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🧑‍⚖️Harrington Discovery Update: Market Makers are slowly losing the battle to protect the identity of third parties involved in spoofing🧑‍⚖️

$NWBO $BOC
@CIBCCM

@VirtuFinancial


The Case: Harrington Global Opportunity Fund, Limited v. BofA Securities, Inc., 1:21-cv-00761, (S.D.N.Y.)

Plaintiff: Harrington Global Opportunity Fund, Limited

Defendant Market Makers: TD Securities (USA) LLC, TD Securities, Inc., SG Americas Securities, LLC, Merrill Lynch Canada Inc., CIBC World Markets Inc., and BofA Securities, Inc.

In federal court the parties are obligated to meet and confer regarding any discovery issues before bringing the matter to the Court’s attention. On April 17th the Plaintiff in the above case requested an extension of the fact discovery timeline (Docket Entry #214). The plaintiff explained that Defendant had not complied with discovery and summarized negotiations between the parties to resolve said discovery disputes. In this post I’ll quickly address some of those negotiations.

Docket Entry #214: https://courtlistener.com/docket/46947528/harrington-global-opportunity-fund-limited-v-bofa-securities-inc/

✅Plaintiff seeks communications regarding Defendants' algorithms

"Defendants also have failed to produce documents and communications concerning algorithms used by customers or Defendants in the trading at issue (the only partial exception is Merrill, which produced a small number of documents concerning trading algorithms recently, after resisting production for months)."

✅Plaintiff seeks communications between Defendants' customers and Defendants

"These open discovery issues—which have resulted in Defendants having produced virtually zero emails with customers or about customers concerning their trading behavior in Concordia—must be resolved well before depositions commence."

✅Market Makers other than the listed Defendants are involved in the alleged spoofing

"And even in doing so, CIBC confirmed on the same day that it is refusing to produce data reflecting approximately 21 million shares of Concordia executed through Virtu, a third-party broker, and transferred to CIBC during the Relevant Period."

✅Virtu and other non-defendant market makers have received, or are likely to receive, subpoena(s)

"In light of these developments, Harrington now must (1) confer with CIBC regarding the data that CIBC has refused to produce (among other open issues); (2) analyze the existing dataset to confirm it is in fact complete; (3) perform a millisecond matching analysis of the full dataset to identify orders for deanonymization pursuant to the Court’s March 18 and March 21 Orders; (4) meet and confer with CIBC on that issue as needed; (5) after receiving the deanonymized identities, evaluate any coordinated spoofing activity, including through third-party discovery; and (6) prepare for and take fact depositions." (emphasis added)

"Moreover, as the Court will recall, Merrill discovered only in January 2024—as a result of an admitted “screw up”—that the vast majority of customer trade and order data it had yet to produce was held by a third party.…and Harrington has issued a subpoena to the third party." (emphasis added)

✅Customers are likely to receive subpoena(s)

"But some of the most promising potential compromises the parties have discussed will require Harrington to first obtain and then review the complete trade and order data, obtain deanonymization of certain trading activity as ordered by the Court, and attempt to tailor document requests to customers and accounts believed to be involved in spoofing." (emphasis added)
7:35 PM · Apr 18, 2024
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