Replies to post #704475 on NorthWest Biotherapeutics Inc (NWBO)

[dennisdave]

Fourth, Defendants argue that Plaintiff “admits” Defendants may have been displaying bids and offers on behalf of their clients, and relatedly, that the FAC fails to allege that Baiting Orders were placed and cancelled by the same client. (Def. Br. at 14; quoting FAC ¶ 38). Defendants contend this is fatal to Plaintiff pleading a manipulative act. Both arguments are predicated on Defendants' factual assertions that Defendants were trading on behalf of their clients and that the “clients . . . decide[d] whether and when to place an order and at what price.” (Id. at 3; see also id. at 23).

But that is not what is pled in the FAC. Rather, the FAC alleges that “[t]he spoofing activity . . . may have been executed by Defendants for their own accounts . . . or for client accounts” (FAC ¶ 38) and that, either way, it was Defendants' algorithms that controlled the trades (Id. ¶ 267 (“each Defendant specifically designed and implemented algorithmic trading programs to execute their spoofing schemes”)); see also id. ¶¶ 18, 19, 24-25, 30, 33, 37, 270-71). Thus, NWBO has not “admit[ted]” that Defendants were merely following their clients' instructions. Defendants' argument that their clients “set the terms of those orders” (Def. Br. at 23) is Defendants' version of the facts and raises a dispute that cannot be resolved on a motion to dismiss. See, e.g., Locus Techs. v. Honeywell Int'l Inc., 632 F.Supp.3d 341, 355 (S.D.N.Y. 2022) (“this Court cannot accept on a motion to dismiss Defendant's competing version of the facts, where those facts are premised on matters not pled in the Complaint”)

Here you see Plaintiff quoting the Defendants admitting to spoofing. However, the defendant argues that it was all on "their clients' instructions". This is irrelevant if that did occur, which needs to be established in discovery, because Defendants must check if their clients are manipulating the stock price and therefore are liable in any case.

But you knew that already.