On December 19, 2012, plaintiff Morad Ghodooshim filed this. class-action suit against Qiao Xing Mobile Communication Co.

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1 Case 1:12-cv ER Document 23 Filed 05/21/13 Page 1 of 5 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK x MOPJiJ GHODOOSHIM, Individually and Behalf of All Others Similarly Situated, Plaintiff, -v- QIAO XING MOBILE COMMUNICATION COMPANY, LTD., ZHI YANG WU, RUI LIN WU, DAVID LI, and KOK SEONG TAN, DefendantS x JED S. RAKOFF, tj.s.d.j. hf NT 12 Civ (JSR) MEMORANDUM ORDER On December 19, 2012, plaintiff Morad Ghodooshim filed this class-action suit against Qiao Xing Mobile Communication Co., Zhi Yang Wu, Rui Lin Wu, David Li, and Kok Seong Tan, alleging violations of 10(b) of the Securities Exchange Act of 1934 (the "Exchange Act"), 15 U.S.C. 78j (b), Rule lob-s promulgated thereunder, 17 C.F.R b-5, and 20(a) of the Exchange Act, 15 U.S.C. 78t(a). Under the Private Securities Litigation Reform Act ("PSLRA"), a plaintiff who commences a securities class action such as this one must, within twenty days of filing the action, publish a notice to the proposed class informing class members of their willingness and ability to serve as lead plaintiff. See 15 U.S.C. 78u-4 (a) (3) (A) (i) ; see also id. 78u-4 (a) (3) (B) (1). Mr. Ghodooshim met this requirement by publishing a notice in Globe Newswire on the same day the Complaint was filed. See Ex. A to the Mem. of Law in Supp. of the Mot. by Morad Ghodooshim for Appointment as Lead P1. & Approval of Counsel ("Lead P1. Mot.") filed Feb. 19, 2013, ECF No. 9.

2 Case 1:12-cv ER Document 23 Filed 05/21/13 Page 2 of 5 On February 19, 2013, Mr. Ghodooshim moved for appointment as lead plaintiff. On the same day, another member of the proposed class, Ingmar Bueb, also moved to serve as lead plaintiff, but a week later withdrew his motion. On April 5, 2013, the Court held a hearing on Mr. Ghodooshim' s unopposed motion for appointment as lead plaintiff, and on April 12, 2013, the Court, by "bottom-line" Order, appointed Mr. Ghodooshim as lead plaintiff for the proposed class and approved his choice of counsel, the firm of Pomerantz Grossman Huff ord Dahlstrom & Gross LLP. This Memorandum explains the reasons for those decisions. Under the PSLRA, the Court "shall appoint as lead plaintiff the member or members of the purported plaintiff class that the court determines to be most capable of adequately representing the interests of class members." 15 U.S.C. 78u-4(a) (3) (B) (1). The PSLRA requires a court to presume that "the most adequate plaintiff" is "the person or group of persons" that: (aa) has either filed the complaint or made a motion in response to a notice.. (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. Id. 78u-4(a) (3) (B) (iii). Here, Mr. Ghodooshim both filed the complaint and made a motion to serve as lead plaintiff, and it appears that he has the largest known financial stake in the relief sought by the class: he purchased 121,900 2

3 Case 1:12-cv ER Document 23 Filed 05/21/13 Page 3 of 5 shares of Qiao Xing Mobile, for a total of $434,214, and was left with 102,207 shares at the end of the class period, suffering a total loss of $389,470. See Lead P1. Mot. Ex. C. Thus, Mr. Ghodooshim satisfies the first two requirements of 15 U.S.C. 78u-4(a) (3) (B) (iii). As to the third requirement, the Court found that Mr. Ghodooshim satisfies the requirements of Rule 23 of the Federal Rules of Civil Procedure. At the April 5, 2013 hearing, the Court extensively questioned Mr. Ghodooshim about his ability to adequately represent the class as lead plaintiff. An Ohio resident and emeritus faculty member at Cuyahoga Community College, Mr. Ghodooshim explained to the Court that, after suffering significant losses on his shares of Qiao Xing Mobile, he approached various law firms about taking on his case. See Apr. 5, 2013 Hr'g Tr. Although Mr. Ghodooshini indicated that he did not have significant experience overseeing securities class actions, between his substantial losses and the initiative he showed in seeking out counsel, the Court believes that Mr. Ghodooshim has demonstrated that he has "a sufficient interest in the outcome to ensure vigorous advocacy" on behalf of the class. Riordan v. Smith Barney, 113 F.R.D. 60, 64 (N.D. Ill. 1986) Moreover, the Court has seen no basis to suggest that Mr. Ghodooshim's claims as a Qiao Xing Mobile shareholder are anything but typical of the class. See In re Oxford Health Plans, Inc. Sec. Litig., 182 F.R.D. 42, 50 (S.D.N.Y. 1998) (finding Rule 23's typicality requirement to be satisfied at this stage where the proposed lead plaintiff's "claims and 3

4 Case 1:12-cv ER Document 23 Filed 05/21/13 Page 4 of 5 injuries arise from the same conduct from which the other class members' claims and injuries arise"). Accordingly, the Court granted Mr. Ghodooshim's motion to serve as lead plaintiff. With respect to plaintiff's choice of lead counsel, the PSLRA provides that the "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). Here, Mr. Ghodooshim has requested that the firm he previously retained -- Pomerantz Grossman Hufford Dahlstrom & Gross LLP -- serve as lead counsel. At the April 5, 2013 hearing, the court raised with counsel a question of whether counsel's retention agreement presented a problem under the New York Lawyer's code of Professional Responsibility, since counsel promised in its engagement letter with Mr. Ghodooshim that under no circumstances would he be responsible for the costs of this action. See DR (2012) ("While representing a client in connection with contemplated or pending litigation, a lawyer shall not advance or guarantee financial assistance to the client, except that... [a] lawyer may advance court costs and expenses of litigation, the repayment of which may be contingent on the outcome of the matter..."). In response, plaintiff's counsel called to the court's attention several cases where district courts have held that this provision does not require recoupment of costs from the lead plaintiff in class actions, regardless of the outcome. See, e.g., In re WorldCom, Inc. Sec. Litig., 219 F.R.D. 267, 284 (5.D.N.Y. 2003). While the matter remains, in the Court's mind, not 4

5 Case 1:12-cv ER Document 23 Filed 05/21/13 Page 5 of 5 entirely free from doubt, nonetheless on the facts of this case, the Court is satisfied it need not reach the issue at this stage of the case. Accordingly, for the foregoing reasons, the Court appointed Morad Ghodooshim to serve as lead plaintiff for the proposed class and approved his choice of counsel, Pomerantz Grossman Huff ord Dahlstrom & Gross LLP. The Clerk of the Court is hereby directed to close items number 5 and 8 on the docket of this case. SO ORDERED. Dated: New York, NY may.o, 2013