Hsu v. PubMatic

Background

Sidney Hsu filed a securities class action under the Private Securities Litigation Reform Act. He alleges that PubMatic, Inc. and the other defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act and Securities and Exchange Commission Rule 10b-5. The proposed class consists of people who purchased PubMatic securities between February 27, 2025, and August 11, 2025.

Hsu and Julie Kim both timely moved to be appointed lead plaintiff. Hsu also asked the court to appoint Glancy Prongay & Murray LLP as lead counsel. Kim asked the court to appoint The Rosen Law Firm, P.A. as lead counsel.

Legal standard

The Act requires the court to appoint the class member most capable of adequately representing the class. The statute generally presumes that the most adequate plaintiff is the person who timely responded to the notice, has the largest financial interest in the relief sought, and makes an initial showing that the requirements of Federal Rule of Civil Procedure 23 are satisfied. That presumption can be overcome if the plaintiff cannot fairly and adequately protect the class or faces unique defenses that make adequate representation impossible.

Analysis

Both Hsu and Kim timely responded to the notice. Hsu alleged losses of about $5,397.38, while Kim alleged losses of approximately $7,212.91. Kim acknowledged, however, that she was pursuing claims based on PubMatic transactions by her husband, Yunsoo Lee, who assigned her the right to pursue those claims. The court concluded that the assignment did not give Kim a financial stake in the action because it provided that the proceeds would be paid to Lee.

The court also concluded that Hsu rebutted the presumption that Kim was the most adequate plaintiff. The assignment stated that it could not be revoked without Lee’s written consent. The court held that this language could mean Lee could revoke the assignment at will, creating a question about Kim’s standing—the legal requirement that she have the right to pursue the claims. The court found that this potential standing defense was unique to Kim and could play a significant role in the case. The court rejected Kim’s argument that the revocability language was probably a drafting error.

The court then considered Hsu, who had the next-largest financial stake. Hsu made an initial showing that his claims were typical of the proposed class because he purchased PubMatic securities during the class period and alleged losses caused by the defendants’ alleged misrepresentations and omissions. The court also found that Hsu had sufficient incentive to advocate for the class, was not aware of a conflict with other class members, and had shown that his proposed counsel had the experience and expertise to prosecute the case.

Order

The court granted Hsu’s motion to be lead plaintiff in this action and any later filed or transferred actions consolidated with it. The court appointed Glancy Prongay & Murray LLP as lead counsel and assigned the firm responsibilities including preparing pleadings, briefing and arguing motions, conducting discovery, negotiating settlement, preparing for trial, and supervising other matters concerning the prosecution or resolution of the consolidated action.

The court denied Kim’s motion to be lead plaintiff. It vacated the scheduled December 4, 2025 oral argument and directed Hsu, the defendants, and lead counsel to meet and confer and submit a stipulation concerning a consolidated amended complaint and the defendants’ response within 10 business days of the order.