Response in Support of Lead Plaintiff Motion — Wax v. Cross River Bank (D.N.J.)

Record facts

U.S. District Court for the District of New Jersey · No. 2:24-cv-09510-ES-JRA · Doc. 14 · 2024-12-23 · Docket on CourtListener

Full text

UNITED STATES DISTRICT COURT 
DISTRICT OF NEW JERSEY 
 
MITCHELL WAX, Individually and on 
behalf of All Others Similarly Situated, 
 
Plaintiff, 
 
v. 
 
CROSS RIVER BANK, 
 
Defendant 
 
Case No. 2:24-cv-09510-BRM-JRA 
 
 
MITCHELL WAX’S RESPONSE IN 
FURTHER SUPPORT OF MOTION FOR 
APPOINTMENT AS LEAD PLAINTIFF 
AND APPROVAL OF SELECTION OF 
LEAD COUNSEL  
 
Motion Date: January 6, 2025 
 
 
 
Lead Plaintiff Movant Mitchell Wax (“Movant”) hereby submits this Response in Further 
Support of his Motion for Appointment as Lead Plaintiff and Approval of Selection of Lead 
Counsel, and states as follows: 
I. 
INTRODUCTION 
On December 2, 2024, Movant timely filed his Motion for Appointment as Lead Plaintiff 
and Approval of Selection of Lead Counsel (the “Motion”) (ECF No. 9), pursuant to Section 
21D(a)(3)(B) of the Securities Exchange Act of 1934, 15 U.S.C. § 78u-4(a)(3)(B), as amended by 
the Private Securities Litigation Reform Act of 1995 (“PSLRA”), seeking appointment as Lead 
Plaintiff and approval of his selection of Rosca Scarlato LLC and Berger Montague PC as Lead 
Counsel on behalf of a class consisting of all persons and entities that purchased or otherwise 
acquired the securities of Sunlight Financial Holdings, Inc. f/k/a Spartan Acquisition Corp. II 
(collectively, “Sunlight” or the “Company”) between January 25, 2021 and October 31, 2023, 
inclusive (the “Class Period”). See ECF No. 9-1 at 1.  
Case 2:24-cv-09510-ES-JRA     Document 14     Filed 12/23/24     Page 1 of 8 PageID: 227

 
2 
 
No other putative Class member filed a lead plaintiff motion in this Action, timely or 
otherwise. Accordingly, because Movant satisfies the requirements of the PSLRA, the Motion 
should be granted. 
First, the PSLRA states that the movant with the “largest financial interest” that is 
otherwise adequate and typical shall be appointed as lead plaintiff. 15 U.S.C. §78u–
4(a)(3)(B)(iii)(I). As the only Sunlight investor seeking to be appointed Lead Plaintiff, Movant 
Wax has the largest financial interest in this Action. To be sure, as Movant has incurred a sizable 
loss of $606,375.51 on a LIFO basis on his Class Period transactions in Sunlight securities, Movant 
has a substantial interest in the outcome of this litigation and is more than sufficiently motivated 
to obtain the best possible result for the Class. 
Second, in addition to having the “largest financial interest” in the litigation, Movant 
satisfies the typicality and adequacy requirements under Federal Rule of Civil Procedure 23(a). 
Movant is typical of the other Class members insofar as he purchased Sunlight securities during 
the Class Period and was damaged in the same manner as all other Class members, and he does 
not have any interests adverse to the Class. Likewise, Movant is an adequate representative of the 
interests of the proposed Class, as he is an experienced and sophisticated investor committed to 
obtaining the best possible outcome for the Class. His 35 years of investment experience, as well 
as his retention of highly qualified counsel, render him well-qualified to serve as Lead Plaintiff on 
behalf of the proposed Class. ECF No. 9-1 at 8-9. 
With the largest financial interest in the outcome of the action and having made the 
preliminary showing of typicality and adequacy, Movant Wax is entitled to the presumption of 
being the “most adequate plaintiff.” 15 U.S.C. §78u-4(a)(3)(B)(iii). This presumption may be 
rebutted only by “proof” that the presumptively most adequate plaintiff “will not fairly and 
Case 2:24-cv-09510-ES-JRA     Document 14     Filed 12/23/24     Page 2 of 8 PageID: 228

 
3 
 
adequately protect the interests of the class” or “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 Montesano v. Eros Int’l PLC, No. 19-CV-14125 (JMV) (JAD), 2020 WL 1873015, at *10 
(D.N.J. Apr. 14, 2020). As there are no other competing movants that can rebut this presumption 
with proof that Movant is somehow atypical or inadequate – which he is not – Movant is entitled 
to be appointed as the lead plaintiff. 15 U.S.C. §78u-4(a)(3)(B)(iii)(II).  
Accordingly, for these reasons Movant respectfully requests that the Court grant its motion 
in its entirety.    
II. 
ARGUMENT 
A. 
The Lead Plaintiff Procedure Under the PSLRA 
The PSLRA sets forth the procedure for the selection of a lead plaintiff in “each private 
action arising under [the Exchange Act] that is brought as a plaintiff class action pursuant to the 
Federal Rules of Civil Procedure.” 15 U.S.C. §78u-4(a)(1). Following the required notice 
announcing the class action, class members interested in serving as lead plaintiff are required to 
file a motion seeking appointment within 60 days thereafter. 15 U.S.C. §78u-4(a)(3)(A)(i)(II) and 
(a)(3)(B)(i). From the movants that file timely motions, the presumptive “most adequate plaintiff” 
is the “person or group of persons” that “has the largest financial interest in the relief sought by 
the class” and “otherwise satisfies the requirements of Rule 23 of the Federal Rules of Civil 
Procedure.” 15 U.S.C. §78u-4(a)(3)(B)(iii)(I). 
After a presumptively most adequate plaintiff is identified, the Court must then determine 
if the presumption has been rebutted through “proof” by a member of the purported plaintiff class 
that the presumptively most adequate plaintiff “will not fairly and adequately protect the interests 
of the class” or “is subject to unique defenses that render such plaintiff incapable of adequately 
Case 2:24-cv-09510-ES-JRA     Document 14     Filed 12/23/24     Page 3 of 8 PageID: 229

 
4 
 
representing the class.” 15 U.S.C. §78u-4(a)(3)(B)(iii)(II). If the presumption is not rebutted, the 
presumptively most adequate plaintiff should be appointed as lead plaintiff. 
B. 
Movant Possesses the “Largest Financial Interest” 
 
According to 15 U.S.C. §78u-4(a)(3)(B)(iii), the Court shall appoint as Lead Plaintiff the 
movant or movants with the largest financial loss in the relief sought by the action. Movant Wax 
is entitled to that presumption because there are no other competing movants and therefore his 
losses are the greatest. Movant incurred a loss of $606,375.51 (LIFO) on his Class Period 
transactions in Sunlight securities. ECF No. 9-1 at 7. As the sole Lead Plaintiff movant, he holds 
the “largest financial interest” in the Action and is, therefore, presumptively the “most adequate 
plaintiff” for purposes of serving as Lead Plaintiff here. 15 U.S.C. §78u–4(a)(3)(B). See Sinai Roth 
v. Knight Trading Group, 228 F. Supp. 2d 524 (D.N.J. 2002).  
C. 
Movant Satisfies the Typicality and Adequacy Requirements of Rule 23 
 
In addition to possessing the largest financial interest, Movant satisfies the adequacy and 
typicality requirements of Rule 23. At the lead plaintiff selection stage, all that is required to satisfy 
Rule 23 is a preliminary showing that the lead plaintiff’s claims are typical and adequate. See Sklar 
v. Amarin Corp. PLC, No. 13-CV-06663 (FLW) (TJB), 2014 WL 3748248, at *6 (D.N.J. July 29, 
2014). Here, Movant satisfies both requirements. 
Typicality is met when a plaintiff’s claims arise from the same event, practice, or course 
of conduct that gives rise to other class members’ claims, and plaintiff’s claims are based on the 
same legal theory. See In re Merck & Co., Inc. Sec. Derivative & ERISA Litig., No. 05-CV-1151 
(SRC), 2013 WL 396117, at *5 (D.N.J. Jan. 30, 2013). Here, Movant Wax’s claims are typical of 
those of other class members because, like other class members, he purchased Sunlight securities 
Case 2:24-cv-09510-ES-JRA     Document 14     Filed 12/23/24     Page 4 of 8 PageID: 230

 
5 
 
during the Class Period, and his claims are based on the same legal theory and arise from the same 
events and course of conduct as the Class’ claims. ECF No. 9-1 at 7-8. 
Movant also makes the necessary prima facie showing of “adequacy” under Rule 23. 
Adequate representation is found if the representative has: (a) retained able and experienced 
counsel; and (b) the representative has no fundamental conflicts of interest with the interests of the 
class as a whole. See In re Nice Sys. Sec. Litig., 188 F.R.D. 206, 219 (D.N.J. 1999). Here, Movant 
clearly meets this standard, as he is a retired business owner who has been investing for 35 years, 
he is motivated to pursue recovery against the defendants – and in that regard his interests are 
aligned with those of the absent Class members – and he has retained in Rosca Scarlato LLC and 
Berger Montague PC highly experienced counsel with an extensive record of prosecuting 
securities class actions. Nor is there any indication, much less evidence, that Movant Wax is 
subject to unique defenses that impair his ability to represent the Class. ECF No. 9-1 at 8-10.  
Accordingly, Movant has made a preliminary showing that he satisfies the adequacy and 
typicality requirements of Rule 23. 
D. 
No Proof Exists to Rebut the Presumption in Favor of 
Movant’s Appointment as Lead Plaintiff 
As Movant has the largest financial interest in this litigation, the PSLRA establishes a 
rebuttable presumption that he is the most adequate plaintiff to represent the Class. This 
presumption may only be rebutted by “proof” that the presumptively most adequate plaintiff “will 
not fairly and adequately protect the interests of the class” or “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) (emphasis added); see also Montesano v. Eros Int’l PLC, 2020 WL 
1873015, at *10. As no other Class member has filed a motion seeking appointment as Lead 
Case 2:24-cv-09510-ES-JRA     Document 14     Filed 12/23/24     Page 5 of 8 PageID: 231

 
6 
 
Plaintiff, no proof has been offered – and none exists – which would rebut the presumption in 
favor of Movant Wax. 
E. 
Movant’s Selection of Lead Counsel Should Be Approved 
 
Lastly, the PSLRA vests authority in the lead plaintiff to select and retain lead counsel, 
subject to the court’s approval. See 15 U.S.C. § 78u-4(a)(3)(B)(v); In re Cendant Corp. Litig., 264 
F.3d 201, 276 (3d Cir. 2001) (stating that “the [PSLRA] evidences a strong presumption in favor 
of approving a properly-selected lead plaintiff’s decisions as to counsel selection and counsel 
retention”). Consistent with Congressional intent, a court should not disturb the lead plaintiff’s 
choice of counsel unless it is “necessary to protect the interests of the plaintiff class.” H.R. Conf. 
Rep. No. 104-369, at 35 (1995), as reprinted in 1995 U.S.C.C.A.N. 730, 734. 
Here, Movant has selected the law firms of Rosca Scarlato LLC and Berger Montague PC. 
As set forth in Movant’s opening brief, both firms have extensive experience representing 
investors in securities class actions, and they have the skill and resources to do so in this Action.  
ECF No. 9-1 at 10. 
III. 
CONCLUSION 
For the foregoing reasons and for the reasons set forth in his opening Motion, Movant Wax 
respectfully requests that the Court grant his Motion and enter an Order: (i) appointing Movant as 
Lead Plaintiff; (ii) approving Movant’s selection of Rosca Scarlato LLC and Berger Montague PC 
as Lead Counsel for the Class; and (iii) granting such other and further relief as the Court may 
deem just and proper. 
Dated: December 23, 2024 
 
 
Respectfully submitted, 
/s/ Paul Scarlato  
 
Paul J. Scarlato, Esq. (NJ ID 041921986) 
ROSCA SCARLATO LLC 
161 Washington Street, Suite 1025  
Conshohocken, PA 19428  
Case 2:24-cv-09510-ES-JRA     Document 14     Filed 12/23/24     Page 6 of 8 PageID: 232

 
7 
 
Telephone: (216) 946-7070  
E-mail: pscarlato@rscounsel.law  
 
Alan L. Rosca, Esq.  
ROSCA SCARLATO LLC 
2000 Auburn Dr. Suite 200  
Beachwood, OH 44122  
Telephone: (216) 946-7070 
E-mail: arosca@rscounsel.law 
 
Michael Dell’Angelo 
Andrew D. Abramowitz 
BERGER MONTAGUE PC 
1818 Market Street, Suite 3600 
Philadelphia, PA 19103 
Telephone: (215) 875-3000 
mdellangelo@bm.net 
aabramowitz@bm.net 
 
Counsel for Movant Mitchell Wax and the Proposed 
Class 
 
 
 
 
Case 2:24-cv-09510-ES-JRA     Document 14     Filed 12/23/24     Page 7 of 8 PageID: 233

 
8 
 
CERTIFICATE OF SERVICE 
 
I hereby certify that on December 23, 2024, a true and correct copy of the foregoing 
document was served by CM/ECF to the parties registered to the Court’s CM/ECF system. 
 
/s/ Paul J. Scarlato 
 
 
 
 
 
 
 
Paul J. Scarlato 
 
Case 2:24-cv-09510-ES-JRA     Document 14     Filed 12/23/24     Page 8 of 8 PageID: 234

File and source

File

gov.uscourts.njd.555169.14.0.pdf

Size

200,485 bytes

SHA-256

a35e253e06cc111352ec9a4abfd573005c4c15fa3346fb4629981c539ed96532

Our copy

gov.uscourts.njd.555169.14.0.pdf

Original

No public link identified.