Antitrust Plaintiffs' Motion to Strike Defendant Citadel Securities LLC's Notice of Supplemental Authority — In re January 2021 Short Squeeze Trading Litigation (Dkt. 437, S.D. Fla.)

Summary

Antitrust Plaintiffs' Motion to Strike 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. 21-2989-MDL-ALTONAGA/Torres, Document 437, 5 pages), in the U.S. District Court for the Southern District of Florida, entered November 12, 2021. The motion argues that Citadel's notice, which appends the SEC Staff Report, goes beyond supplemental authority by raising or expanding arguments not made in Defendants' Motion to Dismiss. Relying on Minus v. Miami-Dade Cnty. and Girard v. Aztec RV Resort Inc., Plaintiffs ask the Court to strike the notice to the extent it makes legal argument.

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

Full text

 Case 1:21-md-02989-CMA Document 437 Entered on FLSD Docket 11/12/2021 Page 1 of 5




                            UNITED STATES DISTRICT COURT
                            SOUTHERN DISTRICT OF FLORIDA

                        CASE NO. 21-2989-MDL-ALTONAGA/Torres

IN RE:

JANUARY 2021 SHORT SQUEEZE
TRADING LITIGATION
____________________________________/

This Document Relates to:

ALL ANTITRUST ACTIONS

        ANTITRUST PLAINTIFFS’ MOTION TO STRIKE 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 437 Entered on FLSD Docket 11/12/2021 Page 2 of 5




           Antitrust Plaintiffs respectfully submit this Motion to Strike Defendant Citadel Securities

   LLC’s Notice of Supplemental Authority in Support of Defendants’ Motion to Dismiss the

   Antitrust Tranche Complaint [ECF No. 430] (the “Citadel Notice”). Plaintiffs request that the

   Court strike the Notice to the extent it advances or expands on any arguments in Defendants’

   Motion to Dismiss. Plaintiffs do not object to the Court considering the Staff Report on Equity

   and Options Market Structure Conditions in Early 2021 (the “Staff Report”) appended to the

   Notice as supplemental authority. In line with the Court’s order dated November 5, 2021 (ECF

   No. 434), and pursuant to Local Rule 7.1(a)(3)(A), Plaintiffs’ Co-Lead Counsel for the Antitrust

   Tranche met and conferred with counsel of record for Citadel Securities on November 11, 2021.

   The parties were unable to come to a resolution on the instant motion.

           “[S]upplemental filings should direct the Court’s attention to legal authority or evidence

   that was not available to the filing party at the time that that party filed the original brief to which

   the subsequent supplemental filing pertains. They should further note the argument to which the

   legal authorities or evidence relate. Beyond that, however, supplemental filings should do nothing

   more. Put simply, notices of supplemental authority should not make legal argument.” Minus v.

   Miami-Dade Cnty., 19-cv-25113-BLOOM/Louis, 2021 WL 1185683, at *1 (S.D. Fla. Mar. 26,

   2021) (quoting Girard v. Aztec RV Resort Inc., No. 10-62298-CIV, 2011 WL 4345443, at *2 (S.D.

   Fla. Sept. 16, 2011)). While the Citadel Notice submits the Staff Report as supplemental

   authority, even the most superficial review of the Citadel Notice reveals that it also contains

   supplemental arguments that raise or expand on arguments they did not make in Defendants’

   Motion to Dismiss. Therefore, to the extent the Citadel Notice includes any arguments, it should

   be stricken. Girard, 2011 WL 4345443, at *3 (“Even the most superficial review of the notices




                                                      2
Case 1:21-md-02989-CMA Document 437 Entered on FLSD Docket 11/12/2021 Page 3 of 5




   reveals that they contain argument. . . Because they engage in argument in support of

   Defendant’s Motion to Dismiss, the notices contained in Defendant’s . . . Supplemental Filings

   constitute memoranda of law.). In addition, the Notice is incomplete and misleading.

           First, Citadel mischaracterizes the Staff Report, cherry picks portions that expand its

   arguments in Defendants’ Motion to Dismiss, and omits key portions of the Staff Report. Citadel

   references page 43 of the Staff Report to argue that the SEC concluded that broker-dealers

   restricted trading due to intraday margin calls from a clearinghouse. Citadel Notice at 2. This

   argument mischaracterizes the Staff Report’s findings. Citadel omits that this statement was

   included by the Staff under the subsection “Forces that may cause a brokerage to restrict trading.”

   Staff Report at 43 (emphasis added). Further, the Staff Report’s Disclaimer, as described in

   greater detail below, states that the SEC, “expressed no view regarding the analysis, findings, or

   conclusions contained [t]herein.” Staff Report at 1.1 Therefore, the Staff Report has no factual,

   evidentiary, or precedential value for this action.

           Second, the Staff Report expressly disclaims any legal or factual effect:

                    DISCLAIMER: This is a report of the Staff of the U.S. Securities
                    and Exchange Commission. Staff Reports, Investor Bulletins, and
                    other staff documents (including those cited herein) represent the
                    views of Commission staff and are not a rule, regulation, or
                    statement of the Commission. The Commission has neither
                    approved nor disapproved the content of these documents and, like
                    all staff statements, they have no legal force or effect, do not alter or
                    amend applicable law, and create no new or additional obligations




   1
    See also, e.g., Citadel Notice at 2 (“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’”).


                                                            3
Case 1:21-md-02989-CMA Document 437 Entered on FLSD Docket 11/12/2021 Page 4 of 5




                  for any person. The Commission has expressed no view regarding the
                  analysis, findings, or conclusions contained herein.

   Staff Report at 1 (emphasis added). Thus, no legal conclusions can be drawn from the Staff

   Report and it has no preclusive effect with respect to any factual matter addressed by Defendants

   in their motion papers. To the extent that Citadel attempts to introduce the Staff Report as a

   means to show conflict between the Securities Exchange Act and the Sherman Act, the Staff

   Report does no such thing as, by its terms, it has “no legal force or effect.” Id.

          “Because [Citadel] engage[s] in argument in support of Defendants’ Motion to Dismiss,

   the [Citadel Notice] contained in [Citadel’s] . . . Supplemental Filing[ ] constitute[s a]

   memoranda of law.” Girard, at *3. Therefore, the Citadel Notice does not comport with the rules

   governing supplemental filings, and, to the extent that the Notice offers any arguments, it should

   be stricken. See id.; see also Minus, at *1 (notice of supplemental authority should not include

   improper legal argument).

          Third, the Staff Report does not report on collusion by or between Robinhood, Citadel or

   other market participants. Likewise, and consistent with the above, by its terms the Staff Report

   does not reach any conclusions on the subject.




                                                      4
Case 1:21-md-02989-CMA Document 437 Entered on FLSD Docket 11/12/2021 Page 5 of 5




                        CERTIFICATE OF GOOD FAITH CONFERENCE

          Pursuant to Local Rule 7.1(a)(3)(A), Plaintiffs’ Co-Lead Counsel for the Antitrust

   Tranche hereby certifies that it met and conferred via telephone with counsel of record for

   Citadel Securities on November 11, 2021. During this conference, despite making a good-faith

   effort to resolve the issues by agreement, the parties were unable to come to a resolution on the

   instant motion.


Dated: November 12, 2021                          Respectfully submitted,

By:            /s/ Joseph R. Saveri               By:            /s/ Frank R. Schirripa
                  Joseph R. Saveri                                  Frank R. Schirripa

Joseph R. Saveri (CA SBN 130064)                  Frank R. Schirripa (NY SBN 4103750)
Steven N. Williams (CA SBN 175489)                Kathryn Hettler (NY SBN 5126065)
Christopher K.L. Young (CA SBN 318371)            Seth Pavsner (NY SBN 4969689)
Anupama K. Reddy (CA SBN 324873)                  Eugene Zaydfudim (NY SBN 5204334)
JOSEPH SAVERI LAW FIRM, LLP                       HACH ROSE SCHIRRIPA & CHEVERIE LLP
601 California Street, Suite 1000                 112 Madison Ave, 10th Floor
San Francisco, California 94108                   New York, New York 10016
Telephone: (415) 500-6800                         Tel: (212) 213-8311
Facsimile: (415) 395-9940                         fschirripa@hrsclaw.com
jsaveri@saverilawfirm.com                         khettler@hrsclaw.com
swilliams@saverilawfirm.com                       spavsner@hrsclaw.com
cyoung@saverilawfirm.com                          ezaydufim@hrsclaw.com
areddy@saverilawfirm.com

                                Co-Lead Counsel for the Antitrust Tranche




                                                    5


File and source

File

gov.uscourts.flsd.590042.437.0.pdf

Size

93,959 bytes

SHA-256

6e0698bd6b2bec3d75ce16672456c7ff49b0f2b75a1bb9fc22441fd6bf1f6901

Our copy

gov.uscourts.flsd.590042.437.0.pdf

Original

archive.org