Defendant Citadel Securities LLC's Notice of Supplemental Authority in Support of Defendants' Motion to Dismiss the Antitrust Tranche Complaint — In re January 2021 Short Squeeze Trading Litigation (Dkt. 430, S.D. Fla.)

Summary

Defendant Citadel Securities LLC's Notice of Supplemental Authority in Support of Defendants' Motion to Dismiss the Antitrust Tranche Complaint in In re: January 2021 Short Squeeze Trading Litigation, Case 1:21-md-02989-CMA (Case No. 21-MD-2989-ALTONAGA/TORRES, Document 430, 5 pages), in the U.S. District Court for the Southern District of Florida, entered October 26, 2021, relating to All Antitrust Actions. Citadel Securities submits the SEC staff report on equity and options market structure conditions in early 2021, issued October 14, 2021, as a supplement to the Motion to Dismiss [ECF No. 408]. The notice quotes the report's conclusion that clearing brokers faced intraday margin calls from a clearinghouse and that some broker-dealers, in reaction, decided to restrict trading in a limited number of individual stocks.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Date: 2021-10-26

Cite this document

“Defendant Citadel Securities LLC's Notice of Supplemental Authority in Support of Defendants' Motion to Dismiss the… (Dkt. 430).” Original at archive.org, dated 2021-10-26. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2021-10-26-motion-was-briefed-see-e-g-girard-v-aztec-rv-resort-inc-no-10-cv-62298-2011/, SHA-256 7f8ccc9761557379722dd1b339a45b8cca98e03b1bcae78896378087a694fee1.

Full text

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA

CASE NO. 21-MD-2989-ALTONAGA/TORRES

In re:

JANUARY 2021 SHORT SQUEEZE
TRADING LITIGATION

_____________________________________/

This Document Relates to:

ALL ANTITRUST ACTIONS

DEFENDANT CITADEL SECURITIES LLC’S NOTICE
OF SUPPLEMENTAL AUTHORITY IN SUPPORT OF DEFENDANTS’
MOTION TO DISMISS THE ANTITRUST TRANCHE COMPLAINT

Case 1:21-md-02989-CMA Document 430 Entered on FLSD Docket 10/26/2021 Page 1 of 5

2
Defendant Citadel Securities LLC respectfully submits this supplement to Defendants’
Motion to Dismiss the Antitrust Tranche Complaint (“Motion to Dismiss,” ECF No. 408). On
October 14, 2021, the Securities & Exchange Commission (“SEC”) released the Staff Report on
Equity and Options Market Structure Conditions in Early 2021 (“Report”), attached as Ex. A.1
In the Report, the SEC reviewed the causes of the January 2021 trading restrictions.
Although the SEC noted “[o]ne narrative” that “attributed the broker-dealer trading restrictions to
pressure from hedge funds and their commercial partners,” the SEC instead concluded: “A number
of clearing brokers experienced intraday margin calls from a clearinghouse. In reaction, some
broker-dealers decided to restrict trading in a limited number of individual stocks in a way that
some investors may not have anticipated.” Report at 32-33, 43; see also id. at 3 (“volatility
combined with settlement risks led some firms to temporarily restrict trading.”); id. at 31 (“The
risk management mechanism of these clearing agencies effectively led others in the transaction
chain—such as retail broker dealers—to pause and manage risk exposure that arose as the rate of
transactions accelerated.”); id. at 32 (“some broker dealers restricted activities in a limited number
of individual stocks in reaction to margin calls and capital charges imposed by NSCC.”).
The Report pertains to the previously-filed Motion to Dismiss but was not available at the
time the Motion was briefed. See, e.g., Girard v. Aztec RV Resort, Inc., No. 10-CV-62298, 2011
WL 4345443, at *3 (S.D. Fla. Sept. 16, 2011) (“[A] party may file a supplement when, through no
fault of the filing party, certain relevant materials were not in the party’s possession at the time
that the party filed its motion, response, or reply”). The Report pertains to, inter alia:
(1) Plaintiffs’ argument that “Government investigations are indicative of anticompetitive
collusion” and specifically that it is “indicative of collusion” that the SEC is “investigating the
events concerning the January 28, 2021 trading restrictions” (Opp., ECF No. 413 at 18 & n.20);
Report §§ 3.5, 3.6, 4; and
(2) Defendants’ argument that “the enforcement of Plaintiffs’ claims would create . . .
conflict between the Exchange Act and the Sherman Act . . . because the SEC is currently
investigating the January 2021 short squeeze events” (ECF No. 408 at 37); see generally, Report.

1 The Court may take judicial notice of the Report because it is a public record, the accuracy of
which cannot reasonably be questioned. See Capece v. DTCC, No. 05-CV-80498, 2005 WL
4050118, at *5 (S.D. Fla. Oct. 11, 2005) (taking judicial notice of SEC release at dismissal stage).
Case 1:21-md-02989-CMA Document 430 Entered on FLSD Docket 10/26/2021 Page 2 of 5

Dated: October 26, 2021
John F. O’Sullivan

QUINN EMANUEL URQUHART & SULLIVAN,
LLP
John F. O’Sullivan (FBN 143154)
2601 South Bayshore Drive, Suite 1550
Miami, FL 33133
Telephone: (305) 439-5008
johnosullivan@quinnemanuel.com

QUINN EMANUEL URQUHART & SULLIVAN,
LLP
William A. Burck
1300 I Street NW, Suite 900
Washington, D.C. 20005
Telephone: (202) 538-8000
Facsimile: (202) 538-8100
williamburck@quinnemanuel.com

QUINN EMANUEL URQUHART & SULLIVAN,
LLP
Christopher D. Kercher
Peter H. Fountain
51 Madison Avenue, 22nd Floor,
New York, New York, 10010
Telephone: (212) 849-7000
Facsimile: (212) 849-7100
christopherkercher@quinnemanuel.com
peterfountain@quinnemanuel.com

BARTLIT BECK LLP
Adam L. Hoeflich
Dawson Robinson
54 W. Hubbard St., Ste. 300
Chicago, IL 60654
Telephone: (312) 494-4400
Facsimile: (312) 494-4440
adam.hoeflich@bartlitbeck.com
dawson.robinson@bartlitbeck.com

Counsel for Defendant Citadel Securities
LLC

Case 1:21-md-02989-CMA Document 430 Entered on FLSD Docket 10/26/2021 Page 3 of 5

CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on October 26, 2021, I electronically filed the
foregoing document with the Clerk of the Court using CM/ECF. I further certify that the
foregoing document is being served this day on all counsel of record via transmission of Notices
of Electronic Filing generated by CM/ECF or in some other authorized manner for those counsel
or parties who are not authorized to receive Notices of Electronic Filing.

Case 1:21-md-02989-CMA Document 430 Entered on FLSD Docket 10/26/2021 Page 4 of 5