BONNETT FAIRBOURN FRIEDMAN & BALINT, PC

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Notice of Motion and Motion of T3 Trading Case No. 2:20-cv-01797-PHX-SPL

Andrew S. Friedman (State Bar No. 005425) Van Bunch (State Bar No. 009630) William F. King (State Bar No. 023941) BONNETT FAIRBOURN FRIEDMAN & BALINT, PC 2325 E. Camelback Rd. Ste. 300 Phoenix, AZ 85016 Telephone: (602) 274-1100 Facsimile: (602) 274-1199 Email: [email protected]

[email protected] [email protected]

Counsel for Lead Plaintiff Movant and Proposed Liaison Counsel for the Class LOWEY DANNENBERG, P.C. Barbara Hart David Harrison Andrea Farah Christina McPhaul 44 South Broadway, Suite 1100 White Plains, NY 10601 Telephone: 914-997-0500 Email: [email protected] [email protected] [email protected] [email protected] Counsel for Lead Plaintiff Movant and Proposed Lead Counsel for the Class [Additional counsel on signature page.]

UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA

Daniel Borteanu, Individually and on Behalf of All Others Similarly Situated,

Plaintiff,

v.

Nikola Corporation, Trevor R. Milton, Steve Girsky, Steve Shindler; Mark A. Russell, and Kim J. Brady,

Defendants.

No. 2:20-cv-01797-PHX-SPL CLASS ACTION LEAD PLAINTIFF MOVANT’S

NOTICE OF MOTION AND MOTION FOR CONSOLIDATION AND FOR APPOINTMENT OF T3

TRADING GROUP LLC’S LEAD PLAINTIFF AND APPROVAL OF

SELECTION OF LEAD COUNSEL ORAL ARGUMENT REQUESTED

Case 2:20-cv-02168-DLR Document 11 Filed 11/16/20 of 23

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John L. Wojichowski, Individually and on Behalf of All Others Similarly Situated,

Plaintiff, v.

Nikola Corporation, Trevor Milton, Mark A. Russell, and Kim J. Brady,

Defendants.

No. 2:20-cv-01819-DLR CLASS ACTION JURY TRIAL DEMANDED

Albert Holzmacher, Michael Wood, and Tate Wood, on Behalf of Themselves and All Others Similarly Situated,

Plaintiffs,

v. Nikola Corporation, Trevor R. Milton, Mark A. Russell, Kim J. Brady, Stephen J. Girsky, and Steven M. Shindler,

Defendants.

No. 2:20-cv-02123-JJT CLASS ACTION DEMAND FOR JURY TRIAL

William Eves, Individually and on Behalf of All Others Similarly Situated,

Plaintiff,

v.

Nikola Corporation, Trevor R. Milton, Mark A. Russell, and Kim Brady,

Defendants.

No. 2:20-cv-02168-DLR CLASS ACTION JURY TRIAL DEMANDED


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Notice of Motion and Motion of T3 Trading Case No. 2:20-cv-01797-PHX-SPL i

TABLE OF CONTENTS

NOTICE OF MOTION AND MOTION ............................................................................... 1

MEMORANDUM OF POINTS AND AUTHORITIES ....................................................... 1

PRELIMINARY STATEMENT ........................................................................................... 2

THE RELATED ACTIONS .................................................................................................. 2

STATEMENT OF FACTS .................................................................................................... 4

ARGUMENT ......................................................................................................................... 7

The Related Actions Should Be Consolidated For Pretrial Proceedings Because Doing So Is In The Interest Of Judicial Economy And Posses No Risk Of Delay Or Prejudice...................................... 8

T3 Trading Should Be Appointed Lead Plaintiff ................................................ 9

1. A Lead Plaintiff Should Be Appointed For Claims Brought As A Class Action ....................................................................... 9

2. T3 Trading Timely Filed a Motion to Be Appointed Lead Plaintiff .......................................................................... 10

3. T3 Trading Has the Requisite Largest Financial Interest in the Relief Sought by the Class .............................................. 11

4. T3 Trading Otherwise Satisfies Rule 23 ................................................ 12

The court should approve t3 trading’s choice of counsel ................................ 14

1. The Court Should Appoint Lowey as Lead Counsel for the Class ..... 14

2. The Court Should Appoint Bonnett as Liaison Class Counsel ................ 15

CONCLUSION .................................................................................................................... 16


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Notice of Motion and Motion of T3 Trading Case No. 2:20-cv-01797-PHX-SPL ii

TABLE OF AUTHORITIES

Page(s)

Cases

Banerjee v. Avinger, Inc.,

No. 17-cv-03400-CW, 2017 WL 4552063 (N.D. Cal. Oct. 11, 2017) ............................ 11

Borenstein v. Finova Grp. Inc.,

No. CIV. 00-1010PHXEHC, 2000 WL 34524743 (D. Ariz. Aug. 30, 2000) ................... 8

Burnett v. Rowzee,

No. 07-641, 2007 WL 4191991 (C.D. Cal. 2007) ............................................................. 8

Carter v. Cole Holdings Corp.,

No. CV-13-00629-PHX-ROS, 2013 WL 12374922 (D. Ariz. Oct. 22, 2013) .................. 8

In re Cavanaugh,

306 F.3d 726 (9th Cir. 2002) ............................................................................... 11, 12, 13

Deering v. Galena Biopharma, Inc.,

No. 3:14-CV-00367-SI, 2014 WL 4954398 (D. Or. Oct. 3, 2014).................................. 12

Hardy v. MabVax Therapeutics Holdings,

No. 18-CV-01160-BAS-NLS, 2018 WL 4252345 (S.D. Cal. Sept. 6, 2018) .................. 12

Hessefort v. Super Micro Computer, Inc.,

317 F. Supp. 3d 1056 (N.D. Cal. 2018) ............................................................................. 8

Investors Research Co. v. U.S. Dist. Court for Cent. Dist. Of Cal.,

877 F.2d 777 (9th Cir. 1989) ............................................................................................. 8

Lax v. First Merchants Acceptance Corp., No. 97 C 2715,

1997 U.S. Dist. LEXIS 12432 (N.D. Ill. Aug. 6, 1997) .................................................. 11

Lomingkit v. Apollo Educ. Grp. Inc.,

No. CV-16-00689-PHX-DLR, 2016 WL 3345514 (D. Ariz. June 16, 2016) ........... 13, 14

Miami Police Relief & Pension Fund v. Fusion-io, Inc.,

No. 13-cv-05368-LHK, 2014 WL 2604991 (N.D. Cal. June 10, 2014) .......................... 12

Norfolk Cty. Ret. Sys. v. Cmty. Health Sys., Inc.,

877 F.3d 687 (6th Cir. 2017), cert. denied, 139 S. Ct. 310 (2018) .................................. 15


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Notice of Motion and Motion of T3 Trading Case No. 2:20-cv-01797-PHX-SPL iii

In re Olsten Corporation Securities Litigation,

3 F. Supp. 2d 286 (E.D.N.Y. 1998) ................................................................................. 11

Teamsters Local 617 Pension & Welfare Funds v. Apollo Grp., Inc.,

No. 2:06-CV-2674-PHX-RCB, 2007 WL 2692217 (D. Ariz. Sept. 11, 2007) ............... 11

Tsirekidze v. Syntax-Brillian Corp.,

No. CV-07-2204-PHX-FJM, 2008 WL 942273 (D. Ariz. Apr. 7, 2008) ........................ 14

Vancouver Alumni Asset Holding, Inc. v. Daimler AG,

No. 16-02942-SJO, 2016 WL 10646304 (C.D. Cal. July 20, 2016) ............................... 11

Wenderhold v. Cylink Corp.,

188 F.R.D. 577 (N.D. Cal. 1999) ....................................................................................... 8

Statutes

15 U.S.C. §78u-4(a)(3) ................................................................................................. passim

Other Authorities

Manual for Complex Litigation, 4th, §10.221 ..................................................................... 15


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Notice of Motion and Motion of T3 Trading Case No. 2:20-cv-01797-PHX-SPL 1

NOTICE OF MOTION AND MOTION

TO THE COURT AND ALL PARTIES AND THEIR ATTORNEYS OF RECORD:

PLEASE TAKE NOTICE that on a date and time as may be set by the Court, at the

United States District Court for the District of Arizona, T3 Trading Group LLC (“T3 Trading”

or “Movant”), by and through the undersigned counsel, hereby respectfully moves this Court

pursuant to Federal Rules of Civil Procedure 23 and 42(a), Local Rule 42.1, and Section

21D(a)(3) of the Securities Exchange Act of 1934 (the “Exchange Act”), 15 U.S.C. § 78u-4(a)(3),

as amended by the Private Securities Litigation Reform Act of 1995 (the “PSLRA”), for an

Order: (i) consolidating the Related Actions (as defined below); (ii) appointing T3 Trading as

Lead Plaintiff in the above-captioned actions; (iii) approving its choice of Lowey Dannenberg,

P.C. (“Lowey”) to serve as Lead Counsel and Bonnett Fairbourn Friedman & Balint, PC

(“Bonnett”) to serve as Liaison Counsel; and (iv) granting such other and further relief as the

Court may deem just and proper.

This motion is based on this notice and motion, the incorporated memorandum of

points and authorities, the concurrently filed Declaration of David C. Harrison (“Harrison

Decl.”), as well as the accompanying [Proposed] Order.

MEMORANDUM OF POINTS AND AUTHORITIES

Movant T3 Trading respectfully requests that this Court enter an Order: (1)

consolidating the Related Actions (as defined below); (ii) appointing T3 Trading as the Lead

Plaintiff on behalf of all persons and entities other than the defendants in the above-captioned

actions (“Defendants”) who purchased or otherwise acquired securities of Nikola Corporation

(“Nikola” or the “Company”) during the Class Period, as described below; (iii) approving

proposed Lead Plaintiff’s selection of Lowey as Lead Counsel and Bonnett to serve as Liaison

Counsel; and (iv) granting such other relief as the Court may deem just and proper.


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PRELIMINARY STATEMENT

This is a class action commenced on behalf of a Class seeking to recover damages for

violations of the federal securities laws by Defendants Nikola and certain current and former

senior executives, Trevor Milton (“Milton”); Mark A. Russell (“Russell”); Steve Girsky

(“Girsky”), Steve Shindler (“Shindler”), and Kim J. Brady (“Brady”) under Sections 10(b), 14(a),

and 20(a) of the Securities Exchange Act of 1934, 15 U.S.C. §§78j(b) and 78t(a), and SEC Rule

10b-5.

Pursuant to the PLSRA, the Court should consolidate related actions before appointing

a lead plaintiff. See 15 U.S.C. § 78u-4(a)(3)(B)(ii). Consolidation under Rule 42(a) is also

warranted where, as here, the related actions involve common legal and factual questions. Here,

the Related Actions present essentially identical factual and legal issues, assert the same legal

claims, and allege nearly identical class periods and defendants.

Furthermore, under the PSLRA, the court must appoint as lead plaintiff the movant who

possesses the largest financial interest in the outcome of the action and who satisfies the

requirements of Rule 23 of the Federal Rules of Civil Procedure. See 15 U.S.C. § 78u-

4(a)(3)(B)(iii)(I). T3 Trading has the largest financial interest in the relief sought in this action,

as illustrated below. T3 Trading also satisfies the requirements of Rule 23 of the Federal Rules

of Civil Procedure because it is an adequate representative with claims typical of the other

members of the Class. Accordingly, T3 Trading respectfully submits that it should be appointed

Lead Plaintiff, and that its selection of experienced class action counsel, the Lowey firm, as Lead

Counsel for the Class, and Bonnett as Liaison Counsel, should be approved. See 15 U.S.C. §

78u-4(a)(3)(B)(v).

THE RELATED ACTIONS

On September 15, 2020, plaintiff Daniel Borteanu filed a securities class action in this

District, styled Borteanu v. Nikola Corporation et al., No. 20-cv-01797-SPL (D. Ariz.) (the

“Borteanu” Action), on behalf of Nikola investors during the Class Period from March 3, 2020


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through September 15, 2020. On September 21, 2020, plaintiff Borteanu amended his

complaint, extending the alleged class period from March 3, 2020 through September 20, 2020)

(see id. ECF No. 5). The amended complaint alleges that the Defendants knowingly or recklessly

misrepresented material facts and/or omitted to state material facts necessary in order to make

the statements made, in light of the circumstances under which they were made, not misleading,

causing massive losses to investors when the truth emerged in September 2020. See id.,

Complaint, generally (ECF No. 5). Specifically, Defendants made false and/or misleading

statements and failed to disclose to investors that: (1) VectoIQ did not engage in proper due

diligence regarding its merger with Nikola; (2) Nikola grossly overstated its “in-house” design,

manufacturing, and testing capabilities; (3) Nikola’s claims (a) it had reduced the cost of

hydrogen production by approximately eighty percent compared to its peers and (b) that it was

already producing hydrogen on that basis were false; (4) Defendant Milton disseminated a “test”

video of the Company’s Nikola One truck that gave the false appearance of its semi-truck

cruising on a road at a high rate of speed, when the truck was actually being towed to the top

of a hill on a remote stretch of highway and was simply filmed rolling down the hill; (5), the

work experience and background of key Nikola employees, including Defendant Milton, had

been overstated and obfuscated; and (6) Nikola did not have five Tre trucks completed. See id.,

¶1 39. Defendants’ public statements were materially false and/or misleading at all relevant

times. See id.

Substantially similar securities class actions were subsequently filed in: (i) this District,

including: Wojichowski v. Nikola Corporation et al., No. 20-cv-01819 (D. Ariz. Sept. 17, 2020),

Holzmacher et al. v. Nikola Corporation et al., No. 20-cv-02123 (D. Ariz. Nov. 3, 2020) (the

“Holzmacher” Action), and Eves v. Nikola Corporation et al., No. 20-cv-02168 (D. Ariz. Nov. 10,

2020) (collectively referred to as the “Related Actions”); (ii) the United States District Court for

the Central District of California, including Douglas Malo v. Nikola Corporation et al., No. 20-cv-

1 All references to “¶ _” and “¶¶ __” are to the amended complaint filed in the Borteanu Action (ECF No. 5).


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02168 (C. D. Cal. Oct. 16, 2020)(the “Malo” Action); and (iii) the United States District Court

for the Eastern District of New York, including Salem v. Nikola Corporation et al., No. 20-cv-

04354 (E.D.N.Y. Sept. 16, 2020). While the Amended Complaint in the first-filed Borteanu

Action asserts a class period from March 3, 2020, through September 20, 2020, the more recent

complaint in the Holzmacher Action extends the close of the alleged Class Period through

October 15, 2020. In additional to asserting claims under Sections 10(b) and 20(a) of the

Exchange Act, the Holzmacher complaint asserts a claim under Section 14(a) of the Exchange

Act. All six complaints, including the complaint filed by plaintiff Borteanu in this Action are

annexed as Exhibits A through F to Harrison Decl.

Movant T3 Trading is filing a motion for consolidation and appointment as Lead

Plaintiff in the Related Actions and a motion for appointment as Lead Plaintiff in the cases

pending in the Eastern District of New York. Pursuant to a Stipulation, the parties in the Malo

Action have agreed to transfer the case from the Central District of California to this Court.

STATEMENT OF FACTS

Nikola is a start-up company that designs and manufacturers zero-emissions battery-

electric and hydrogen-electric vehicles, electric vehicle drivetrains, vehicle components, energy

storage systems, and hydrogen fueling station infrastructure. ¶ 8. Nikola entered the public

trading arena in early June 2020, by way of a reverse merger with a shell company, VectoIQ

Acquisition Corp. (“VectoIQ”), a transaction valued at $3.3 billion. Id. VectoIQ is a “special

purpose acquisition company,” commonly known as a “blank-check” company, that was

formed by Stephen Girsky, the former Vice-Chairman of General Motors, in order to

subsequently acquire an operating business – in this case, Nikola -- and take it public. ¶ 10.

Following the March 3, 2020 announcement of Nikola’s impending merger and the

public dissemination of allegedly material misleading information in VectoIQ’s SEC filings and

merger proxy statement, VectoIQ’s shares tripled in value from approximately $11 to $33 per


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share on June 3, 2020, when Nikola became a public company.2 ¶¶ 19-20. Further fueled by a

pattern of gross overstatements and fabrications made by the Company’s founder and former

Chairman, Defendant Milton, the price of Nikola share continued to skyrocket to as high as

$79 per share. ¶ 75.

On September 8, 2020, Nikola announced its most recent agreement in principal with

GM to partner on an electric pickup truck called the “Badger,” sending shares of both

companies sharply higher. As part of the announced deal, GM would receive $2 billion in

Nikola stock (an 11% stake in the Company) in return for supplying manufacturing the truck

using GM engineering and battery technology, despite Nikola’s prior claims of owning “game

changing” battery and fuel cell technology.3

However, on September 10, 2020, Hindenburg Research (“Hindenburg”) issued a report

exposing Nikola’s CEO’s representations as inflated, gross overstatements of the Company’s

current progress and management’s expertise and role in the design and manufacturing process.

¶ 40. For example, Hindenburg claimed that while Nikola purports to design key components

of its hydrogen fuel cells in-house, the Company appeared to simply be buying some

components off the shelf from third parties or licensing them privately. ¶ 41. Hindenburg

showed that in one promotional video that purported to demonstrate Nikola’s internal

development capabilities, the Company had concealed with masking tape the name of the third-

party vendor that actually made the component for Nikola. Id. In short, Nikola was shown to

2 Following the merger, VectoIQ shares traded under Nikola’s ticker symbol “NKLA.” 3 Even before then, the Company had already forged investor and partner relationships with industry leading companies. For example, in connection with the merger, Nikola raised $525 million in a private placement of preferred stock. Its cash position as of June 30 approached $700 million. In September 2019, CNH Industrial from Italy invested $250 million, taking a 7.11% stake, and is manufacturing the Tre semi-truck. Invesco has invested $100 million in cash and $150 million in technology to manufacture the Nikola 2 prototype hydrogen-powered truck in Germany; while Bosche invested over $100 million and is further developing a fuel cell system. Nikola has also received initial truck orders from Anheuser Busch (Budweiser) and the largest solid waste management company in the United States, Republic Services.


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be an integrator rather than originator of the key technologies it boasted would change the truck

industry. Id.

Hindenburg also reported that contrary to Milton’s representation that “[Nikola]

currently make[s] [its] own green H2 for under $4/kg,” the Company not produced hydrogen

at the reduced prices he touted (or any hydrogen at all for that matter). ¶ 38. Nor were the five

Nikola 2 prototypes trucks currently rolling off the assembly line in Germany as Milton

represented. ¶¶ 29, 34, 46, 53. Hindenburg also disclosed that Nikola had previously staged a

misleading “test” video called “Nikola One in Motion.” ¶¶ 40-43. The video appeared to show

one of the company’s semi-trucks cruising on a road at a high rate of speed. Id. However, the

video was actually an “elaborate ruse” in which Nikola had the truck towed to the top of a hill

on a remote stretch of road and simply filmed it rolling down the hill. Id. In addition, the report

revealed that Defendant Martin had placed his younger brother, Travis, formerly a paving

subcontractor in Hawaii, in charge of hydrogen production. ¶ 52. Likewise, Hindenburg

reported that Defendant Milton lacked the expertise to develop the software and other

technology he had taken credit for. ¶ 43.

Immediately after the publication of the Hindenburg Report, shares of Nikola fell

$10.24, or 24%, over the next two days, from $42.37 to close at $32.13 per share on September

11, 2020. ¶ 47. Nearly $1.5 billion in market value was wiped out. Id. While Nikola published

a lengthy press release denying the charges, the Company conceded that truck in the Nikola

One video was not functional in December 2016 and still wasn’t functional when the Nikola

One in Motion was released. Additionally, Nikola admitted that Nikola One did not have a

working hydrogen fuel cell or motors to drive the wheels, as Hindenburg reported. Separate

investigations by the DOJ and SEC followed. ¶ 48.

On September 15, 2020, Hindenburg published a rebuttal to Nikola’s response, accusing

the Company of failing to address 43 of the 53 questions that the Hindenburg report posed to

Nikola. ¶ 49. As to the few points that Nikola did respond, Hindenburg claimed that Nikola

tacitly admitted that it had not reduced the cost of hydrogen by 81% relative to peers, lacked


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in-house production capabilities, and exaggerated the status of Nikola Tre trucks’ production

and order book on Nikola’s future deliveries. ¶¶ 49-54. Additionally, Hindenburg highlighted

the inadequacy of Nikola’s response regarding claims of nepotism and value inflation. ¶ 52. In

response, Nikola stock fell 8%, over the trading day, to close at $32.83 per share on September

15, 2020, on unusually heavy trading volume. ¶ 55.

As a result of these damaging revelations, Nikola severed all ties with Milton. On

September 20, 2020, the Company announced that Milton had resigned as the Company’s

Executive Chairman. ¶ 56. On this news, the stock declined another $6.61, or 19%, from

$34.19 to close at $27.58. ¶ 57.

Nikola’s planned agreement with GM to collaborate on the Badger pick-up truck did

not close at the end of September, as expected. Instead, on October 15 and 16, 2020, Nikola’s

new Chief Executive Officer, Mark Russell, indicated in several interviews that Nikola’s

partnership with GM was in jeopardy. More specifically, Russell stated: “[w]e have the ability

and we have a base plan of doing it ourselves. If we have a partner, that just enables us to

consider going faster and helps reduce the risk. We’ve proven over the years that we are a

partnership company when those things are available to us.” Following Russell’s comments,

the price of Nikola’s shares fell another $3.8, or approximately 16%, from $23.30 to close at

$19.55 on October 16, 2020.

As a result of Defendants’ misstatements and omissions, and the precipitous decline in

the market value of Nikola’s securities, Movant T3 Trading and other Nikola class members

have suffered significant losses and damages. ¶ 58.

ARGUMENT

T3 Trading respectfully submits that the Related Actions should be consolidated because

they arise from the same facts and circumstances, and as such concern common legal and factual

issues, assert nearly identical legal claims against substantially the same defendants and entities.

Consolidation will serve judicial economy and preserve the Court’s and litigants’ time and

resources while posing no threat of delay or prejudice to the parties. Furthermore, T3 Trading


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should be appointed Lead Plaintiff for the consolidated action because it is the movant “most

capable of adequately representing the interests of class members.” 15 U.S.C. § 78u-4(a)(3)(B).

The PSLRA establishes a presumption that the “most adequate plaintiff” is the movant 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.” Id.

THE RELATED ACTIONS SHOULD BE CONSOLIDATED FOR PRETRIAL PROCEEDINGS BECAUSE DOING SO IS IN THE INTEREST OF JUDICIAL ECONOMY AND POSSES NO RISK OF DELAY OR PREJUDICE

The PSLRA requires the Court to consolidate the Related Actions before appointing a

lead plaintiff. See 15 U.S.C. §78u-4(a)(3)(B)(ii); Borenstein v. Finova Grp. Inc., No. CIV. 00-

1010PHXEHC, 2000 WL 34524743, at *3 (D. Ariz. Aug. 30, 2000). The Court has “broad

discretion under this rule to consolidate cases.” Investors Research Co. v. U.S. Dist. Court for Cent.

Dist. Of Cal., 877 F.2d 777, 777 (9th Cir. 1989). Consolidation pursuant to Rule 42(a) is proper

where, as here, multiple actions involve common legal and factual questions. Fed. R. Civ. P.

42(a). “In securities litigation, a court may consolidate actions “ ‘when the complaints are based

on the same public statements and reports . . . . and there are common questions of law and

fact and the defendants will not be prejudiced.”” Borenstein, 2000 WL 34524743, at *3 (citing

Wenderhold v. Cylink Corp., 188 F.R.D. 577, 583 (N.D. Cal. 1999)).

This Court “need only find one issue of fact or law in common in order to permit

consolidation.” Carter v. Cole Holdings Corp., No. CV-13-00629-PHX-ROS, 2013 WL 12374922,

at *2 (D. Ariz. Oct. 22, 2013) (citing Burnett v. Rowzee, 2007 WL 4191991, at *2 (C.D. Cal. 2007)).

“[C]lass action shareholder suits are particularly well suited to consolidation pursuant to Rule

42(a) because unification expedites pretrial proceedings, reduces case duplication, avoids the

need to contact parties and witnesses for multiple proceedings, and minimizes the expenditure

of time and money for all parties involved.” Hessefort v. Super Micro Computer, Inc., 317 F. Supp.

3d 1056, 1060 (N.D. Cal. 2018).


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Here, the Related Actions present essentially identical factual and legal issues, allege

identical claims in an identical class period, and name nearly identical defendants. They refer to

the same alleged misrepresentations and rely on the same provisions of the Exchange Act.4

Consolidation will prevent needless duplication and possible confusion, as well as potentially

inconsistent jury verdicts. There is also little or no risk of prejudice to the parties from

consolidation. Accordingly, the Related Actions should be consolidated.

In sum, consolidation of the Related Actions is in the best interest of judicial

convenience without the threat of causing any delay and/or confusion and is necessary to avoid

prejudice to all parties.

T3 TRADING SHOULD BE APPOINTED LEAD PLAINTIFF

1. A Lead Plaintiff Should Be Appointed For Claims Brought As A Class Action

Section 21D(a)(3)(A)(i) of the Exchange Act provides that, within 20 days after the date

on which a class action is filed:

the plaintiff or plaintiffs shall cause to be published, in a widely circulated national business-oriented publication or wire service, a notice advising members of the purported plaintiff class -- (I) of the pendency of the action, the claims asserted therein, and the purported class period; and (II) that, not later than 60 days after the date on which the notice is published, any member of the purported class may move the court to serve as lead plaintiff of the purported class.

15 U.S.C. § 78u-4(a)(3)(A)(i).

The first filed action was filed by plaintiff Borteanu on September 16, 2020. On or about

September 17, 2020, a public notice was published by Borteanu’s counsel concerning the filing

of the Borteanu Action on behalf of purchasers. Harrison Decl., Ex. G. The notice advised

members of the Class of the pendency of the action, the claims asserted, the Class Period, and

that anyone who wished to serve as lead plaintiff needed to make a motion to the Court no later

4 As noted above, the complaint in Holzmacher asserts that the misstatements in the merger proxy statement gives rise to claims under Sections 10(b) and (14(a) of the Exchange Act.


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than 60 days from the date of the notice. As a result, the notice satisfied all the requirements

of the PSLRA.5

Section 21D(a)(3)(B) of the Exchange Act directs the Court to consider any motions to

serve as lead plaintiff in response to any such notice by the later of (i) 90 days after the date of

publication, or (ii) as soon as practicable after the court decides any pending motion to

consolidate any actions asserting substantially the same claim or claims, and to presume that the

“most adequate plaintiff” to serve as lead plaintiff is the person or group of persons who:

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

15 U.S.C. § 78u-4(a)(3)(B).

That presumption may be rebutted where the otherwise 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.

15 U.S.C. § 78u-4(a)(3)(B)(iii)(II). The PSLRA also 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).

2. T3 Trading Timely Filed a Motion to Be Appointed Lead Plaintiff

The first requirement to being appointed a lead plaintiff is to have “either filed the

complaint or made a motion in response to a notice . . . .” 15 U.S.C. § 78u-4(a)(3)(B)(iii)(I)(aa).

Here, T3 Trading timely filed the instant motion for appointment as Lead Plaintiff and has

attached sworn Certification attesting that it is willing to serve as a representative for the Class

5 Additional notices were issued by counsel for plaintiffs in the subsequently filed actions as listed supra.


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and to provide testimony at deposition and trial, if necessary. See Harrison Decl., Ex. H. T3

Trading therefore satisfies the first prong of the lead plaintiff test.

3. T3 Trading Has the Requisite Largest Financial Interest in the Relief Sought by the Class

The second prerequisite to being appointed a lead plaintiff is that “in the determination

of the Court, [the plaintiff] has the largest financial interest in the relief sought by the Class” of

those persons moving to be appointed lead plaintiff. See 15 U.S.C. § 78u-4(a)(3)(B)(iii)(I)(bb).

To the best of its knowledge, T3 Trading has the largest financial interest of any Nikola investor

seeking to serve as Lead Plaintiff.

For claims arising under federal securities laws, courts frequently assess financial interest

based upon the four factors as initially articulated in the Northern District of Illinois in Lax v.

First Merchants Acceptance Corp., No. 97 C 2715, 1997 U.S. Dist. LEXIS 12432, at *18 (N.D. Ill.

Aug. 6, 1997) and adopted in In re Olsten Corporation Securities Litigation, 3 F. Supp. 2d 286, 295

(E.D.N.Y. 1998): (1) the number of shares purchased during the class period; (2) the number

of net shares purchased during the class period; (3) the total net funds expended during the

class period; and (4) the approximate losses suffered. Id. The PSLRA does not specify how to

assess which movant has the “largest financial interest in the relief sought by the class,” and the

Ninth Circuit has left it to the district courts to “select accounting methods that are both rational

and consistently applied” in making this determination. In re Cavanaugh, 306 F.3d 726, 730 n. 4

(9th Cir. 2002). The Lax factors have been adopted and routinely applied by courts in this

Circuit. See, e.g., Banerjee v. Avinger, Inc., No. 17-cv-03400-CW, 2017 WL 4552063, at *2 (N.D.

Cal. Oct. 11, 2017) (applying Lax-Olsten test); Vancouver Alumni Asset Holding, Inc. v. Daimler AG,

No. 16-02942-SJO, 2016 WL 10646304, at *2 (C.D. Cal. July 20, 2016) (same).

With respect to the final Lax factor, the amount of claimed losses, courts consider this

factor as most determinative in identifying the plaintiff with the largest financial loss. Teamsters

Local 617 Pension & Welfare Funds v. Apollo Grp., Inc., No. 2:06-CV-2674-PHX-RCB, 2007 WL

2692217, at *4 (D. Ariz. Sept. 11, 2007) (Observing that the Ninth Circuit has held that “the


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‘most capable’ plaintiff-and hence the lead plaintiff-is the one who has the greatest stake in the

outcome of the case, so long as he meets the requirements of Rule 23.”) (citing Cavanaugh, 306

F.3d at 729). In making this determination, it is well settled that where investors are given

sufficient notice of complaints alleging different class periods, courts generally utilize the longer,

more inclusive class period, in computing the largest financial interest of competing movants.

Deering v. Galena Biopharma, Inc., No. 3:14-CV-00367-SI, 2014 WL 4954398, at *10 (D. Or. Oct.

3, 2014) (“Courts have almost universally held that the longest, most

inclusive class period should be used to determine which lead plaintiff movant has the largest

financial interest in the relief sought by the class.”) (collecting cases); Miami Police Relief & Pension

Fund v. Fusion-io, Inc., No. 13-cv-05368-LHK, 2014 WL 2604991, at *1 n.3 (N.D. Cal. June 10,

2014) (“For purposes of appointing a lead plaintiff, the longest class period governs.”); Hardy v.

MabVax Therapeutics Holdings, No. 18-CV-01160-BAS-NLS, 2018 WL 4252345, at *4 (S.D. Cal.

Sept. 6, 2018)(“As a general matter, “courts usually . . . use the most inclusive class period and

select as lead plaintiff the movant with the largest financial interest under that period.”). While

the Class Periods in all actions, except the present one, commence on March 3, 2020, the

Holtzmacher Class Period is the longest, ending on October 15, 2020.

As set forth in detail in T3 Trading’s Loss Calculation Chart, T3 Trading purchased

9,388,906 shares of Nikola stock during the Class Period expending $380,077,095. See Harrison

Decl., Ex. I. T3 Trading had net purchases of 1,152,730 shares expending net funds of

$38,205,179. Further, T3 Trading calculates its losses at $15,079,494. See id. T3 Trading also

held 29,193 VectIQ shares as of the May 8, 2020 record date for voting on the Nikola merger.

T3 Trading believes it has the largest financial interest in the recovery sought in this litigation

compared to the interest of any other investor seeking appointment as Lead Plaintiff.

Accordingly, pursuant to the PSLRA, T3 Trading is presumed to be the “most adequate” lead

plaintiff and should be appointed as lead plaintiff. See 15 U.S.C. § 78u-4(a)(3)(B)(iii)(I)(bb).

4. T3 Trading Otherwise Satisfies Rule 23


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The lead plaintiff must also “otherwise satisf[y] the requirements of Rule 23 of the

Federal Rules of Civil Procedure.” 15 U.S.C. § 78u-4(a)(3)(B)(iii)(I)(cc). Rule 23(a) provides that

a party may serve as a class representative only if the following four requirements are satisfied:

(1) the class is so numerous the joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class.

Fed. R. Civ. P. 23(a).

Of the four prerequisites to class certification, only two – typicality and adequacy –

directly address the personal characteristics of the class representative. Consequently, in

deciding a motion to serve as lead plaintiff, the Court should focus its inquiry to the typicality

and adequacy prongs of Rule 23(a) and defer examination of the remaining requirements until

the lead plaintiff moves for class certification. Lomingkit v. Apollo Educ. Grp. Inc., No. CV-16-

00689-PHX-DLR, 2016 WL 3345514, at *2 (D. Ariz. June 16, 2016) (“Only factors three and

four—typicality and adequacy—are relevant to the selection of lead plaintiff.”) (citing In re

Cavanaugh, 306 F.3d at 730. As detailed below, T3 Trading satisfies both the typicality and

adequacy requirements of Rule 23, thereby justifying its appointment as Lead Plaintiff.

Under Rule 23(a)(3), the claims or defenses of the representative party must be typical

of those of the class. T3 Trading satisfies this requirement because its claims arise from the very

same course of conduct as the claims of the other members of the Class. T3 Trading and the

other members of the Class purchased Nikola stock at prices allegedly artificially inflated by

Defendants’ materially false and misleading statements and/or omissions relating to Nikola’s

claimed expertise, and the development and manufacture of electric hydrogen-fueled trucks and

pick-ups. T3 Trading and other investors also sustained losses when Nikola’s misconduct was

revealed to the market. Thus, T3 Trading’s claims are typical of those of the other members of

the Class because its claims and the claims of other Class members arise out of the same course


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of events based on the same legal theory. Lomingkit, 2016 WL 3345514, at *2. Rule 23(a)(4)

provides that the representative party must “fairly and adequately protect the interests of the

class.” The adequacy requirement is satisfied where: (1) class counsel is qualified, experienced,

and generally able to conduct the litigation; (2) there is no conflict between the proposed lead

plaintiff and the members of the class; and (3) the proposed lead plaintiff has a sufficient interest

in the outcome of the case to ensure vigorous advocacy. Tsirekidze v. Syntax-Brillian Corp., No.

CV-07-2204-PHX-FJM, 2008 WL 942273, at *2 (D. Ariz. Apr. 7, 2008).

Here, T3 Trading has no conflicts with the interests of the members of the Class. T3

Trading wants to obtain the maximum recovery for the Class so as to maximize its pro rata share

of that recovery. T3 Trading and its counsel have already demonstrated that they will prosecute

the claims of the Class vigorously by having prepared a certification and filing this motion. In

addition, as further addressed below, T3 Trading’s proposed lead counsel is highly qualified,

experienced and able to conduct this complex litigation vigorously and in a professional manner.

See Lowey and Bonnett resumes, Exs. J and K to Harrison Decl., respectively. Thus, T3 Trading

satisfies the adequacy requirements of Rule 23.

Accordingly, T3 Trading satisfies the requirements of Section 21D(a)(3)(B) and is

presumptively the most adequate plaintiff. Unless this presumption is rebutted, T3 Trading

should be appointed Lead Plaintiff.

THE COURT SHOULD APPROVE T3 TRADING’S CHOICE OF COUNSEL

The Exchange Act provides that the lead plaintiff shall, subject to Court approval, select

and retain counsel to represent the class. See 15 U.S.C. § 78u-4(a)(3)(B)(v). In that regard, T3

Trading has selected and retained the Lowey to serve as Lead Counsel and Bonnett as Liaison

Counsel for the Class.

1. The Court Should Appoint Lowey as Lead Counsel for the Class

As reflected by the firm resume attached to the Harrison Declaration as Exhibit J, Lowey

has extensive experience prosecuting class actions, including securities fraud class actions. Most


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recently, Lowey served as Lead Counsel to represent the Lead Plaintiff the New York City

Funds and the certified class in a consolidated securities fraud action against one of the nation’s

largest hospital systems. See Norfolk Cty. Ret. Sys. v. Cmty. Health Sys., Inc., No. 11-cv-0433 (M.D.

Tenn.). On December 15, 2017, the Sixth Circuit Court of Appeals unanimously reversed the

district court’s dismissal of the amended complaint in that action and upheld the timeliness of

the claims for an expanded class period. See Norfolk Cty. Ret. Sys. v. Cmty. Health Sys., Inc., 877

F.3d 687 (6th Cir. 2017), cert. denied, 139 S. Ct. 310 (2018). In this important litigation, Lowey

ultimately achieved a $53 million settlement, which was approved in all respects on June 19,

2020, concluding nearly nine years of hard-fought litigation. United States District Judge Eli

Richardson commended Lowey’s efforts at the final approval hearing finding that: [C]ounsel for plaintiff has been diligent, very diligent, has worked very hard, knows the case, knows the facts, is very experienced in these sorts of securities fraud class actions, and has gone to the mat for their client for many years.

See Harrison Decl., Ex. J at 2.

The Court may be assured that if the Court approves T3 Trading’s selection of counsel,

the members of the class will receive the highest caliber of legal representation from experienced

and resourceful counsel. Accordingly, the Court should approve Movant’s selection of the

Lowey Firm as Local Counsel.

2. The Court Should Appoint Bonnett as Liaison Class Counsel

The role of liaison counsel is typically one of handling administrative matters and

communications between the court and other counsel. Manual for Complex Litigation, 4th,

§10.221. Bonnett will serve as a liaison for communications with the Court, ensure plaintiffs’

compliance with local rules, and otherwise assist proposed Lead Counsel in prosecution of the

action. Bonnett is well qualified to perform this work given its experience in complex litigation

matters and its familiarity of the practice and procedures of this Court. As reflected in its firm

resume, attached to the Harrison Decl. as Exhibit K, Bonnett has extensive experience

representing plaintiffs in class action and complex shareholder litigation, including in this


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district. Based on the foregoing, Bonnett is well qualified and should be appointed Liaison

Counsel for the Class.

CONCLUSION

In light of the foregoing, T3 Trading respectfully requests that the Court enter the

Proposed Order and (i) consolidate the Related Actions pursuant to Section 21D(a)(3) of the

PSLRA and Federal Rule of Civil Procedure 42(a); (ii) appoint T3 Trading as Lead Plaintiff; (iii)

approve T3 Trading’s selection of Lowey as Lead Counsel and Bonnet as Liaison Counsel; and

(iv) grant such other relief as the Court may deem just and proper. Dated: November 16, 2020 Respectfully submitted,

/s/ Andrew S. Friedman Andrew S. Friedman (State Bar No. 005425) Van Bunch (State Bar No. 009630) William F. King (State Bar No. 023941) BONNETT FAIRBOURN FRIEDMAN & BALINT, PC 2325 E. Camelback Rd. Ste. 300 Phoenix, AZ 85016 Telephone: (602) 274-1100 Facsimile: (602) 274-1199 Email: [email protected]

[email protected] [email protected]

Counsel for Lead Plaintiff Movant and

Proposed Liaison Counsel for the Class LOWEY DANNENBERG, P.C. Barbara J. Hart David C. Harrison Andrea Farah Christina McPhaul 44 South Broadway, Suite 1100 White Plains, New York 10601 Telephone: 914-997-0500 Facsimile: 914-997-0035 [email protected] [email protected] [email protected] [email protected]

Counsel for Lead Plaintiff Movant and Proposed Lead Counsel for the Class


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U.S. MARKET ADVISORS LAW GROUP PLLC David P. Abel 5335 Wisconsin Ave., Ste. 440 Washington, D.C. 20015 Telephone: 202-274-0237 [email protected]

Additional Counsel for Lead Plaintiff Movant


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Notice of Motion and Motion of T3 Trading Case No. 2:20-cv-01797-PHX-SPL 18

CERTIFICATE OF SERVICE

I, Andrew S. Friedman, hereby certify that on November 16, 2020, I authorized a true

and correct copy of the foregoing to be electronically filed with the Clerk of the Court using the

CM/ECF system, which will send notification of such public filing to all counsel registered to

receive such notice.

/s/Andrew S. Friedman


BONNETT FAIRBOURN FRIEDMAN & BALINT, PC

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