Investors Will Ask 2d Cir. to Revive Their Lawsuits

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By Phyllis Diamond

Aug. 23 — Investors in two would-be class lawsuits dismissed by the district court will try to convince the U.S. Court of Appeals for the Second Circuit this week that their actions should be reinstated.

Both cases will be argued in New Haven, Conn.

High-Speed Traders,

In the first case, the plaintiff pension funds claimed they were bilked out of millions of dollars because the defendant stock exchanges favored high-speed traders ( In re Barclays Liquidity Cross, 2d Cir., No. 15-3057, oral argument 8/24/16 ).

The U.S. District Court for the Southern District of New York dismissed the allegations a year ago, saying the exchanges were immune from being sued over their creation of complex order types and the provision of proprietary data feeds (166 SLD, 8/27/15).

The exchanges don't enjoy absolute immunity for their business conduct that bears little resemble to core regulatory actions, the investors argued in a Jan. 7 brief.

Rather than maintaining fair and orderly markets, the plaintiffs contended, the exchanges intentionally used manipulative devices to benefit their favored high-volume traders at the expense of long-term investors.

In an April 4 brief, the exchange defendants told the appeals court they are absolutely immune with respect to all the challenged conduct, which they said is incident to their regulatory obligations.

The investors are represented by Robbins Geller Rudman & Dowd. The exchanges are represented by Baker Botts; Gibson Dunn & Crutcher; Murphy & McGonigle and Levine Lee. The case will be argued Aug. 24.

Solar Energy

In the second case, a class of Vivint Solar Inc. shareholders contended that the installer of solar energy systems misrepresented its financial condition by failing to disclose increased regulatory restraints in a key market and changes in consumer preference ( Stadnick v. Vivint Solar Inc., 2d Cir., 16-00065, oral argument 8/25/16 ).

The U.S. District Court for the Southern District of New York dismissed the allegations late last year and the stockholders appealed. In a March 7 brief, they argued that the defendants' disclosures weren't adequate, and that their “cautionary language” didn't justify dismissing the lawsuit.

In an April 11 brief, the defendants said the district court's decision should be affirmed.

The plaintiffs are represented by Levi & Korsinsky. The defendants are represented by Wachtell Lipton Rosen & Katz and Skadden Arps Slate Meagher & Flom. The case will be argued Aug. 25.

To contact the reporter on this story: Phyllis Diamond in Washington at

To contact the editor responsible for this story: Susan Jenkins at

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