Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Yes Iron Mike agree. Negligible impact if any.
Maverick the situation you suggest is not wholly implausible nor necessarily a poor tactic. GLTU!
diver you left out one source of retail diligence- the guy down the block who lives on the corner!
Smitty - see my post 577321. But in brief, the motion to dismiss is brought before any party has the chance to obtain discovery (information from the defendant or 3d parties). It’s just a procedure to avoid costly discovery and other proceedings if the plaintiff’s legal theories are legally insufficient.
wimike- agree on all counts, difficultly of proof of spoofing to the aging and investment fatigue. But (1) recent developments such as the Harrington case are showing a possible path and probably more importantly (2) NWBOs lawyers have had that path identified well before Harrington and have undoubtedly planned for that. For example, management here accuses traders of naked or other impermissible shorting. Harrington had a shorting theory. NWBO’s lawsuit does not.
Flex agree - we’ll see how long CDEL wants to suggest it will defend itself on the backs of its customers. Which if it occurs would (I think) not extricate CDEL with respect to those trades, just add more defendants with more funds to pay a possible judgment. It happens much more often than one might think that a business dilemma such as the one identified by CDEL’s counsel is later abandoned by the client.
Of relevance to that possibility, liability among multiple wrongdoers (at least in a tort claim setting) is “joint and several.” There the Judgment holder can collect from any wrongdoer to the amount of that defendant’s liability. In practice, the Judgment holder usually goes after the deepest pocket.
So if I’m CDEL (or any other defendant) I’m asking myself, do I really want to expose some of my biggest customers to the defense costs and aggravation of litigation if in the end that’s going to cost me more to defend the claims against my entity (more parties, more claims, more documents, etc) and I probably don’t control or really, limit my company’s ultimate liability?
Jerry - NWBO’s claim is that it was harmed due to the reduction in value of stock “sold” by it during the periods of alleged spoofing. NWBO shareholders who traded during those periods would have the same claims. I expect after the MTD is denied we’ll see class actions bringing those claims I’m a little surprised in light of Harrington that this has not happened. Maybe there’s something I am wrong about the law here it doesn’t make sense to me.
Flex- in Harrington v CIBC, a judge sitting in the same court as the nwbo case denied those defendants’ argument that trading for customer accounts could relieve those defendants from possible liability for the spoofing claims against them at the MTD 12.b.6 stage: That defendants trade for customer as well as their own accounts “does not undercut the … numerous allegations that Defendants designed and operated the algorithms that spoofed.” 2/9/22 Opinion and Order, Slip op at 10.
Also I am unaware of caselaw excusing unlawful conduct on the basis that, “somebody paid me to break the law.” Further I am skeptical that our defendants
can produce many customer orders that basically direct defendants to engage in order entry and trading activities that constitute spoofing. Any such customers shown in CDEL and other defendants’ discovery disclosures who DID so direct their brokers might conveniently be referred to in the future by another name: “Co-Defendants.”
jed- Motion to Dismiss if my inferences are accurate, maybe 2-6 weeks after nwbo responds the that motion. Summary Judgment comes toward the end of the case. I’d only be guessing abt what ind of discovery parties will request tho defendants will ask for long dates (6 mo nor likely longer). It will be interesting to see what the court allows. There will be a Scheduling Conference Order entered setting out dates after answers are filed and the parties each propose a Pretoria’s and trial schedule. SCO I’d guess maybe June-ish based on if I recall correctly answers due April 4(?).
Am we’re in agreement on substance I am just conservative here. Best regards!
ATL very welcome and others including you have really carried the burden well. Sure would like to see that string of promised PRs coming…. Me and skitahoe and others are getting old, which of course is nothing to patients/families.
Am813 I’ll agree and disagree. Agree that MTD here is unlikely to succeed. But I think it is unlikely that the case would be tried if the (virtually certain) post/discovery Summary Judgment motion by any defendants who are still defending is unsuccessful. Good counsel by then should be able to pretty much agree on hard (mathematical) damages. Unless one or the other side becomes really intransigent the Judge or a mediator will wrangle a settlement. Defendants IMO would be faced with presenting a defense likely to raise juror hostility.
hope: my guess discovery starts sooner than summer (solstice summer, anyway).
Newman I practice in federal court but not the same court and not securities. The pretty regular practice is that answers are not due until any preliminary (12.b.6) motion is denied. Bc why require a party to do something that would be unnecessary if that motion is granted? So it is my inference that the court does not expect to grant the 12.b.6 motion to dismiss. And further that the court is paying specific attention to the case, understands the basis for the 12.b.6 even before it is filed, and will move the case forward expeditiously. Could be wrong abt any/all but doubt it.
ATL - a little background. 12.b.6. tests whether the factual allegations, taken as true, state a legal claim for recovery. Let’s say NWBO had the same facts but sued for breach of contract. The court will assume the truth of the allegations but dismiss the claim (the breach of contract theory) because there exists no contract between those parties. An obvious oversimplification. So the question is, “Did NWBO allege facts that if true state a recognized basis for a recovery against this defendant?” Or more specifically, “Do the facts as alleged state a claim that Defendants engaged in civil spoofing that violates securities law?” Bc why litigate a case if in the end a plaintiff proves the
allegations but those do not entitle that
plaintiff to a recovery? Logic and efficiency, tho the analysis can be complex. AFTER DISCOVERY, which is what happens if the 12.b.6 is denied, Defendants (if the case is not resolved by then) can file a Summary Judgment motion under Rule 56. In that motion, Defendants can argue that it is impossible for Plaintiff to prove their factual allegations, and the facts developed in discovery will either show that such proof is possible, or impossible. If proof is possible but not absolute (ie disputed - each side has its own “facts” to present), the jury decides whose proofs are more compelling. Since most facts here are electronic I think (tho the letter from CDEL counsel claims otherwise) that defendants would have a hard time disputing the factual allegations
Rh and Soj: CDEL will file “12.b.6” motion to dismiss on Monday. For the purpose of considering that motion CDEL must accept the allegations of the complaint as true. NWBO has I think 45 days to file its response I expect that will be filed within days. The court does not schedule a date for an expected ruling. I suspect the court will rule fairly promptly which could be a couple weeks to a couple months. The court already ordered Defendants to file Answers to the complaint so the ruling really is not holding anything up.
X I agree with your belief. My concern is that we are potentially one black swan/setback/further unmet timing prediction from more serious operational financial challenges. Yes there is risk from outside actors that cannot be controlled. The longer we languish the greater the risk. All risks must be weighed including those management imposes by declining to leverage Direct with one or more partners OR otherwise stabilizing financing WHILE continuing not to communicate in any way which decision has its own risk and exacerbates other known and unknown risks. While, in my outside but probably reasonable opinion, such communications present, really, no material risk on their own.
So thermo may I guess that you don’t like the loan terms? Me, either. Time’s a-wasting.
Wow - 10% discount plus 8% interest plus pre-payment penalty. Better than solution for sure but pretty expensive build-out money imo.
Gary I’m fairly certain that the measure of damages in the lawsuit is the difference in price at the time of sales during the relevant period identified in the lawsuit between the hypothetical “price without spoofing” and the actual sale price, determined with respect to each share sold during that period. Future share price I know is irrelevant tho with respect to all theories.
Otherwise I believe the suit, which I agree is secondary in importance, is discussed largely bc there is little other material news. FWIW. Best regards
Some state courts allow for non-unanimous juries at least in civil cases. Good luck maybe this is the week for sometime happen. MIA filing is getting a little long in the tooth!!
vator &PM. NWBO v Citadel is in federal Southern District of NY. Rule 48’of the Federal Rules of Civil Procedure applies, and says in part:
Rule 48. Number of Jurors; Verdict; Polling
(a) Number of Jurors. A jury must begin with at least 6 and no more than 12 members, and each juror must participate in the verdict unless excused under Rule 47(c).
(b) Verdict. Unless the parties stipulate otherwise, the verdict must be unanimous and must be returned by a jury of at least 6 members.
PM remember the burden of proof necessary to show unlawful “intent” as an element of different applications. In a criminal case as discussed in NYT intent must be proven “beyond a reasonable doubt.” In a civil claim as brought by NWBO it APPEARS to be the normal “preponderance of the evidence,” also stated as the facts show one version “is more likely than not.” Fraud claims require proof by a “clear and convincing evidence.” I know these sound like splitting hairs somewhat but plenty of fact situations are resolved differently where different standards are applied.
Captain there is not an apparent basis for a counter suit that I see (tho reminder this is not my primary area of practice). This doesn’t mean that a counter suit won’t be filed it is true that is often a tactic. But the fact the lawsuit was filed by nwbo against mms does not provide any basis for a claim - everything said in the proceedings is “privileged” and protected. The possibility of a counter claim by other actors may keep nwbo from adding certain or any of those. The court will enter (or maybe, has entered) a Scheduling Order that will set a reasonably firm deadline for any counterclaim. So then we’ll know once that date passes - if the lawsuit gets that far which, IMO, is likely. Best wishes
barcode - there is a subtlety that would not be apparent to a non-lawyer. Usually when a motion to dismiss is filed (a “12(b)(6)” motion) the defendant’s time allowed to file its Answer to the Complaint is stayed (paused). If the Motion is granted then no answer need be filed, if denied, the defendant then files its answer. Here, Citadel requested the court to extend the time period on the motion but did NOT
request an extension of time to file its answer. I have never seen a case where that request was necessary - usually it’s automatic. Here, tho, the court did not allow Citadel to wait for a ruling in the motion - the Court went out of its way ti issue a “clarification” that Citadel’s Answer is due April 5. That is likely before the motion to dismiss will have been decided. So really that round goes to nwbo it seems.
Turner/anyone - out of curiosity what does a 10% borrow cost actually mean (how is it calculated)? Is that an annualized rate which is reduced to a daily rate or something similar? TIA - Happy Weekend All Friends
BIO & Steady. Read the post by Hector Garcia. Terrific DD, disappointing commentary. Have a pleasant evening.
gb thank you kindly. Still couldn’t find on my own but the link got me there.
gbrown: I am not great at Twitter. However I am unable to find this supposed tweet of @afeuerstein. Is this not the correct tweet handle? Can you provide a link? TIA
Thanks Doc for reminding us all about the big picture. Happy weekend to all.
Bright: Thank you for an earnest report.
Extremist- a very fine line to walk, indeed. That’s why (they will say) they get paid “the Big Bucks.”
“Ken Griffin just admitted to fraud and illegal criminal naked shorting against NWBO in court.” Not correct.
“in court documents, Citadel has admitted to spoofing.” Not correct.
Just to be clear this blogger makes the false claim that the defendants in the NWBO v MM litigation “admitted” to spoofing. This is incorrect as I explained in an earlier post which I would identify if I knew how to do that!!
Doc thanks for this information
ae et al: I use and recommend Ka'Chava.
Deterrent, hopefully, yes.
Dear Horseb4- we all do what we can!! Have a great day!!
dennisdave: I didn’t mean to put your comment in a bad light and certainly not to mischaracterize. I actually started to explain that I had seen similar comments and to state I was not meaning to call you out however I write on my phone and so I have to limit the length of my posts. So apologies - just trying for clarity and avoidance of others possibly misinterpreting. Anyway GLTAL patients families friends and longs!