United States District Court, E.D. Tennessee
For Cary Farrah, James H. Harrison, Jr., Individually and on behalf of all others similarly situated, Plaintiffs: Alfred G Yates, Jr., LEAD ATTORNEY, PRO HAC VICE, Law Office of Alfred G. Yates, Jr., P.C., Pittsburgh, PA; Christopher Martin Wood, LEAD ATTORNEY, PRO HAC VICE, Robbins Geller Rudman & Dowd LLP (Nashville), Nashville, TN; Danielle S Myers, Darren J Robbins, David C Walton, LEAD ATTORNEYS, PRO HAC VICE, Robbins Geller Rudman & Dowd LLP, San Diego, CA; George E Barrett, Jerry E Martin, Timothy L Miles, LEAD ATTORNEYS, PRO HAC VICE, Barrett, Johnston, Martin & Garrison, LLC, Nashville, TN.
For Karla Hurtado, Plaintiff: Benjamin I Sachs-Michaelss, Matthew M Houston, Robert I. Harwood, LEAD ATTORNEYS, PRO HAC VICE, Harwood Feffer LLP, New York, NY.
For Paul Jason Chaney, Consol Plaintiff: Frank J Johnson, LEAD ATTORNEY, PRO HAC VICE, Johnson & Weaver, LLP, San Diego, CA; George E Barrett, Timothy L Miles, LEAD ATTORNEYS, Barrett, Johnston, Martin & Garrison, LLC, Nashville, TN; Michael I Fistel, Jr, LEAD ATTORNEY, PRO HAC VICE, Holzer Holzer & Fistel, LLC, Atlanta, GA.
For Jayson Dauphinee, Consol Plaintiff: Paul K Bramlett, LEAD ATTORNEY, Bramlett Law Office, Nashville, TN; Robert Preston Bramlett, LEAD ATTORNEY, Bramlett Law Office, Nashville, TN.
For Provectus Biopharmaceuticals, Inc., H. Craig Dees, Timothy C. Scott, Peter R. Culpepper, Defendants: John S Hicks, LEAD ATTORNEY, Baker, Donelson, Bearman, Caldwell & Berkowitz (Nashville), Nashville, TN; Scott N Sherman, LEAD ATTORNEY, PRO HAC VICE, Baker, Donelson, Bearman, Caldwell & Berkowitz, PC (Atlanta), Atlanta, GA.
For Fawwaz Hamati, Movant: Kara M Wolke, Leanne Elise Heine, Peter A Binkow, Robert V Prongay, LEAD ATTORNEYS, PRO HAC VICE, Glancy Binkow & Goldberg, LLP (CA), Los Angeles, CA; Keith D Stewart, LEAD ATTORNEY, Stewart Dupree, PA, Knoxville, TN.
For Trilokie Khemai, Movant: J. Gerard Stranch, IV, LEAD ATTORNEY, Branstetter, Stranch & Jennings, PLLC, Nashville, TN; Megan M Sullivan, Nadeem Faruqi, Richard William Gonnello, LEAD ATTORNEYS, PRO HAC VICE, Faruqi & Faruqi, LLP, New York, NY.
For James Vig Sherrill, Movant: Cary L Bauer, Matthew B Long, Sidney W Gilreath, LEAD ATTORNEYS, Gilreath & Associates, PC (Knox), Knoxville, TN.
For Irfan Aras, Theodore Blatt, Movants: George E Barrett, Timothy L Miles, Barrett, Johnston, Martin & Garrison, LLC, Nashville, TN.
For The Provectus Investment Group, Movant: Paul K Bramlett, LEAD ATTORNEY, Bramlett Law Office, Nashville, TN.
For Amir G. Kamel, Movant: Chris T Cain, LEAD ATTORNEY, Scott & Cain, Knoxville, TN.
MEMORANDUM AND ORDER
H. Bruce Guyton, United States Magistrate Judge.
This case is before the undersigned pursuant to 28 U.S.C. § 636, the Rules of this Court, and Standing Order 13-02.
Now before the Court are two competing motions: the Motion of Fawwaz Hamati for Appointment as Lead Plaintiff and Approval of Lead Counsel [Doc. 40] and
Motion of Trilokie Khemai for Appointment as Lead Plaintiff and Approval of his Selection of Counsel [Doc. 43]. Counsel for Fawwaz Hamati, counsel for Trilokie Khemai, and defense counsel appeared before the undersigned to present oral arguments on November 14, 2014. The Court finds that the motions are now fully briefed and ripe for adjudication. [See Docs. 40, 41, 43, 44, 75, 77, 83, and 84].
This case is a proposed securities class action on behalf of all persons who purchased or otherwise acquired the publicly-traded securities of Provectus Biopharmaceuticals, Inc. (" Provectus" ), on or between December 17, 2013 and May 22, 2014, (the " Class Period" ). The Plaintiffs seek remedies under § § 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.
Defendant Provectus is a pharmaceutical company engaged in developing pharmaceuticals for oncology and dermatology indications. Plaintiffs maintain that Provectus's main focus is PV-10, which is intended for the treatment of several life threatening cancers, including metastatic melanoma, liver cancer, and breast cancer. Plaintiffs allege that defendants violated the federal securities laws by disseminating false and misleading statements throughout the Class Period, which caused Provectus stock to trade at artificially inflated prices during the Class Period.
On January 23, 2014, Adam Feuerstein published an article on TheStreet.com titled " The Obsolescence of Provectus' Skin Cancer Drug Means Current Speculative Run Ends Badly," alleging that Provectus's management misled investors about the prospects for PV-10, questioning why Provectus had not yet started its promised Phase 3 randomized controlled trial of PV-10 suitable for a Special Protocol Assessment after completing its Phase 2 study in 2010, and speculating that PV-10 may be obsolete in light of new skin cancer drugs being developed. Following this news, Provectus's stock price allegedly fell from $3.35 per share to close at $1.87 per share on January 23,2014, a decline of nearly 64% on volume of 30.5 million shares.
On May 20, 2014, Mr. Feuerstein noted in TheStreet.com that Provectus had prematurely described its PV-10 drug as a " breakthrough" drug for skin cancer on its website prior to a such a designation by the Food and Drug Administration. Then, on May 21, 2014, an investment community blog on SeekingAlpha.com highlighted the failure of Provectus to commence a Phase 3 trial of PV-10, and alleged that Provectus was tied to a stock promotion firm whose other stock recommendations were recently halted by the Securities and Exchange Commission. On the same day, Provectus issued a press release refuting inaccuracies on SeekingAlpha.com and denying any affiliation with stock promoters. Provectus's stock price allegedly dropped $0.22 per share, to close at $2.02 per share on May 22, 2014, a one-day decline of nearly 10 percent on heavy volume. On May 23, 2014, trading in Provectus stock was halted at $2.02 per share.
Plaintiffs allege that, as a result of Defendants' misrepresentations and/or omissions statements, Provectus securities traded at artificially inflated levels during the Class Period. They allege that, after the revelations concerning the Provectus's business and financial prospects entered the market, Provectus stock dropped precipitously from its high ...