NorthWest Biotherapeutics Inc (NWBO)

[hoffmann6383]

I’ve read quite a bit that NWBO might be afraid of discovery. I find these misguided narratives to be lacking in an understanding of the law and how these cases typically operate. First, discovery is limited to relevant documents. Second, you will typically see a protective order in these types of cases. Lastly, if anyone is going to be scared of discovery, it would be the Defendants.

1. Federal Rules of Civil Procedure defines what is relevant to be discovered.

Rule 26. Duty to Disclose; General Provisions Governing Discovery

Rule 26(b), as amended, states that the parties “may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense.” NWBO’s claim can be found here. Citadel, et al, defense will likely be filed on 4-5. The discovery in NWBO’s case will be limited to NWBO's Complaint and the defenses to said Complaint.
Rule 26(b) goes on to add another threshold consideration – the information must also be "proportional to the needs of the case.” The Rule directs the courts to consider:

the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit

https://www.advocatemagazine.com/article/2017-july/proportionality-and-necessity-under-federal-rule-of-civil-procedure-26-b

With the amount in controversy being large and the resources of the defendants being vast, any proportionality analysis is likely to be skewed against the defendants in our case.

2. In Harrington Global Opportunity Fund, Limited v. CIBC World Markets Corp. et al, No. 1:21-cv-00761-LGS, a civil case involving claims of spoofing, we saw the parties ask for, and the Court grant, a Protective Order.

The Protective Order states, in relevant part:

Each Party may designate as confidential for protection under this Protective Order, in whole or in part, any document, information, or material that constitutes or includes, in whole or in part, confidential or proprietary information or trade secrets of the Party or a Third Party to whom the Party reasonably and in good faith believes it owes an obligation of confidentiality with respect to such document, information, or material (“Protected Material”). This includes, but is not limited to, documents, information, or materials that reveal…

I expect there to be a jointly filed request for a Protective Order with the Court in NWBO’s case. Anything disclosed during discovery and marked as 'Confidential' will not see the light of day.

3. Defendants have reason to be wary of discovery.

Look no further than the statements from the FBI related to spoofing:

...engaged in a sophisticated scheme to manipulate the market for precious metals futures contracts for his own gain by placing orders that were never intended to be executed...The Criminal Division is committed to prosecuting those who undermine the investing public’s trust in the integrity of our commodities markets through spoofing or any other illegal conduct. - Assistant Attorney General Benczkowski

This defendant was involved in manipulating the precious metals commodity markets for several years, and I thank the FBI for its diligent investigation of this matter and its commitment to hold accountable those who use technology to their advantage to cheat these markets...The investigation of deceptive trading practices by others involved in this scheme is ongoing. - U.S. Attorney Durham

With his guilty plea, Edmonds admitted he intended to introduce materially false and misleading information into the commodities markets...By conspiring with his trading partners to place spoof orders, he blatantly attempted to profit off of an unfair market that he helped create. The FBI will continue to work with our partners to insure financial markets remain a level playing field for all investors. - FBI Assistant Director in Charge Sweeney

https://www.justice.gov/opa/pr/former-precious-metals-trader-pleads-guilty-commodities-fraud-and-spoofing-conspiracy

Discovery opens Defendants to criminal prosecution (if there isn't already an ongoing criminal investigation) and additional civil liability.

Takeaways:

1. NWBO will not be afraid of discovery.
2. Citadel, et al, has the most to lose with discovery by opening up further counts and/or additional defendants to liability. There is also a serious risk of criminal prosecution as we’ve seen multiple spoofing cases brought by the DoJ: United States v. Vorley et al., 18-cr-35, United States v. Bases et al., 18-cr-48, USA v. Smith et al, No. 1:19-cr-00669 and then the deferred criminal prosecution of JPMorgan where they agreed to a $920m settlement (not an exhaustive list).

^^ All IMO