Stay up-to-date with the latest developments in securities law through access to both news and all statutes and regulations. Find relevant corporate filings through a searchable EDGAR database. And...
Nov. 29 — The national securities exchanges aren’t immune from fraud suits by investors claiming they were bilked out of millions because the markets favored high-speed traders, the Securities and Exchange Commission said Nov. 28 ( In re Barclays Liquidity Cross , 2d Cir., No. 15-3057, 11/28/16 ).
The exchanges are only immune when they are engaged in their traditional self-regulatory functions—i.e., regulating their members, the SEC told the U.S. Court of Appeals for the Second Circuit in a friend-of-the-court brief.
A group of pension funds alleged that the exchanges manipulated the market by providing certain high-frequency trading customers with proprietary services that allowed them to obtain—and trade on—market data ahead of ordinary investors.
The U.S. District Court for the Southern District of New York dismissed the allegations, saying the exchanges were immune from being sued over their creation of complex order types and the provision of proprietary data feeds. The pension funds appealed.
In an amicus curiae brief, the SEC said the exchanges aren’t entitled to absolute immunity from suit for their alleged misconduct. It argued that the functions were performed by the exchanges in the operation of their own markets and not as part of their traditional self-regulatory functions.
The exchanges also argued that the SEC should have handled the matter, but the commission didn’t agree. It said that although Congress created a detailed scheme of administrative and judicial review for challenges to certain actions of self-regulatory organizations, it didn’t authorize the commission to adjudicate private parties’ fraud claims against the SROs.
To contact the reporter on this story: Antoinette Gartrell in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Phyllis Diamond at PDiamond@bna.com
To view the SEC’s amicus brief, visit: http://www.bloomberglaw.com/public/document/In_ReBarclays_Liquidity_Cross_Docket_No_1503057_2d_Cir_Sept_29_20/2
Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)