Free Case Transferred In - District Transfer - District Court of California - California

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HELLER EHRMAN LLP Michael L. Charlson (MC-2378) (Cal. Bar 122125) Kevin A. Burke (KB-0580) 7 Times Square New York, New York 10036 Phone: (212) 832-8300 Fax: (212) 763-7600 Attorneys for defendants Threshold Pharmaceuticals, Inc., Harold E. Selick, and Janet I. Swearson UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK JERRY TWINDE, On Behalf of Himself and All Others Similarly Situated, Plaintiff, v. THRESHOLD PHARMACEUTICALS, INC., HAROLD "BARRY" E. SELICK and JANET I. SWEARSON, Defendants. RAYNOLD L. GILBERT, Individually and On Behalf of All Others Similarly Situated, Plaintiff, v. THRESHOLD PHARMACEUTICALS, INC., HAROLD "BARRY" E. SELICK and JANET I. SWEARSON, Defendants. : : : : : : : : : : : : : : : : : : : : : : : :

Civil Action No.: 07 CV 6227 JSR Consolidated with 07 CV 6490 JSR APPENDIX OF UNPUBLISHED CASES CITED IN DEFENDANTS' MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS' MOTION TO TRANSFER VENUE UNDER 28 U.S.C. § 1404(a)

The following is a list of the unpublished cases cited in the Memorandum of Points and Authorities in Support of Defendants' Motion to Transfer Venue Under 28 U.S.C. § 1404(a). A true and correct copy of each unpublished case is annexed hereto at the exhibit tab indicated in the list below:

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Unpublished Cases: Elec. Workers Pension Fund, Local 103, I.B.E.W. v. Nuvelo, No. 07-CV-975, 2007 WL 2068107 (S.D.N.Y. July 20, 2007) In re AtheroGenics Sec. Litig., No. 05-CV-00061, 2006 WL 851708 (S.D.N.Y. Mar. 31, 2006) In re Connetics Sec. Litig., No. 06-CV-11496, 2007 WL 1522614 (S.D.N.Y. May 23, 2007) Strougo v. Brantley Capital Corp., No. 06-CV-13315, 2007 WL 1683348 (S.D.N.Y. June 3, 2007)

Tab No. 1 2 3 4

Dated: August 16, 2007

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TAB 1

Case 4:07-cv-04972-CW
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Electrical Workers Pension Fund, Local 103, I.B.E.W. v. Nuvelo, Inc. S.D.N.Y.,2007. Only the Westlaw citation is currently available. United States District Court,S.D. New York. ELECTRICAL WORKERS PENSION FUND, LOCAL 103, I.B.E.W., On Behalf Of Itself And All Others Similarly Situated, Plaintiff, v. NUVELO, INC., Ted W. Love, Gary S. Titus, and Shelly D. Guyer, Defendants. Barry Logan, Individually and On Behalf Of Himself and All Others Similarly Situated, Plaintiff, v. Nuvelo, Inc., Ted W. Love, Gary S. Titus, and Shelly D. Guyer, Defendants. Arnold Giles, Individually and On Behalf Of Himself and All Others Similarly Situated, Plaintiff, v. Nuvelo, Inc., Ted W. Love, Gary S. Titus, and Shelly D. Guyer, Defendants. Herbert Braker, Individually and On Behalf Of Himself and All Others Similarly Situated, Plaintiff, v. Nuvelo, Inc., Ted W. Love, Gary S. Titus, and Shelly D. Guyer, Defendants. Nos. 07 Civ. 975(HB), 07 Civ. 1229(HB), 07 Civ. 1777(HB), 07 Civ.1953(HB). July 19, 2007. JOINT OPINION AND ORDER Hon. HAROLD BAER, JR., District Judge. *1 Defendants Nuvelo, Inc. ("Nuvelo") and three of Nuvelo's individual officers and directors, Ted Love, Gary Titus, and Shelly Guyer (collectively, "Defendants") move to transfer venue over these four putative securities class actions to the Northern FN1 District of California. Plaintiffs Electrical Workers Pension Fund, et. al. ("Plaintiffs") oppose. FN1. Four Nuvelo-related securities class actions before this Court are at issue in this

motion-Electrical Workers v. Nuvelo, 07-cv-975 (S.D.N.Y); Logan v. Nuvelo, 07-cv-1229 (S.D.N.Y.); Giles v. Nuvelo, 07-cv-1777 (S.D.N.Y.); and Braker v. Nuvelo, 07-cv-1953 (S.D.N.Y.) The parties have agreed to delay this Court's consideration of Plaintiffs' motions to consolidate the four cases and appoint Lead Plaintiffs, as if the case is transferred, it may be more appropriate to let the transferee rule on those issues. Citations in this Opinion will be to documents filed in connection with Electrical Workers v. Nuvelo, 07-cv-975, unless otherwise noted. For the reasons articulated below, Defendants' motion to transfer venue is GRANTED. I. BACKGROUND A. Underlying Facts of Action Nuvelo is a biopharmaceutical company, incorporated in Delaware and headquartered in San Carlos, CA, near Silicon Valley. See Affidavit of Shelly D. Guyer in Support of Defendants' Motion to Transfer Venue, Apr. 18, 2007 ("Guyer Aff."), ¶ 5; Complaint, Logan v. Nuvelo, 07-cv-1229, ¶ 11. On January 5, 2006 (the beginning of the Class Period), Nuvelo announced a partnership with the company Bayer Health Care AG regarding "alfimephrase," Nuvelo's new drug in development that is designed to dissolve blood clots. Complaint ¶¶ 36-37. Nuvelo announced that Bayer would pay it $50 million up front, and potentially up to $335 million in additional payments, in exchange for the right to commercialize alfimephrase outside the United States. Id. at ¶ 36. Defendants allegedly stated in a conference call that they anticipated the "alfimephrase" drug would win FDA approval and thus reach the U.S. consumer market by 2008. Id. at ¶ 15. Nuvelo's CEO Ted Love allegedly predicted that the drug would generate $500 million in annual sales. Id. Nuvelo's stock price rose. Id.

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On January 30, 2006, Nuvelo conducted a "follow-on" stock offering that raised over $119 million for the company. Complaint ¶ 16. Nuvelo's underwriters for this offering were JP Morgan, Lehman Brothers, and Deutsche Bank. Id. at ¶¶ 16, 26. Over the next several months, Nuvelo embarked on Phase III clinical trials to test alfimephrase. Complaint ¶ 19. Nuvelo also made several public statements regarding alfimephrase. Some statements were in the form of press releases issued from Nuvelo's California headquarters. See generally Complaint ¶¶ 36-56; Guyer Aff. ¶ 6; Affidavit of Gary S. Titus in Support of Defendants' Motion to Transfer Venue, Apr. 18, 2007 ("Titus Aff.") ¶ 6. Some statements were allegedly made at presentations at approximately eight analysts' and investors' conferences in New York. See Declaration of David A. Rosenfeld In Support of Plaintiffs' Opposition ..., May 4, 2007 ("Rosenfeld Decl."), ¶ 2, Ex. A. On December 11, 2006 (the end of the Class Period), Nuvelo announced that two Phase III trials (in technical terms, the "NAPA-2" and "SONOMA-2" trials) did not go as well as they hoped (or in Plaintiff's words, "failed"). See Complaint ¶¶ 56, 63. The company disclosed that prior clinical trials did not involve the use of a placebo; that any past effectiveness of the drug was not due to the drug itself, but other factors; and that other Phase III clinical trials (in technical terms, the "NAPA-3" and "SONOMA-3" trials) would be put on hold. See Memorandum of Law in Opposition ..., May 4, 2007 ("Pl.Opp."), at 4; Complaint ¶ 56. Nuvelo's stock dropped nearly 80%, from $19.55 to $4.05. Complaint ¶¶ 57, 64. B. Facts Relating to Defendants' Motion to Transfer Venue *2 Nuvelo avers that the vast majority of operative facts, witnesses, and documents that relate to this litigation are located in the Northern District of California. Nuvelo does not have operations, offices, or employees in New York. Guyer Aff. ¶ 5; Titus Aff. ¶ 5. Nuvelo states that the three individual defendants, its senior management, its officers,

and the vast majority of its employees are located at, or near, its headquarters in California. Guyer Aff. ¶ ¶ 5-6; Titus Aff. ¶ 5-6. Nuvelo states that the individual employees who helped prepare the press releases at issue are located at its headquarters in California, and that the press releases were issued from its headquarters. Guyer Aff. ¶ 6; Titus Aff. ¶ 6. Nuvelo states that the officers and employees that designed and analyzed the NAPA-2 and SONOMA-2 clinical studies at issue are all located at its headquarters in California. Id. Nuvelo states that most of the relevant documents are either located at its headquarters or at a separate warehouse in Union City, CA. Guyer Aff. ¶ 7. Plaintiffs aver that Nuvelo or (it is not entirely clear) the individual Defendants made presentations at approximately eight analysts' and investors' conferences in New York during the Class Period, during which they made statements about the drug alfimephrase. See Rosenfeld Decl. ¶ 2, Ex. A. Plaintiffs do not at this time specifically identify FN2 those particular statements in their Complaint. FN2. Plaintiffs aver that after the Court appoints a Lead Plaintiff, that Plaintiff will file a consolidated amended complaint which will include a more comprehensive list of allegedly materially false and misleading statements. See Pl. Mem. Opp. at 7 n. 6. Plaintiffs also note that Defendants' underwriters for their follow-on stock offering (before which, Plaintiffs allege, Defendants made false statements about the drug in order to raise additional funds) all have offices in New York. Complaint at ¶¶ 16, 26. Nuvelo rebuts that its primary contacts at two of these three underwriters, including JP Morgan, its lead underwriter, worked out of San Francisco, not New York. Guyer Reply Aff. ¶ 3. Lastly, Plaintiffs note that one of Nuvelo's Phase III clinical trials took place in the Bronx, two other trials took place in New Jersey, and one trial took place in Pennsylvania. See Rosenfeld Decl., Ex. D. Nuvelo, however, points out that these particular

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trials in New York, New Jersey, and Pennsylvania were in fact the NAPA-3 and SONOMA-3 trials-not the failed NAPA-2 and SONOMA-2 trials which engendered this lawsuit. See Guyer Aff., Ex. G; Complaint ¶ 56; Rosenfeld Decl., Ex. D. Plaintiffs do not allege in their papers before me that any of the class plaintiffs reside in New York. II. STANDARD OF REVIEW 28 U.S.C. § 1404(a) provides that: "for the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought." 28 U.S.C. § 1404(a) (2006); see generally, e.g., Montgomery v. TAP Enters., 2007 U.S. Dist. LEXIS 12702, at *6-8 (S.D.N.Y. Feb. 26, 2007) (Baer, J.). A motion to transfer pursuant to § 1404(a) rests within the "sound discretion" of the district court. Schwartz v. R.H. Macy's, Inc., 791 F.Supp. 94 (S.D.N.Y.1992). The burden is on the movant to establish that there should be a change of forum. Factors Etc., Inc. v. Pro Arts, Inc., 579 F.2d 215, 218 (2d Cir.1978); see also Editorial Musical Latino Americana, S.A. v. Mar Int'l Records, 829 F.Supp. 62, 66 (S.D.N.Y.1993) (movant must make "clear and convincing showing"). Although the plaintiff's choice of forum is entitled to substantial weight, this presumption is reduced if the cause of action bears "little material connection" to the chosen forum. See, e.g., St. Regis Mohawk Tribe v. State of New York, 774 F.Supp. 185, 189 (S.D.N.Y.1991); see also Arrow Electronics Inc. v. Ducommun, Inc., 724 F.Supp. 264, 265 (S.D.N.Y.1991) (where the facts of the action bear little connection to the chosen forum, "plaintiff's choice is given reduced significance"). This presumption is reduced further in class actions, particularly securities class actions. See In re AtheroGenics Sec. Litig., 2006 U.S. Dist. LEXIS 15786, at *9 (S.D.N.Y.2006) (Holwell, J.) ("AtheroGenics" ). III. DISCUSSION *3 When evaluating a motion to transfer, a court

should consider the following factors: (1) the convenience of witnesses; (2) the availability of process to compel the attendance of unwilling witnesses; (3) the convenience of the parties; (4) the locus of operative facts; (5) the location of relevant documents and relative ease of access to sources of proof; (6) the relative means of the parties; (7) the forum's familiarity with the governing law; (8) the weight accorded the plaintiff's choice of forum; and (9) trial efficiency and the interests of justice, based FN3 on the totality of circumstances. See, e.g., Anadigics, Inc. v. Raytheon Co., 903 F.Supp. 615, 617 (S.D.N.Y.1995). "The convenience of the witnesses and the parties are generally considered as the most important factors in a transfer application." D'anton Jos, S.L. v. Doll Factory, 937 F.Supp. 320, 322 (S.D.N.Y.1996); see also Hubbell Inc. v. Pass & Seymour, 883 F.Supp. 955, 962 (S.D.N.Y.1995) ("The core determination under § 1404(a) is the center of gravity of the litigation, a key test of which is the convenience of witnesses."). FN3. To succeed on a motion to transfer venue, Defendant must as a threshold matter establish that the action could have been brought in the proposed transferee district. See, e.g., Montgomery v. TAP Enters., 2007 U.S. Dist. LEXIS 12702, at *9 n. 6, citing Van Dusen v. Barrack, 376 U.S. 612 (1964). Secondly, Defendant must "demonstrate that the balance of the convenience of the parties and witnesses and the interests of justice are in [his] favor." See Consol. Metal Prods., Inc. v. Am. Petroleum Inst., 569 F.Supp.773, 774 (D.D.C.1983). Because it is undisputed here that these actions could have been brought in the proposed transferee district (i.e. the Northern District of California), the first inquiry does not require examination. I will address the most relevant factors first. A. Plaintiff's Choice of Forum

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A plaintiff's choice of forum "is generally entitled to considerable weight and should not be disturbed unless the balance of the factors is strongly in favor of the defendant." AtheroGenics, 2006 U.S. Dist. LEXIS 15786, at *9, citing Berman v. Informix Corp., 30 F.Supp.2d 653, 659 (S.D.N.Y.1998). However, "while it is axiomatic that a plaintiff's choice of forum is entitled to great consideration, the adage has little weight in stockholder class actions." Id., citing, e.g., Eichenholtz v. Brennan, 677 F.Supp. 198, 202 (S.D.N.Y.1988) (in a securities class action, there will be "numerous potential plaintiffs, each possibly able to make a showing that a particular forum is best suited," and thus plaintiff's choice receives less deference); but see In re Geopharma Sec. Litig., 2005 U.S. Dist. LEXIS 8885, at *3-4 (S.D.N.Y.2005) (Scheindlin, J.) ("Geopharma" ) ("affording less deference to representative plaintiffs does not mean they are deprived of all deference."). Here, in this securities class action, plaintiff's choice of forum is entitled to less deference. Indeed, there is no allegation that any of the class plaintiffs reside in New York, such that those plaintiffs might be prejudiced by transfer. Even leaving the question of deference to plaintiff's choice of forum aside, there remains ample support to rule in favor of transfer based on the other FN4 factors, as further articulated below. FN4. See Laborers Local 100 & 397 Pension Fund v. Bausch & Lomb, 2006 U.S. Dist. LEXIS 36018, at * 13-14 (S.D.N.Y.2006) (Baer, J.) ("Bausch & Lomb" ) ("Defendants argue ... that courts have accorded `little weight' to plaintiff's choice of forum in securities class actions ... Whether that's so or not here, the other factors are persuasive."). B. Convenience of Parties Defendants Nuvelo, and the three individual Defendants, all reside in the Northern District of California. Guyer Aff. ¶¶ 5-6; Titus Aff. ¶ 5-6. As noted above, it appears no class plaintiffs reside in

this District. This factor favors transfer. C. Convenience of Witnesses and Availability of Process *4 Defendants argue the vast majority of witnesses aside from the individual Defendants (i.e. Nuvelo employees and ex-employees) are all located in California, and that process would not be available to compel their testimony in New York, were the actions to proceed to trial here. Plaintiffs aver that some non-party witnesses are located in New York. For example, Plaintiffs argue that Nuvelo's underwriters are located in New York. Defendants rebut, however, that the primary contacts for two out of three of Nuvelo's underwriters, including its lead underwriter, JP Morgan, are in fact located in San Francisco. See Guyer Reply Aff. ¶ 3. Plaintiffs also aver that securities analysts that follow Nuvelo are located in New York. Defendants rebut, however, that three of the analysts who follow Nuvelo are also based in San Francisco. See Guyer Reply Aff. ¶ 4. To the extent that Plaintiffs seek to call underwriters and securities analysts at trial, it is doubtful Plaintiffs will experience any prejudice by transfer. Plaintiffs also aver that some non-party witnesses are located near (albeit not in ) New York. For example, Plaintiffs aver that Bayer's United States corporate headquarters is located in Pittsburgh, and its pharmaceutical division is located in West Haven, CT. See Pl. Mem. Opp. at 10. Additionally, Plaintiffs aver that FDA employees are located in Washington, DC. See Geopharma, 2005 U.S. Dist. LEXIS 8885, at *7 (noting that inter alia, FDA employees are located in Washington, DC, and calling this factor "neutral"). Typically, however, district courts have given little, if any, weight to the convenience of witnesses who reside in neither the transferor nor transferee forum. See, e.g., AtheroGenics, 2006 U.S. Dist. LEXIS 15786, at *15, citing Wechsler v. Macke Int'l Trade, Inc., 1999 WL 1261251, at *6 (S.D.N . Y.1999) ("The Court dismisses from consideration the convenience of witnesses who are located outside both the current and

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transferee forums."). More importantly, "it is the nature of the testimony and not the number of prospective witnesses on each side that is important." In re Nematron Corp. Secs. Litig., 30 F.Supp.2d at 402. Here, notwithstanding that some tangentially related witnesses may reside in or near New York, the far greater number of the most material witnesses-i.e., the individual Defendants and Nuvelo employees-are located in California. See AtheroGenics, 2006 U.S. Dist. LEXIS 15786, at *15 (finding that this factor favored transfer to Georgia because Defendants and employees resided there, despite the fact that securities analysts and defendants' public relations firm resided in New York); Nematron Corp. Secs. Litig., 30 F.Supp.2d at 402 (finding that this factor favored transfer to Defendant's home district because "testimony more critical and extensive is likely to be provided by the parties and witnesses residing" there). In sum, this factor favors transfer to California. D. Locus of Operative Facts *5 Nuvelo argues that the locus of the operative facts of this lawsuit-i.e., Nuvelo's allegedly fraudulent statements contained in its press releases-were issued from its company headquarters in California. "Misrepresentations and omissions are deemed to `occur' in the district where they are transmitted or withheld, not where they are received." See, e.g., Laborers Local 100 & 397 Pension Fund v. Bausch & Lomb, 2006 U.S. Dist. LEXIS 36018, at *16 (where "all of the press releases and corporate filings, as well as the alleged misstatements, originated at Bausch & Lomb headquarters in Rochester," this factor favored transfer); In re Nematron Corp. Secs. Litig., 30 F.Supp.2d 397, 404 (S.D.N.Y.1998); In re Hanger Orthopedic Group, Inc., 418 F.Supp.2d 164, 169 (S.D.N.Y.2006); AtheroGenics, 2006 U.S. Dist. LEXIS 15786, at *13. The locus of the operative facts of this lawsuit centers on the misrepresentations made by Nuvelo in its press releases-all of which, as a matter of law, "occur" in California. Plaintiffs' attempts to aver

that other allegedly "operative" facts occurred in New York are unavailing. For example, the clinical trials that occurred in or near the Southern District of New York were not the failed trials that engendered the fraud alleged in these actions. And even had Plaintiffs alleged specific misrepresentations that occurred at analysts' conferences in New York, courts have generally not found that statements at analysts' conferences alone warranted transfer where the "locus of all relevant decisionmaking" emanated from the company's headquarters, as is the case here. See AtheroGenics, 2006 U.S. Dist. LEXIS 15786, at *12, 13 n. 5. Because the "locus of operative facts" here is in FN5 California, this factor favors transfer. FN5. Although the majority of Courts in this district follow this approach, one Court in this district takes a different view. See Geopharma, 2005 U.S. Dist. LEXIS 8885, at *7 (where defendants argued that press releases were drafted at headquarters, and plaintiffs argued that information was disseminated via the NASDAQ exchange in New York, Court held that "operative facts" were spread across many districts). E. Location of Relevant Documents Defendants argue that the relevant documents are available either at its headquarters, or at a separate storage facility in Union City, CA. "Securities fraud litigation almost invariably involves production and review of a vast number of documents, almost all of which will be in the defendants' possession." Blass v. Capital Int'l Sec. Group, 2001 U.S. Dist. LEXIS 3504, at *17-18 (E.D.N.Y.2001). Although Plaintiffs aver that some documents relating to a) the underwriters, b) Bayer, or c) the clinical trials will be produced from or near New York, as above, these documents (to the extent they actually reside in New York), like the witnesses, are far less relevant than the documents in California. This factor favors transfer. F. Remaining Factors

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The factors of a) the relative means of the parties, b) the respective forums' familiarity with the governing Iaw, and c) trial efficiency and the interests of justice are all neutral. IV. CONCLUSION Because the majority of factors favor transfer, Defendants' motion to transfer venue for these four actions-Electrical Workers v. Nuvelo, 07-cv-975 (S.D.N.Y); Logan v. Nuvelo, 07-cv-1229 (S.D.N.Y.); Giles v. Nuvelo, 07-cv-1777 (S.D.N.Y.); and Braker v. Nuvelo, 07-cv-1953 (S.D.N.Y.)-is GRANTED. *6 The Clerk of the Court is instructed to transfer these four actions to the Northern District of California and remove them from my docket. SO ORDERED. S.D.N.Y.,2007. Electrical Workers Pension Fund, Local 103, I.B.E.W. v. Nuvelo, Inc. Slip Copy, 2007 WL 2068107 (S.D.N.Y.) END OF DOCUMENT

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Not Reported in F.Supp.2d Not Reported in F.Supp.2d, 2006 WL 851708 (S.D.N.Y.) (Cite as: Not Reported in F.Supp.2d)

912359 (S.D.N.Y. Apr. 19, 2005). In re AtheroGenics Securities Litigation S.D.N.Y.,2006. Only the Westlaw citation is currently available. United States District Court,S.D. New York. In re ATHEROGENICS SECURITIES LITIGATION No. 05 Civ. 00061. March 31, 2006. MEMORANDUM OPINION AND ORDER HOLWELL, J. *1 Defendants AtheroGenics, Inc. ("AtheroGenics"), Michael Henos, Russell Medford, Mark Colonnese, Robert Scott, and Martin Wasserman) (the "individual defendants," and together with AtheroGenics collectively, "defendants"), have moved pursuant to 28 U.S.C. § 1404(a) to transfer this federal securities class action to the United States Court for the Northern District of Georgia. For the reasons set forth below, the motion is granted. BACKGROUND Six putative class action complaints have been filed against defendants in this matter: two in the FN1 Southern District of New York, which were consolidated as the above-captioned action by order of this Court on April 18, 2005, and four in the FN2 Northern District of Georgia, which plaintiffs voluntarily dismissed on July 14, 2005 following the filing of the instant motion. FN1. Andrada v. Atherogenics, Inc., et al. (No. 05 Civ. 00061), filed on January 5, 2005; Faulkner v. Atherogenics, Inc., et al. (No. 05 Civ. 01938), filed on February 8, 2005. The memorandum opinion and order consolidating these actions also appointed the Billings Group as lead plaintiff and designated Milberg Weiss Bershad & Schulman LLP, Chitwood & Harley, and Dyer & Shuman LLP as co-lead counsel. Andrada v. Atherogenics, Inc., 2005 WL FN2. Bassett v. Atherogenics, Inc. et al. (No. 05 Civ. 00070), filed on January 7, 2005; Corson v. Atherogenics, Inc. et al. (No. 05 Civ. 00082), filed on January 10, 2005; Brahmbhatt v. Atherogenics, Inc., et al. (No. 05 Civ. 00096), filed on January 11, 2005; Christian United Fellowship v. Atherogenics, Inc. et al. (No. 05 Civ. 00211), filed on January 25, 2005. The actions charge that defendants violated federal securities laws by issuing a series of materially false and misleading statements between September 28, 2004 and December 31, 2004 regarding the clinical trial results of a drug developed by AtheroGenics, a Georgia-based pharmaceutical research company. The plaintiffs allege that these false statements regarding the drug's potential to treat coronary artery disease had the effect of artificially inflating the market price of AtheroGenics's securities in violation of Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder; they further allege that the individual defendants are liable as controlling persons of AtheroGenics under Section 20(a) of the Exchange Act. FN3 According to the complaint, AtheroGenics is a research-based pharmaceutical company, focused on the discovery, development and commercialization of novel drugs for the treatment of chronic inflammatory diseases, including heart disease or atherosclerosis. (Compl.¶ 2.) AtheroGenics's AGI-1067 drug was developed and designed to treat atherosclerosis of the blood vessels of the heart, or coronary artery disease, in a manner that existing therapy could not. (Id. at ¶ 3.) On September 27, 2004, after the markets closed, defendants issued a press release entitled "AtheroGenics Announces Positive Interim Results from CART-2 Study-Data Show Highly Statistically Significant Plaque Regression with AGI-1067 in One-Year Study." (Id. at ¶ 24.) The

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release reported positive preliminary results regarding the drug's ability to reduce the plaque volume associated with coronary atherosclerosis. (Id.) It also announced that these interim results were analyzed by Jean-Claude Tardif, M.D. at the Montreal Heart Institute in Montreal and by Steven Nissen, M.D. at the Cleveland Clinic Foundation in Ohio. (Id.) FN3. A consolidated amended complaint has not yet been filed in this action. Citations are to the Faulkner complaint unless otherwise noted. Following this preliminary report, defendants issued another release on November 22, 2004 entitled "AtheroGenics Reports Positive Final Results from CART-2 Clinical Trial of AGI1067-AGI-1067 Achieves Statistically Significant Plaque Regression Versus Baseline." (Id. at ¶ 25.) The release noted positive final data from the FN4 CART-2 study. (Id.) That same day, defendants issued a second release with regard to another planned study of the drug, the Phase III ARISE trial, entitled "AtheroGenics Reaches Original Enrollment Target of 4,000 Patients in ARISE Phase III Clinical Trial of AGI-1067-Company Reiterates Plan to Extend Enrollment." In the release, defendants indicated the desire to continue enrollment so "as to accelerate the accumulation of patient years of exposure to the drug." (Id.) Following these November 22 announcements, AtheroGenics' stock price fell by 15%. (Andrada Compl. at ¶ 30.) FN4. The Andrada complaint gives November 23 as the date of this release. (Andrada Compl. ¶ 31.) *2 On January 3, 2005, AtheroGenics announced in another release it had decided to increase the number of patients in the Phase III study, that the study would be longer in duration, and that proposed amendments to the Food and Drug Administration regarding the study would be needed (Id. at ¶¶ 9, 28.) This news, according to the complaint, caused AtheroGenics's stock to fall

20%. (Id. at ¶ 9.) Two days later, defendants disclosed that the SEC and the NASD had both opened informal inquiries "related to our September 27, 2004 announcement of interim results from the CART-2 trial for AGI-1067." (Declaration of Jeffery A. Berens, Esq. ("Berens Decl."), Ex. N at 22 (excerpts from AtheroGenics's SEC Form 10-K for fiscal year 2004). According to plaintiffs, defendants were aware on or prior to September 27, 2004 of troubling aspects of the Phase IIb trial that would impact both the final results of the trial and the appropriate execution of the ARISE Phase III trial, yet obscured this knowledge and released false information to the market. (Compl. at ¶ 5.) Plaintiffs assert defendants were made aware of further studyrelated problems in November 2004 that they concealed, and that the releases of November 22, 2004 were also false and misleading. (Id. at ¶¶ 6-8.) DISCUSSION Section 1404(a) of Title 28 of the United States Code provides that: "For the convenience of the parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought." 28 U.S.C. 1404(a) (2000). The purpose of this Section is to "prevent waste of time, energy and money and to protect litigants, witnesses and the public against unnecessary inconvenience and expense." Indian Harbor Ins. Co. v. Factory Mut. Ins. Co., 2005 WL 1994017, at *2 (S.D.N.Y. Aug. 17, 2005). The "preliminary inquiry is whether the action sought to be transferred is one that might have been brought in the transferee court." Cavu Releasing, LLC. v. Fries, 419 F.Supp.2d 388, 2005 WL 1944269 at *5-6 (S.D.N.Y. Aug. 12, 2005); Mattel, Inc. v. Robarb's, Inc., 139 F.Supp.2d 487, 490 (S.D.N.Y.2001) (internal citations omitted). The Exchange Act provides for venue in any district "wherein the defendant is found or is an inhabitant or transacts business." 14 U.S.C. § 78aa. Here, the parties do not dispute that the Northern District of

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Case 4:07-cv-04972-CW Document 1-15 Not Reported in F.Supp.2d Not Reported in F.Supp.2d, 2006 WL 851708 (S.D.N.Y.) (Cite as: Not Reported in F.Supp.2d)

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Georgia is a district where the action might have originally been brought; indeed, four similar actions were so filed in early 2005. See Lead Pls.' Mem. at 8 n. 6. Once a defendant meets that threshold determination regarding the transferee district, courts will further examine factors such as: (1) the place where the operative facts occurred; (2) the convenience of the parties; (3) the convenience of witnesses; (4) the relative ease of access to sources of proof; (5) the availability of process to compel attendance of unwilling witnesses; (6) the plaintiff's choice of forum; (7) the forum's familiarity with governing law; and (8) trial efficiency and the interests of justice. Linzer v. EMI Blackwood Music, Inc., 904 F.Supp. 207, 216 (S.D.N.Y.1996) (citing cases). The burden of demonstrating the desirability of transfer will lie "with the moving party, and in considering the motion for transfer, a court should not disturb a plaintiff's choice of forum `unless the defendants make a clear and convincing showing that the balance of convenience favors defendants' choice." Id. (quoting Hubbell Inc. v. Pass & Seymore, Inc., 883 F.Supp. 955, 962 (S.D.N.Y.1995)). Ultimately, "motions for transfer lie within the broad discretion of the district court and are determined upon notions of convenience and fairness on a caseby-case basis." In re Cuyahoga Equipment Corp., 980 F.2d 110, 117 (2d Cir.1992) (internal citations omitted). *3 While there is "no per se rule requiring or presumptively favoring the transfer of a securitiesfraud action to the district where the issuer is headquartered," such transfers to the issuer's home district are routine "as a practical matter." In re Hanger Orthopedic Group, Inc. Sec. Litig., 418 F.Supp.2d 164, 2006 WL 466485, at *3 (E.D.N.Y. Feb. 28, 2006 (collecting cases). Although the plaintiffs in the four Georgia actions voluntarily dismissed those cases in the days following the filing of the instant motion in this action, courts have also noted that "[t]ransfer seems especially appropriate where, as here, there are previously filed actions pending in the defendants' home

district." Langley Partners, L.P. v. Tripath Tech., Inc., 2005 WL 2482527 at *2 (S.D.N.Y. Oct. 6, 2005) (citing Berman v. Informix Corp., 30 F.Supp.2d 653 (S.D.N.Y.1998) and MBCP Peerlogic, L.L.C. v. Critical Path, Inc., 2002 WL 31729626, at *2 (S.D.N.Y. Dec. 5, 2002).) Here, application of the relevant factors reveals that defendants have met their burden to transfer this action under § 1404(a). Lead plaintiffs' choice of forum A plaintiff's choice of forum "is generally entitled to considerable weight and should not be disturbed unless the balance of the factors is strongly in favor of the defendant." Berman v. Informix Corp., 30 F.Supp.2d 653, 659 (S.D.N.Y.1998); see also Goggins v. Alliance Capital Management, L.P., 279 F.Supp.2d 228, 232 (S.D.N.Y.2003) (plaintiff's forum choice "is generally accorded more deference" in circumstances where "there is a material connection or significant contact between the forum state and the underlying events allegedly underlying the claim"). However, "[w]hile it is axiomatic that a plaintiff's choice of forum is entitled to great consideration, the adage has little weight in stockholder class actions." Shulof v. Westinghouse Elec. Corp., 402 F.Supp. 1262, 1263 (S.D.N.Y.1975); see also Lewis v.. C.R.I., Inc., 2003 WL 1900859, at *5 (S.D.N.Y. Apr. 17, 2003) (collecting cases, and noting that "cases interpreting section 1404(a) have found that representative plaintiffs ... are entitled to less deference than other plaintiffs."); Eichenholtz v. Brennan, 677 F.Supp. 198, 202 (S.D.N.Y.1988) (in a class action under federal securities laws there will be "numerous potential plaintiffs, each possibly able to make a showing that a particular forum is best suited for the adjudication of the class's claim" and thus less deference to forum choice is appropriate). Thus, in light of the nature of this action, lead plaintiffs' preference for this forum will be accorded only moderate weight, and the below factors will rise in relative significance. Goggins, 279 F.Supp.2d at 232.

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Case 4:07-cv-04972-CW Document 1-15 Not Reported in F.Supp.2d Not Reported in F.Supp.2d, 2006 WL 851708 (S.D.N.Y.) (Cite as: Not Reported in F.Supp.2d)

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Locus of operative facts In securities fraud actions, "[m]isrepresentations and omissions are deemed to `occur' in the district where they are transmitted or withheld, not where they are received." In re Nematron Corp. Sec. Litig., 30 F.Supp.2d 397, 404 (S.D.N.Y.1998) (quoting Purcell Graham, Inc. v. National Bank of Detroit, 1994 WL 584550, at *4 (S .D.N.Y. Oct. 24, 1994). As defendants point out, AtheroGenics headquarters in Alpharetta, Georgia is at the factual center of this case, and the locus of all relevant decisionmaking. At issue here is the conduct of the defendant corporation and the individual defendants with respect to the disclosures made in the fall of 2004 about the prospects of the new atherosclerosis drug; the press releases and public filings relating to those clinical trials at issue were prepared in Alpharetta. (Declaration of Mark P. Colonnese ("Colonnese Decl.") ¶ 12.) *4 While the CART-2 trial itself took place in Canada (Berens Decl., Exs. B, C), and the Phase III ARISE trial was to be conducted at various locations in North America, the United Kingdom, and South Africa (Berens Decl., Ex. E), the results of the trials were reported to executives and scientists employed by AtheroGenics at its corporate headquarters in Georgia. (Colonnese Decl. ¶ 11.) Furthermore, the decision to conduct the interim analysis itself was made in Alpharetta by the Executive Committee of ArtheroGenics. (Supplemental Declaration of Mark. P. Colonnese ("Supp. Colonnese Decl.") ¶ 9.) Aside from the sale and purchase of Atherogenics stock by putative class members, the dissemination of the press releases, and two study-related New York FN5 appearances by defendant CEO Medford, there are no facts tying this action here that would warrant ignoring Georgia's "intimate connection to the events underpinning this case" and its status as the locus of the alleged fraud. In re Nematron, 30 F.Supp. at 404; see also Ravenwoods Invest. Co., L.P. v. Bishop Capital Corp., 2005 WL 236440, at *6 (S.D.N.Y. Feb. 1, 2005) ("The trading and holding of stock in New York is not, however, a significant contact with the operative facts of this

action."). FN5. On September 28, 2004, Russell Medford, AtheroGenics' CEO, appeared at CNBC's studios in midtown Manhattan for a taping of "Morning Call" regarding the announcement of the Phase IIb interim findings; the same day, he gave a presentation on the results at Grand Hyatt in New York City for the UBS Global Life Sciences Conference. (Berens Decl., Exs. H, J.) On December 1, 2004, Defendant Medford made an oral presentation on the Phase III ARISE study at the Lazard Life Sciences Conference at the Mandarin Oriental Hotel in New York City. (Compl. ¶ 27; Berens Decl., Ex. L .) Convenience of the parties and witnesses All of the individual defendants in this matter are located in the Northern District of Georgia (Colonnese Decl. ¶¶ 5-9). Defendants have also identified by name at least five potential non-party witnesses who are located in the Atlanta area, and have pointed to eight other potential witnesses in the Northern District who were employed by or on the board of defendant at the requisite time. (Supp. Colonnese Decl. ¶¶ 4.) "The convenience of nonparty witnesses is usually the most important factor to consider in deciding whether to depart from the plaintiff's choice of forum." In re Hanger Orthopedic Group, Inc. Sec. Litig., 2006 WL 466485, at *3. Few witnesses with knowledge probative of the alleged fraud are located in New FN6 York, and the three potential witnesses involved in the examination of the drug in Canada and Cleveland (Drs. Tardif, Topol, and Nissan) are a flight's distance from both New York City and Atlanta. See, e.g., Canadian Kennel Club v. Continental Kennel Club, 1997 WL 361991, at *3-4, n. 3 (S.D .N.Y. June 30, 1997) (finding that Canadian party witness "will have to travel to any trial of this action whether it is adjudicated in New York or Louisiana," that "either way, travel is required, and the difference in travel time [of flying to transferee district] does not significantly affect

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Case 4:07-cv-04972-CW Document 1-15 Not Reported in F.Supp.2d Not Reported in F.Supp.2d, 2006 WL 851708 (S.D.N.Y.) (Cite as: Not Reported in F.Supp.2d)

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the balance"); see also Wechsler v. Macke Int'l Trade, Inc., 1999 WL 1261251, at *6 (S.D.N.Y. Dec. 27, 1999) ("[T]he Court dismisses from consideration the convenience of witnesses who are located outside both the current and transferee forums."); Telecom Technical Services, Inc. v. ROLM Co., 1995 WL 874441 (E.D.Tex. Feb. 24, 1995) (noting that "it is well known that Atlanta is a major transportation hub of the Southeast" in transferring case to Northern District of Georgia in part because of convenience to counsel, parties, and witnesses). FN6. Lead plaintiffs do note the fact that defendant retains a New York City based public relations firm to disseminate its news releases, and that analysts from Wachovia Securities, Needham & Company, Morgan Stanley, and Fortis Bank issued reports on defendant during the class period; these companies on "information and belief ... [each maintain] a primary office in New York." (Berens Decl. at ¶ 2.) *5 While lead plaintiffs, despite their lack of FN7 residence in this district, have expressed a preference for litigating this matter in New York City, they also moved for appointment as lead plaintiff and lead counsel in the actions filed in Georgia. Although lead plaintiffs are under no burden on a motion to transfer, such efforts counsel against a finding of countervailing inconvenience regarding the resumption of litigation of this matter in that district. Considering the location of both party and non-party witnesses, "on balance, transfer would be significantly more convenient for the defendant and not substantially disadvantageous to plaintiff." Intria Corp. v. Intira Corp., 2000 WL 1745043, *4 (S.D.N.Y. Nov. 27, 2000) (noting disruption and expense likely incurred by California business if trial were to proceed in New York .) This factor, therefore, resolves in favor of transfer. FN7. One lead plaintiff resides in Brooklyn, New York (Michele Fortunato);

the others reside in Fairfax, Virginia (Andrew May), and Naples, Florida (Robert and Michele Billings). (Berens Decl. at ¶ 3.) Location of Documents and Ease of Access to Sources of Proof The location of documents in this matter also weighs in favor of transfer. Defendants have noted that correspondence among employees and executives, communications and documents related to the disputed press releases and financial reports, and the "voluminous documentation" surrounding the AGI-1067 clinical trials, among other documentation, are available in defendant's sole office in Alpharetta. "This factor is clearly an important consideration in motions to transfer pursuant to 28 U.S.C. § 1404(a)." Aquatic Amusement Assoc., Ltd. v. Walt Disney World Co., 734 F.Supp. 54, 58 (N.D.N.Y.1990). While "[o]f course the documents at issue here could be copied and shipped to New York ... this would impose an extra cost that is unnecessary." Nematron Corp., 30 F.Supp.2d at 404; see also Ravenwoods Invest. Co., L.P., 2005 WL 236440 at *6; Stillwater Mining, 2003 WL 21087953, at *5 (S.D.N.Y. May 12, 2003) ("While it is true that documents can be transported from state to state, for purposes of weighing transfer factors, the fact that the documents are all currently located in [the transferee district] favors transfer."). Accordingly, transfer will facilitate access to the relevant documents and records. Additional factors It is obvious that the federal courts in both this district and the Northern District of Georgia are familiar with the legal principles necessary to resolve this case. This factor, therefore, does not favor either party. The parties also concede, more or less, that the relative means of the parties does not strongly favor either lead plaintiffs or defendants. (See Lead Pls.' Mem. at 20-21.) In terms of relative docket congestion, the Court notes that, as of September 30, 2005, the number of

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Case 4:07-cv-04972-CW Document 1-15 Not Reported in F.Supp.2d Not Reported in F.Supp.2d, 2006 WL 851708 (S.D.N.Y.) (Cite as: Not Reported in F.Supp.2d)

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pending cases (civil and criminal) per active judge in the Southern District of New York was 689; in the Northern District of Georgia, it was 354. See Administrative Office of the United States Courts, Federal Court Management Statistics ("FCMS"), available at http:// www.uscourts.gov/cgi-bin/cmsd2005.pl (last visited Mar. 29, 2006); see In re Hanger Orthopedic Group, 2006 WL 466485, at *5 (transferring case to District of Maryland and citing the FCMS database for comparative caseloads while noting that "although docket congestion is insufficient on its own to support a transfer motion [it is] a proper factor for the Court to consider and is accorded some weight") (internal quotations omitted). Conclusion *6 Based on the foregoing analysis, the Court concludes that the balance of factors clearly favors transfer. Defendants' motion to transfer this action [21] to the Northern District of Georgia is granted, and the Clerk of the Court is directed to effectuate the transfer. SO ORDERED S.D.N.Y.,2006. In re AtheroGenics Securities Litigation Not Reported in F.Supp.2d, 2006 WL 851708 (S.D.N.Y.) END OF DOCUMENT

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2006 (the "Class Period"). In re Connetics S.D.N.Y.,2007. Only the Westlaw citation is currently available.In re CONNETICS SECURITIES LITIGATION No. 06 Civ. 11496(SWK). May 23, 2007. OPINION AND ORDER KRAM, J. *1 On February 14, 2007, lead plaintiff Oklahoma Teachers' Retirement System ("Oklahoma Teachers") filed its consolidated amended complaint (the "Complaint"), which charges that Connetics Corporation ("Connetics"), several of its former and current officers and directors (collectively, the "Connetics Defendants"), Ernst & Young LLP ("E & Y"), Alexander Yaroshinsky ("Yaroshinsky"), Victor Zak ("Zak"), and four underwriters (the "Underwriter Defendants") engaged in securities fraud. The Connetics Defendants now move the Court to transfer venue under 28 U .S.C. § 1404(a). For the reasons that follow, the Court grants that motion and transfers this case to the United States District Court for the Northern District of California. I. BACKGROUND On October 31 and November 2, 2006, two class action complaints were filed in this District, alleging that Connetics and several of its officers and directors committed securities fraud. In an Opinion and Order dated December 14, 2006, the Court consolidated those two actions under the above caption, appointed Oklahoma Teachers lead plaintiff, and named Bernstein Litowitz Berger & Grossmann LLP lead counsel. Oklahoma Teachers is a government-sponsored retirement plan that resides in Oklahoma and manages assets for employees of Oklahoma educational institutions. On February 14, 2007, Oklahoma Teachers filed the Complaint on behalf of a putative nationwide class of individuals who purchased Connetics securities between January 27, 2004, and July 9, The Complaint identifies various institutional and individual defendants. Connetics is a specialty pharmaceuticals company incorporated in Delaware, which focuses on the development of products for the dermatology market. At all relevant times, Connetics maintained its corporate headquarters in the Northern District of California, where nearly all of the Connetics Defendants also FN1 worked and continue to reside. E & Y served as Connetics' outside auditor from its offices in Northern California. Yaroshinsky is the former Vice President of Biostatistics and Clinical Operations at Connetics and currently resides in California. Zak is a resident of Newton, Massachusetts who was employed in Connecticut during the Class Period. The Underwriter Defendants are: CIBC WorldMarkets Corp. ("CIBC"), which maintains its principal place of business in New York City; Wachovia Securities International Limited, whose principal place of business is in Richmond, Virginia; KBC Financial Products USA, which holds its principal place of business in New York City; and DGAB London, whose principal place of business is in London, England. FN1. Of the thirteen former or current officers and directors named as defendants in the Complaint, just two reside outside California. Specifically, Carl B. Feldbaum, a former Connetics director, resides in Idaho, while John C. Kane, who is also a former Connetics director, resides in Georgia. The Complaint avers three basic securities fraud schemes. First, it alleges that the defendants misrepresented the safety and likelihood of Food and Drug Administration ("FDA") approval of a developmental-stage acne product called Velac Gel ("Velac"), which the defendants knew had caused a high incidence of cancer in the mice on which it was tested. Second, the Complaint charges that the

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defendants caused Connetics to issue materially false and misleading financial statements, predicated in part on revenue numbers that had FN2 been inflated through "channel-stuffing." Third, the Complaint accuses Yaroshinsky and Zak of using insider knowledge about the pending nonapproval of Velac to profit through insider sales of FN3 Connetics securities. FN2. Channel-stuffing is a deceptive business practice designed to inflate a company's sales and earnings figures. The company accomplishes this inflation by deliberately sending retailers along its distribution channel more products than they are able to sell. These retailers eventually send the excess products, in lieu of cash, back to the company, which must readjust its accounts receivable and ultimately its bottom line. FN3. These insider-trading allegations are also the subject of a Securities and Exchange Commission ("SEC") enforcement action currently pending in this District. See Sec. & Exch. Comm. v. Yaroshinsky, 06 Civ. 2401(RCC). *2 Before answering these allegations on the merits, the Connetics Defendants filed the instant motion to transfer venue to the Northern District of California. The motion is supported by Yaroshinsky and E & Y. II. DISCUSSION A district court may transfer a civil action to any other district where the action might have been brought "[f]or the convenience of the parties and witnesses, in the interest of justice ." 28 U.S.C. § 1404(a). In determining the propriety of a motion to transfer venue, a district court must conduct a twopart inquiry. First, the district court must decide whether the action "might have been brought" in the transferee district. Id.; Fuji Photo Film Co. v. Lexar Media, Inc., 415 F.Supp.2d 370, 373 (S.D .N.Y.2006) (citation and internal quotation marks omitted). Second, the district court must analyze

the extent to which the interest of justice and the convenience of the litigation warrant a transfer of venue. Fuji Photo Film Co., 415 F.Supp.2d at 373; In re Nematron Corp. Sec. Litig., 30 F.Supp.2d 397, 400 (S.D.N.Y.1998) (citation omitted). This second, case-specific analysis generally embraces the consideration of several factors, including: (1) the convenience of witnesses, (2) the convenience of the parties, (3) the location of relevant documents and the relative ease of access to sources of proof, (4) the locus of operative facts, (5) the availability of process to compel the attendance of unwilling witnesses, (6) the relative means of the parties, (7) the forum's familiarity with the governing law, (8) the weight accorded the plaintiff's choice of forum, and (9) trial efficiency and the interest of justice, based on the totality of the circumstances. Fuji Photo Film Co., 415 F.Supp.2d at 373 (citation omitted); In re Nematron, 30 F.Supp.2d at 400 (citations omitted). A district court should grant a motion for a transfer of venue only if the moving party has made a "clear and convincing" showing that transfer is appropriate in light of these and any other relevant factors. In re Nematron, 30 F.Supp.2d at 400 (citations and internal quotation marks omitted). Here, the parties do not dispute-nor could they-that the Connetics Defendants have satisfied the first prong of the venue inquiry. The Securities Exchange Act of 1934 (the "Exchange Act") provides that venue is proper in any district "wherein the defendant is found or is an inhabitant or transacts business...." 15 U.S.C. § 78aa. The Northern District of California meets these criteria because many of the defendants reside and transacted business therein. Therefore, the Connetics Defendants' motion to transfer venue turns on the nine factors mentioned above. As the following analysis demonstrates, the Connetics Defendants have shown that these factors weigh convincingly in favor of transfer. 1. The Convenience of Witnesses The "[c]onvenience of both the party and non-party

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witnesses is probably the single-most important factor in the analysis of whether transfer should be granted." Berman v. Informix Corp., 30 F.Supp.2d 653, 657 (S.D.N.Y.1998) (citation and internal quotation marks omitted). In evaluating this factor, the Court must consider "the materiality, nature, and quality of each witness, not merely the number of witnesses in each district." Royal & Sunalliance v. British Airways, 167 F.Supp.2d 573, 577 (S.D.N.Y.2001) (citation omitted). Here, the Connetics Defendants have made a convincing showing, by way of supplemental affidavits submitted to the Court, that the convenience of potential witnesses favors transfer. See Orb Factory, Ltd. v. Design Science Toys, Ltd., 6 F.Supp.2d 203, 208 (S.D.N.Y.1998) (stating that moving party "must support the transfer application with an affidavit containing detailed factual statements ..., including the potential principal witnesses expected to be called and a general statement of the substance of their testimony") (citation and internal quotation marks omitted). *3 In cases where, as here, the plaintiff alleges securities fraud, the key witnesses are frequently "officers and employees of [the issuer] who participated in drafting or distributing allegedly false and misleading statements." In re Stillwater Co. Mining Sec. Litig., No. 02 Civ. 2806(DC), 2003 WL 21087953, at *4 (S.D.N.Y. May 12, 2003); accord In re Nematron, 30 F.Supp.2d at 402 ("It is well known that trials in securities class actions focus almost entirely on the defendants' conduct."). The Connetics Defendants have identified dozens of such potential witnesses who were involved in the preparation and dissemination of Connetics' financial statements. (Wiggans Decl. ¶ 8-9, Mar. 16, 2007; Higgins ¶¶ 5-7, Mar. 16, 2007.) Furthermore, the Connetics Defendants have specified eight E & Y employees who possess information about Connetics' quarterly and annual audits, as well as its financial statements. (Morrison Decl. ¶¶ 4-7, Mar. 5, 2007.) The Connetics Defendants have also singled out persons with information regarding its sales practices and alleged channel-stuffing (Wiggans Decl. ¶ 13) and others with information concerning its application to the

FDA for permission to market Velac (Wiggans Decl. ¶ 15; Krochmal Decl. ¶ 5, Mar. 16, 2007). Nearly all of these potential witnesses worked in Northern California on matters related to this litigation and continue to reside there. Lead plaintiff Oklahoma Teachers has attempted to rebut the Connetics Defendants' substantial showing of witness convenience by pointing to other potential witnesses who do not reside in Northern California. Specifically, Oklahoma Teachers points to: (1) FDA employees who work and reside in or around the Washington, D.C. area; (2) toxicologists located around the country who were involved in Velac testing; (3) Connetics' primary customers, which are located in Pennsylvania, Ohio, and Florida; (4) securities analysts who covered Connetics, the majority of whom are not located in California; and (5) Zak, who is a Massachusetts resident. Though some of these individuals-in particular, the FDA employees in and around D.C. and the toxicology experts located throughout the nation-may possess information concerning what the defendants knew and when they knew it, most of them have no ties to this District. Thus, most of the potential witnesses cited by Oklahoma Teachers will be inconvenienced regardless of whether this litigation proceeds here or in the Northern District of California, a consideration which weighs in the Connetics Defendants' favor. See In re Hanger Orthopedic Group, Inc. Sec. Litig., 418 F.Supp.2d 164, 168-69 (E.D.N.Y.2006) (holding that convenience of witnesses tipped in defendants' favor where "plaintiffs' non-party witnesses will be inconvenienced whether the case proceeds in New York or Maryland"). The only potential witnesses with alleged ties to this District are analysts working with CIBC, The Buckingham Research Group, and C .E. Unterberg, Towbin ("C.E.Unterberg"). Oklahoma Teachers has submitted several reports prepared by these analysts, whose names are accompanied by phone numbers beginning with a "212" area code. Although this may be evidence that the analysts in question work at offices in New York, it is not

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proof that they reside in this District. In addition, both CIBC and C.E. Unterberg maintain offices in California, from which these companies' analysts may have covered Connetics. In fact, Oklahoma Teachers' own submissions demonstrate that Connetics was covered by many analysts throughout the nation. (Pls.' Opp'n 8 n. 5, Mar. 30, 2007.) Given the relative import of the evidence that might be presented by potential analystwitnesses, and in light of these witnesses' unclear connections to this District, the analyst-witnesses do not significantly tip the venue inquiry in Oklahoma Teachers' favor. See Berman, 30 F.Supp.2d at 657 (discounting plaintiff's reliance on analyst-witnesses where plaintiff only assumed that analysts resided in New York because important brokerages had offices there, but many of brokerages in fact also had offices elsewhere and a number of analysts reported on company from locations outside New York). *4 In sum, the convenience of witnesses favors the transfer of this litigation to the Northern District of California. Most of the potentially significant witnesses identified by the parties worked and continue to reside therein. Although some witnesses will be inconvenienced wherever this case moves forward, scarcely any will be worse off if the case proceeds in the Northern District of California, and many will be better off. 2. The Convenience of the Parties In analyzing the convenience of the parties, "[t]he logical starting point is a consideration of [their] residence...." U .S. Fidelity and Guar. Co. v. Republic Drug Co., Inc., 800 F.Supp. 1076, 1080 (E.D.N.Y.1992). Here, the vast majority of the defendants-including nearly all of the former and current Connetics officers and directors named in the suit, Yaroshinsky, and E & Y-reside in California and have asserted that they would be inconvenienced by the prosecution of this suit in the Southern District of New York. Zak, who resides in Massachusetts, has not expressed any preference regarding the disposition of the instant motion for a transfer of venue, nor have the

Underwriter Defendants, three of which are headquartered in New York. On the other hand, lead plaintiff Oklahoma Teachers is a resident of Oklahoma and thus cannot claim that this District is the more convenient forum for it. In re Hanger, 418 F.Supp.2d at 169. Furthermore, Oklahoma Teachers purports to bring this action on behalf of a nationwide class of purchasers of Connetics securities, many of whom will not be New York residents. Since many class members will be inconvenienced regardless of whether the instant suit proceeds in this District or the Northern District of California, the plaintiffs' residence provides no support for keeping this suit in New York. See In re Collins & Aikman Corp. Sec. Litig., 438 F.Supp.2d 392, 396 (S.D.N.Y.2006); In re Hanger, 418 F.Supp.2d at 169; In re Nematron, 30 F.Supp.2d at 403. Given the defendants' strong ties to Northern California and the plaintiffs' weak connections to this District, the convenience of parties tips decidedly in favor of the Connetics Defendants' motion to transfer venue. In re Collins & Aikman, 438 F.Supp.2d at 396; In re Hanger, 418 F.Supp.2d at 169. 3. The Location of Relevant Documents and Relevant Ease of Access to Sources of Proof Although the location of relevant documents may be of less significance in light of modern copying and reproduction technologies, see In re Hanger, 418 F.Supp.2d at 170, it nonetheless retains at least some relevance to the venue inquiry. In re Collins & Aikman, 438 F.Supp.2d at 396-97; Ravenwoods Inv. Co. v. Bishop Capital Corp., No. 04 Civ. 9266(KMK), 2005 WL 236440, at *6 (S.D.N.Y. Feb. 1, 2005); In re Stillwater, 2003 WL 21087953, at *4. Most of the documents related to Connetics' allegedly misleading financial statements, including its financial records, press releases, and internal company reports and communications, were prepared in the Northern District of California and are maintained therein. (Wiggans Decl. ¶ 8; Higgins Decl. ¶ 7.) Likewise, most of the regulatory, pre-

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clinical, and product-development documents pertaining to Velac are located in the Northern District of California. (Wiggans Decl. ¶ 14; Krochmal Decl. ¶ 6.) Furthermore, additional evidence stemming from outside audits of Connetics is located at E & Y's offices in the Northern District of California. (Morrison Decl. ¶ 10.) *5 Nevertheless, lead plaintiff Oklahoma Teachers argues that substantial portions of the documents located outside New York will be present in this District in connection with the SEC's enforcement action against Yaroshinsky and Zak. See Sec. & Exch. Comm. v. Yaroshinsky, 06 Civ. 2401(RCC). Although some documents relevant to this litigation may be available in this District, Oklahoma Teachers' argument misses the mark. The SEC enforcement action involves only insider-trading allegations. Those allegations overlap with the insider-trading allegations made in the Complaint, but they do not embrace the other claims at issue here, including those that pertain to alleged misrepresentations in Connetics' financial statements and reports on Velac. In fact, given the differences in the subject matter of the SEC enforcement action and the instant action, Judge Casey previously declined to accept these actions as related. See Yaroshinsky, 06 Civ. 2401(RCC), Dkt. # 38. Therefore, while the presence in this District of documents relating to the Complaint's insidertrading allegations may partially reduce the inconvenience of proceeding here, it by no means eliminates the advantage of proceeding in the Northern District of California, where documents relating to all of the Complaint's claims will be found. In summary, because the majority of the documents pertaining to the allegations of the Complaint are located in the Northern District of California, that forum is at least a marginally better forum in which to proceed. See In re Collins & Aikman, 438 F.Supp.2d at 396-97 (district where "financial statements, presses releases, earnings statements, and SEC filings" were prepared and located was "at least marginally more convenient"); In re

Nematron, 30 F.Supp.2d at 404 ("Of course the documents at issue here could be copied and shipped to New York. Yet this would impose an extra cost that is unnecessary ...."); accord In re Stillwater, 2003 WL 21087953, at *5 ("While it is true that documents can be transported from state to state, for purposes of weighing transfer factors, the fact that the documents are all currently located in Montana favors transfer."). 4. The Locus of Operative Facts Courts in this District have held that misrepresentations or omissions occur "where the misrepresentations are issued or the truth is withheld, not where the statements at issue are received." In re Collins & Aikman, 438 F.Supp.2d at 397 (quoting Adair v. Microfield Graphics, Inc., 00 Civ. 0629(MBM), 2000 WL 1716340, at *2 (S.D.N.Y. Nov. 16, 2000)). The allegedly misleading financial statements, press releases, and SEC filings enumerated in the Complaint were prepared and issued from Connetics' headquarters in the Northern District of California (Wiggans Decl. ¶¶ 8-10; Higgins Decl. ¶ 7), and are therefore deemed to have occurred therein. Since these alleged misrepr