) will not fairly and adequately protect the interests of the class; or (bb) is subject to unique

defenses that render such plaintiff incapable of adequately representing the class.” 15 U.S.C. §

78u-4(a)(3)(B)(iii)(II); see also In re Cendant, 264 F.3d at 222. Once established, the lead plaintiff

is entitled to select and retain lead counsel for the class, subject to the court’s approval. See 15

U.S.C. § 78u-4(a)(3)(B)(v). Ultimately, the selection of a lead plaintiff is committed to the court’s

discretion. See In re Milestone Scientific Securities Litig., 187 F.R.D. 165, 175 (D.N.J. 1999).

B. Presumptive Lead Plaintiff

There are two competing proposed lead plaintiffs—Pierce and Present.2

In his Motion to Appoint, Pierce represents that he suffered financial losses in the amount

of approximately $10,927.70. (See Declaration of Kevin G. Cooper, Esq. (“Cooper Decl.”), Ex.

C; ECF Nos. 5-2, 5-5). Pierce contends that he is a typical and adequate representative for the

class and that he manages his own investments, incentivizing him to aggressively pursue this case.

(ECF No. 5-1 at 6). Finally, Pierce advises that he has retained experienced counsel to efficiently

prosecute the action, selecting Glancy Prongay & Murray LLP as lead counsel and Carella, Byrne,

Cecchi, Brody & Agnello, P.C. as liaison counsel. (Id. at 7).

In his Motion to Appoint, Present claims to have suffered financial losses in the amount of

$42,803.57. (See Declaration of Joseph T. Lukens, Esq. (“Lukens Decl.”), Ex C; ECF Nos. 7-2,

7-5). Present, like Pierce, contends his claims are typical of the class and that he, too, would be

an adequate representative. Present contends that he has previously worked in the banking and

insurance industry, manages his own investments, and has a law degree from Cleveland State

University. (See Declaration of Scott Present, ¶¶ 3-5; ECF No. 7-6). Further, Present contends

that he has hired Faruqi & Farqui, LLP, a firm with experience in securities class action work.

(See ECF No. 7-1 at 11 & Ex. E).

Present and Pierce oppose each other’s respective Motions to Appoint. (See ECF Nos. 9-

12). As detailed in their respective submissions, Pierce and Present agree that Present has the

largest financial interest and that Present’s claims are typical of the class. (See generally ECF Nos.

11, 12).

However, Pierce contends Present has not established he is an adequate representative.

(See ECF No. 9). According to Pierce, based on an internet search, “it appears that Present was

involved in a legal dispute with the Florida Board of Bar Examiners over his admission to practice

law in that State,” (id. at 2), and that “it appears that Present is not admitted to the Florida Bar.”

(Id.; herein, at times, the “Florida Bar proceedings” or “Florida Bar dispute”). Pierce continues

that, if Present was denied admission to the Florida Bar, “the reason for denial may be relevant to

the determination” of whether Present is an adequate representative. (Id.) Pierce further contends

that Present should be required to provide “this information to demonstrate his adequacy” and that

if he declines, “he should be disqualified from consideration for appointment as lead plaintiff,”

(id.), because such conduct could undermine his adequacy and disrupt the case. (Id.; see also ECF

No. 20 at 2). Pierce continues that, if the Court determines that further investigation may yield

disqualifying information,” Piece should be granted the opportunity to conduct discovery into the

Florida Bar dispute. (Id. at 5; see also ECF No. 20). Finally, if Present is disqualified, then Pierce

submits he should be the presumptive lead plaintiff. (Id.)

On reply, Present counters that he is the presumptive lead plaintiff, as he indisputably has

2 Dyck filed a notice of “non-opposition” to Present and Pierce’s respective Motions to Appoint, conceding that he

does not have the largest financial interest, and therefore, is not the presumptive lead plaintiff. (See ECF No. 8).

Accordingly, Dyck’s Motion to Appoint, (ECF No. 6), is denied.

the largest financial stake in the litigation and because he satisfies the adequacy and typicality

prongs of Rule 23. (ECF No. 12 at 1-2). According to Present, he only needs to make a prima

facie showing that he would adequately represent the interests of the class, which he has done by

submitting a declaration attesting to his educational background and investing experience and the

fact that he has hired competent and experienced counsel to prosecute the case. (Id. at 2). As to

Pierce’s reliance on the Florida Bar proceedings as a basis to rebut the presumption, Present

submits that Pierce’s argument fails for two reasons. First, Present’s dispute with the Florida Bar

was more than twelve (12) years ago. (Id. at 5). Second, Pierce’s argument is based on mere

speculation that the twelve year-old confidential bar information is relevant to whether Present is

adequate to be lead plaintiff. (Id. at 5-6). Present further represents that he has “never been

convicted of a crime involving unsavory, unethical, or dishonest conduct,” (id. at 6), and that even

if he had, courts have routinely rejected the notion that such prior conduct would render him an

inadequate representative or warrant his disqualification from serving as the presumptive lead

plaintiff. (Id.) Present continues that adequacy may be questioned only “where issues of

credibility were raised by confirmed examples of past dishonesty such as fraud or a criminal

conviction for an offense that requires proof of dishonesty.” (Id. at 7). Finally, Present contends

that Pierce has not demonstrated a reasonable basis for discovery into the Florida Bar dispute, but

nevertheless, states that he is willing to provide the confidential information concerning the Florida

Bar dispute to the Court for in camera review. (See ECF No. 12 at 7-8 & n.3).

Pierce submits that Present’s failure to disclose the Florida Bar proceedings demonstrates

his lack of adequacy to represent the class. (See ECF No. 9 at 3-4). However, the Court discerns

a distinction between satisfying the initial showing of adequacy and rebutting the presumption

once it has been established. See In re Cendant, 264 F.3d at 264. At the initial stage, the court’s

analysis is performed without consideration of any arguments by other members of the putative

class, such as those raised here by Pierce. See In re Enzymotec Ltd. Sec. Litig., 2015 U.S. Dist.

LEXIS 25720 at *5 (D.N.J. Mar. 3, 2015) (prima facie evaluation is made “without the aid of any

other parties”); Hall v. Medicis Pharm. Corp., 2009 WL 648626, at *3 (D. Az. Mar. 11, 2009)

(same). Allegations from other members of the putative class are “dealt with in terms of assessing

whether the lead plaintiff presumption has been rebutted rather than in terms of deciding whether

it has been triggered.” In re Cendant, 264 F.3d at 264 (emphasis added). For that reason, Pierce’s

arguments about what impact, if any, the Florida Bar proceedings have on Present’s ability to

adequately represent the class is not a proper consideration in determining whether Present is the

presumptive lead plaintiff under the PSLRA. Rather, such information should be considered, if at

all, in connection with determining whether the presumption has been rebutted. Id.3

Considering the foregoing, this Court finds that Present has established a prima facie

showing that he is the presumptive lead plaintiff. First, the parties agree Present has the largest

financial stake and that his claims are typical of the class. Second, he is an adequate representative

because he has the ability and incentive to represent the claims of the class and has retained

qualified counsel. Finally, Pierce raises no arguments suggesting that there would be any conflict

between Present’s claims and the claims of the class. See In re Able Labs., 425 F. Supp. 2d at 567.

3 Pierce’s own case law supports this conclusion. Specifically, Pierce cites Xianglin Shi v. Sina Corp., 2005 WL

1561438, at *4 (S.D.N.Y. July 1, 2005). (See ECF No. 9 at 3). Shi considered adequacy-related arguments from a

competing lead plaintiff in connection with whether the lead plaintiff presumption was rebutted, not as part of the

movant’s prima facie showing. See id. at *4.

C. Rebutting the Presumption

Once a presumptive lead plaintiff has been established, the court next considers whether

the presumption has been rebutted by means of “‘proof by a member of the purported plaintiff

class that the presumptively most adequate plaintiff—(aa) will not fairly and adequately protect

the interests of the class; or (bb) is subject to unique defenses that render such plaintiff incapable

of adequately representing the class.’” In re Cendant, 264 F.3d at 268 (quoting 15 U.S.C. § 78u-

4(a)(3)(B)(iii)(II)). “The Third Circuit has stressed that the PSLRA requires more than mere

assertions to rebut the presumptive lead plaintiffs’ status. Rather, the PSLRA requires ‘actual

proof’ that the presumptive lead plaintiffs are inadequate representatives of the class or subject to

unique defenses.” OFI Risk Arbitrages v. Cooper Tire & Rubber Co., 63 F. Supp. 3d 394, 402 (D.

Del. 2014) (citing In re Cendant, 264 F.3d at 269-70).

Pierce’s attempt to rebut the presumption rests on a series of assumptions. First, Present

was denied admission to the Florida Bar. Second, the reason for the denial could have been the

result of ethical or unsavory misconduct. And finally, the suspected, unknown conduct disqualifies

Present from serving as presumptive lead plaintiff. (See ECF No. 9 at 2). Based on these

assumptions, Pierce contends that the suspected misconduct or prior bad acts could render Present

an inadequate representative. (See id.; see also ECF No. 20). Pierce continues that these alleged

“adequacy issues” are particularly worrisome because Present did not affirmatively disclose them

in his motion papers. (ECF No. 9 at 3-5).

This Court’s review of the judicial landscape reveals that courts around the country have

examined whether the prior conduct, credibility, or integrity of a proposed lead plaintiff is relevant

to the Rule 23 adequacy determination and that these courts have reached different conclusions.

As former Chief Judge Brown astutely noted, the law on this subject is “conclusively

inconclusive.” In re Fleetboston Financial Securities Litig., 253 F.R.D. 315, 331 (D.N.J. 2008).

This Court has attempted to synthesize the various court decisions across the country. To

that end, it appears that the vast majority of courts have considered whether there is proof that the

presumptive lead plaintiff: (1) was the subject of an active criminal investigation, see, e.g., In re

Network Assoc. Inc. Sec. Litig., 76 F. Supp. 2d 1017, 1029 (N.D. Cal. 1999) (lead plaintiff not

adequate due to active criminal investigation of fraud); (2) had been previously convicted of a

crime, and if so, whether the conviction demonstrates dishonesty or was unrelated to the instant

case, see, e.g., Sneed v. Acelrx Pharm., 2021 WL 5964596, at *4 (N.D. Cal. Dec. 16, 2021)

(proposed lead plaintiff deemed inadequate and presumption rebutted when he was indicted and

convicted for embezzling over $900,000 from a former employer); Chupa v. Armstrong Flooring,

Inc., 2020 WL 1032420 (C.D. Cal. Mar. 3, 2020) (armed bank robbery, accompanied by 97 months

in federal prison, insufficient to rebut presumption that lead plaintiff was adequate); Scuderi v.

Mammoth Energy Servs., Inc., 2019 WL 4397340, at *4 (W.D. Ok. Sept. 13, 2019) (felony

conviction for distribution of controlled substance and misdemeanor charge for tampering with

public records insufficient to rebut presumption that lead plaintiff was adequate); Rambarran v.

Dynamic Airways, LLC, 2015 WL 4523222, at *9 (S.D.N.Y. 2015) (proposed lead plaintiff

deemed inadequate when he was former disbarred attorney with felony criminal conviction);

McCall v. Drive Fin. Servs. LP, 236 F.R.D. 246, 251 (E.D. Pa. 2006) (lead plaintiff found to be

adequate despite conviction for armed robbery); Shi, 2005 WL 1561438, at *3 (conviction for

embezzlement found sufficient to rebut lead plaintiff presumption), or (3) had been publicly

sanctioned for violating laws that implicate the individual’s moral character, see, e.g., Newman v.

Eagle Bldg. Techs., 209 F.R.D. 499, 504 (S.D. Fla. 2002) (finding one presumptive lead plaintiff

inadequate because he had been “publicly cited as violating SEC and NASD rules in two

instances.”).

Providing proof of any such conduct is necessary so the court can consider whether the

conduct is sufficient to rebut the presumption. Here, Pierce offers no proof that Present was or is

currently the subject of any active criminal investigation, has any criminal convictions, or has been

publicly sanctioned for violating laws. See In re Able Labs, 425 F. Supp. 2d at 573 (finding no

evidence that presumptive co-lead plaintiff was under investigation or lied to the court but had

there been the court might have reached a difference conclusion); OFI Risk Arbitrages, 63 F. Supp.

3d at 402 (rebutting presumption requires actual proof). Rather, in support of his attempt to rebut

the presumption, Pierce speculates that if Present was denied admission to the bar, the reason may

be relevant to the Court’s determination. This Court disagrees.

Even assuming Present was denied admission to the Florida bar, the reason for the denial

itself is not relevant. Instead, this Court finds relevance is determined by the challenger offering

proof of an ongoing criminal investigation, criminal conviction, or public sanction. Here, Pierce

has not done so. At best, he points to general speculative allegations, which are insufficient to

rebut the presumption. See, e.g., Skeels v. Piedmont Lithium Litig., 2022 U.S. Dist. LEXIS 30705,

at *19 (E.D.N.Y. Feb. 4, 2022) (unsubstantiated allegations of prior improper and/or illegal

conduct insufficient to rebut presumption); Steamfitters Local 449 Pension & Ret. Security Funds

v. Sleep Number Corp., 2022 WL 1607306, at *5 (D. Minn. May 20, 2022) (“The ‘mere risk’ that

issues may arise in litigation is insufficient. The PSLRA requires more than mere assertions in

order to rebut the presumptive lead plaintiffs’ status. [Challenger] must put forward ‘actual proof’

that [presumptive lead plaintiff] is an inadequate representative of the class. [...] [C]hallenger] has

offered speculations and concerns, which does not satisfy [challenger’s] burden to offer proof that

[presumptive lead plaintiff] is an inadequate representative of the class.”) (internal quotes and cites

omitted). In any event, Present has affirmatively represented that he has not been convicted of an

offense alleging unsavory, unethical, or dishonest conduct. (See ECF No. 12 at 7).

Even if Pierce were able to offer proof that Present was denied admission, and the reason

was based on unsavory or unethical conduct, courts have routinely found that a proposed class

representative is not typically rendered inadequate due to allegations of prior “unrelated unsavory,

unethical, or even illegal conduct.” 1 Newberg and Rubenstein on Class Actions § 3.68 (6th ed.)

(collecting cases); see also Susinno v. Work Out World, Inc., 333 F.R.D. 354, 362 (D.N.J. 2019)

(noting that, “attacks on credibility are not often given much weight,” and lead plaintiff found

adequate, despite allegations of involvement in insurance fraud scheme); Fox v. Riverview Realty

Partners, 2014 WL 1613022, at *7-9 (N.D. Ill. Apr. 22, 2014) (finding that lead plaintiff was

adequate, despite allegations of dishonesty); Lapin v. Goldman Sachs & Co., 254 F.R.D. 168, 177-

78 (S.D.N.Y. 2008) (lead plaintiff adequate despite allegations of dishonesty); Weikel v. Tower

Semiconductor, 183 F.R.D. 377, 397 (D.N.J. 1998) (lead plaintiff adequate despite allegations of

dishonesty and general lack of credibility); German v. Federal Home Loan Mortgage Corp., 168

F.R.D. 145, 154 (S.D.N.Y. 1996) (same). As other courts have observed, “few plaintiffs come to

court with halos above their heads; fewer still escape with those halos untarnished.” C.E. Design

Ltd. v. King Architectural Metals, Inc., 637 F.3d 721, 728 (7th Cir. 2011) (internal quotation

omitted). For that reason, “for an assault on [a] class representative’s credibility to succeed, the

party mounting the assault must demonstrate that there exists admissible evidence so severely

undermining plaintiff’s credibility that a fact finder might reasonably focus on plaintiff’s

credibility, to the detriment of the absent class members’ claims.” Id.

Here, whatever conduct may have occurred twelve years ago could not rise to the level of

severely undermining Present’s ability to serve as lead plaintiff, since Pierce does not point to any

criminal investigation, criminal conviction, or public sanction resulting from the Florida Bar

dispute. Further, any such suspected conduct could not have had any bearing on the allegations in

this case or serve as a unique defense to the claims of the class, as the Florida Bar proceedings are

twelve years old, thus having concluded long before the class period in this case. See, e.g., Pagan

v. The New Wilson’s Meats, Inc., 2011 WL 1876027, at *7 (E.D. Pa. May 17, 2011) (proposed

lead plaintiff inadequate when he allegedly stole from the named defendant during course of

employment, providing potentially unique defense).

The cases on which Pierce relies are distinguishable. There, the lead plaintiffs were

rendered inadequate due primarily to criminal convictions. See Sneed, 2021 WL 5964596, at *3

(criminal conviction and lack of candor about conviction); Shi, 2005 WL 1561438, at *3 (criminal

conviction). Again, here, Pierce offers no proof of any such criminal convictions. And this Court

finds that any suspected conduct without more does not demonstrate that Present’s ability to

represent the class as lead plaintiff should be called into question. See, e.g., Skeels, 2022 U.S.

Dist. LEXIS 30705 at *19; OFI Risk Arbitrages, 63 F. Supp. 3d at 402; Steamfitters Local, 2022

WL 1607306, at *5. Considering the foregoing, no in camera review—which Present has

offered—is necessary. Even assuming Present engaged in general conduct that negatively

impacted his admission to the Florida Bar or reflects poorly on his character, this Court has already

determined that any such suspected, unrelated unsavory or unethical conduct is insufficient to rebut

the presumption.

In sum, this Court finds that Pierce has not come forward with any relevant reason for this

Court to question Present’s adequacy to represent the class, let alone sufficient to rebut the

presumption that Present is the presumptive lead plaintiff.4 Accordingly, Present’s Motion to

Appoint is granted, and Pierce’s Motion to Appoint is denied.

D. Lead Counsel

The PSLRA requires that “[t]he most adequate plaintiff shall, subject to the approval of the

court, select and retain counsel to represent the class.” 15 U.S.C. § 78u-4(a)(3)(B)(v). “The Third

4 In the event Present is not disqualified, Pierce requests discovery into Present. (See ECF No. 11 at 1 n.1). However,

discovery of competing movants is only permitted if a movant demonstrates “a reasonable basis” for a finding that the

presumptive lead plaintiff is inadequate. See 15 U.S.C. § 78u-4(a)(3)(B)(iv). Here, the Court declines to order

discovery. To disqualify Present, Pierce would need to provide “admissible evidence so severely undermining

[Present’s] credibility that a fact finder might reasonably focus on plaintiff's credibility, to the detriment of the absent

class members’ claims.” C.E., 637 F.3d at 728. Given the absence of any proof of criminal charges or convictions—

and the fact that Present’s dispute with the Florida Bar twelve years ago could not bear on the allegations in this case—

the Court finds that Pierce has not established a reasonable basis to find inadequacy that would warrant further

discovery.

Circuit has indicated that a court should defer to the lead plaintiff's choice of counsel and intervene

only if it is necessary to protect the interests of the class.” Kabak as Tr. of Stephen Kabak & Joy

Schary Living Tr. v. Becton, Dickinson & Co., 2020 WL 3056281, at *3 (D.N.J. June 9, 2020)

(citing In re Cendant, 264 F.3d at 273-74). As discussed, Present’s chosen counsel, Faruqi &

Farqui, LLP, has experience in litigating complex securities class actions on behalf of plaintiffs,

and has served as lead counsel in several prominent securities class action. (See ECF No. 7-1 at 11

& Ex. E). Therefore, this Court finds no reason to disturb Present’s selection of lead counsel.

III. THE MOTIONS TO STRIKE AND SEAL

A. Parties’ Positions

Present and Pierce’s competing Motions to Appoint were filed in unredacted form on the

public docket without any contemporaneous motion to seal. The supporting briefs discuss the

Florida Bar proceedings. (See ECF Nos. 9, 11, 12). Nevertheless, after briefing on the respective

Motions to Appoint was complete and publicly filed, Present filed a combined motion seeking to

(a) strike references to the Florida Bar proceedings from the record (or in the alternative, that such

information be disregarded), and (b) seal certain portions of (i) the briefing on the Motions to

Appoint, and (ii) the briefing on the Motion to Seal itself. (See Present’s First Motion to Strike

and Seal, ECF No. 14, 14-7). In addition, after Pierce opposed Present’s First Motion to Strike

and Seal, (ECF No. 16), Present filed a Second Motion to Seal, (ECF No. 18), which seeks to seal

portions of Pierce’s opposition brief in response to Present’s First Motion to Strike and Seal, and

his own reply brief in further support of the same motion. (ECF No. 18-3). Pierce opposed the

Second Motion to Seal as well. (ECF No. 20). Taken together, Present’s First Motion to Strike

and Seal and Present’s Second Motion to Seal present the questions of whether the Florida Bar

proceedings should be considered in connection with the Motions to Appoint and whether any

aspect of the record should be sealed.

In his First Motion to Seal and Strike, Present argues that the information regarding the

Florida Bar proceedings is confidential, should not have been made publicly available, and should

be stricken from the record. (See generally ECF No. 14-1 at 1-2). In support of this argument,

Present attaches a certification from the Clerk of the Florida Supreme Court, confirming that

Present’s proceedings with the Florida Bar were intended to be confidential and should not have

been available online. (See ECF No. 14-4). Accordingly, Present argues that any reference to the

Florida Bar proceedings should be stricken from the record and not considered as part of the lead

plaintiff adequacy analysis. (ECF No. 14 at 1-2). Thereafter, Present filed his Second Motion to

Seal, seeking to seal the opposition and reply papers submitted in connection with the First Motion

to Seal and Strike, contending that the confidential nature of the Florida Bar proceedings warrants

sealing.

In opposition, Pierce contends that the Florida Bar proceedings are relevant to the question

of whether Present is an adequate representative. (ECF No. 16 at 9-10). Further, Pierce contends

that Present’s First and Second Motions to Seal must be denied for a panoply of reasons, including

that (1) references to the Florida Bar proceedings remain publicly available on the internet; (2) the

briefing on the Motions to Appoint is unredacted and has been on the public docket for months;

(3) Present has not explained or articulated any harm that would result from public disclosure; and

(4) the Motions to Seal do not comply with Local Civil Rule 5.3. (See ECF Nos. 16 at 3-6; see

also ECF No. 20). As detailed below, this Court agrees.

B. Analysis

As it relates to Present’s First Motion to Strike, this Court has already found that any

suspected conduct related to the Florida Bar proceedings is insufficient to rebut the lead plaintiff

presumption. However, in reaching that conclusion, this Court considered, but rejected, Pierce’s

contention that the suspected conduct rebuts the presumption. As at least one court in this District

has held, allegations challenging the adequacy of a lead plaintiff may be considered even if such

information is inadmissible under the Federal Rules of Evidence. See Rojas v. City of New

Brunswick, 2008 WL 11513208, at *4-6 (D.N.J. Jan. 3, 2008) (denying motion to strike

information challenging lead plaintiff’s adequacy regardless of its admissibility). Further, Present

cites no relevant authority to support his request to strike. For that reason, Present’s request to

strike is denied.

The Court next turns to consider Present’s request to seal. The common law right of

public access to judicial proceedings and records is well-settled. See In re Cendant Corp., 260

F.3d 183, 192 (3d Cir. 2001). With respect to the presumptive right of access to judicial records,

“when a moving party seeks an order sealing court records, it must demonstrate that ‘good cause’

exists to overcome the presumption in favor of public access.” China Falcon Flying Ltd. v.

Dassault Falcon Jet Corp., 2016 U.S. Dist. LEXIS 47798, at *4 (D.N.J. Aug. 29, 2017); see Pansy

v. Borough of Stroudsburg, 23 F.3d 772, 786 (3d Cir. 1994). The “good cause” standard requires

a “particularized showing that disclosure will cause a ‘clearly defined and serious injury to the

party seeking closure.’” City of Sterling Heights Gen. Employees’ Ret. Sys., 2016 U.S. Dist. LEXIS

47798, at *4 (quoting Pansy, 23 F.3d at 786). “This standard was incorporated into this District’s

Local Civil Rule 5.3, which sets forth the requirements for a motion to seal.” Id.

Local Civil Rule 5.3(c) requires the reviewing Court to consider the following factors:

(a) the nature of the materials or proceedings at issue;

(b) the legitimate private or public interest which warrant the relief sought;

(c) the clearly defined and serious injury that would result if the relief sought is not

granted; [and]

(d) why a less restrictive alternative to the relief sought is not available.

L. Civ. R. 5.3(c)(3).

The Court denies Present’s request to seal the briefing on the motions in this case for two

reasons.

First, the Court cannot undo the public disclosure that has already occurred. The Motions

to Appoint, including Present’s own brief, publicly disclose the existence of, and discuss, the

Florida Bar proceedings. (See ECF Nos. 9, 11, 12). It may be true that the Florida Bar proceedings

were intended to be confidential and are only publicly known because of the Florida Supreme

Court’s error. However, regardless of inadvertence or mistake, the fact is once the existence of

the Florida Bar proceedings was made public, it is public, and retroactive sealing is not permitted.

See Pfizer v. Teva, 2010 WL 2710566, at *4 (D.N.J. July 7, 2010). As the Second Circuit Court

of Appeals has explained:

For the same reasons, we think that it was a serious abuse of discretion for

the district court to refer to the magnitude of the settlement amount—

theretofore confidential—in the Unsealing Order. But however confidential

it may have been beforehand, subsequent to publication it was confidential

no longer. . . . [W]e simply do not have the power, even were we of the

mind to use it if we had, to make what has thus become public private again.

Cf. SmithKline Beecham Corp. v. Pentech Pharms., Inc., 261 F.Supp.2d

1002, 1008 (N.D.Ill.2003) (Posner, J., sitting by designation) (deciding that

a motion to seal portions of an agreement containing confidential

information would not be granted as to redacted aspects of the agreement

already disclosed in the court's opinion). The genie is out of the bottle, albeit

because of what we consider to be the district court's error. We have not

the means to put the genie back.

* * *

This is generally so when information that is supposed to be

confidential—whether it be settlement terms of a discrimination lawsuit

or the secret to making the hydrogen bomb, see United States v.

Progressive, Inc., 467 F. Supp. 990, reh'g denied, 486 F.Supp. 5

(W.D.Wis.), appeal dismissed, 610 F.2d 819 (7th Cir.1979)—is publicly

disclosed. Once it is public, it necessarily remains public. . . . []

Once the cat is out of the bag, the ball game is over.

Gambale v. Deutsche Bank AG, 377 F.3d 133, 144 & n.11 (2d Cir. 2004).

In Constand v. Cosby, the Third Circuit embraced the Second Circuit’s analysis in

Gambale. See 833 F.3d 405, 410 (3d Cir. 2016) (“Public disclosure cannot be undone because, as

the Second Circuit has explained in similar circumstances, “[w]e simply do not have the power,

even were we of the mind to use it if we had, to make what has thus become public private again.”

(citing Gambale, 377 F.3d at 144)). Here, the briefs are public, the existence of the Florida Bar

proceedings is “out of the bottle,” and this Court “does not have the means” to put them back in.

See Gambale, 377 F.3d at 144. Further, whether, as Present submits, the Florida Bar of Examiners

acknowledged it mistakenly filed the existence of the Florida Bar proceedings on the internet, it is

undisputed that the information was publicly filed and remained so for years, even after this lawsuit

was filed. (See ECF No. 16 at 3, 5-7; ECF No. 20 at 1).

Second, even if the information sought to be sealed was not already publicly disclosed,

Present has not articulated a clearly defined and serious injury that would result from public

disclosure. To be clear, the underlying details of the Florida Bar proceeding, which occurred

twelve years ago, remain confidential and have not been disclosed. Present does not articulate or

establish, at all, how the public disclosure of the mere existence of the Florida Bar proceeding (or

any aspect of the current briefing) would cause him any harm, let alone a serious injury.5

IV. CONCLUSION

For the reasons set forth above, and for good cause shown, Pierce’s Motion to Appoint is

DENIED; Dyck’s Motion to Appoint is DENIED; Present’s Motion to Appoint is GRANTED;

Present’s First Motion to Seal and to Strike is DENIED; and Present’s Second Motion to Seal is

DENIED. Accordingly, Present is appointed as lead plaintiff, and Faruqi & Farqui, LLP is

appointed as lead counsel.

Pursuant to Local Civil Rule 72.1(c)(1)(C), the Clerk shall not unseal any documents

currently under seal pending further order of the Court.

The Clerk is directed to terminate ECF Nos. 5, 6, 7, 13, and 18.

SO ORDERED.

s/Jessica S. Allen_____________

Hon. Jessica S. Allen

United States Magistrate Judge

cc: Hon. Julien X. Neals, U.S.D.J.

5 In addition, the Court notes that Present’s Motions to Seal do not comply with the Local Civil Rules, as any motion

to seal itself cannot be filed under seal. See L. Civ. R. 5.3(c)(1) (“Any motion and supporting papers to seal or

otherwise restrict public access shall be available for review by the public.”). However, given this Court’s ruling on

the motions to seal on the merits, there is no need to address any apparent procedural defects.