Robbins Geller Rudman & Dowd LLP Announces City of Providence, Rhode Island Public Retirement System Files a Securities Class Action Seeking Injunctive Relief and Damages against High Frequency Trading Firms, Stock Exchanges and Brokerage Firms Business Wire NEW YORK -- April 21, 2014 Robbins Geller Rudman & Dowd LLPhas filed a securities class action in the United States District Court for the Southern District of New York on behalf of the retirement system for the City of Providence, Rhode Island on behalf of all investors who purchased and/or sold shares of stock in the United States between April 18, 2009 and the present on public stock exchanges or alternate trading venues and were injured thereby. “Providence is holding Wall Street accountable,” said Mayor Angel Taveras of Providence, RI. “City employees who have served honorably should not have their retirement incomes compromised by high-tech schemes that enrich Wall Street insiders at the expense of hardworking Americans.” The action is being spearheaded by Patrick J. Coughlin, a former Assistant U.S. Attorney for the District of Columbia and Southern District of California who has served as lead trial counsel in many of the nation’s largest securities fraud class actions, including recovering $7.3 billion for former investors in Enron Corporation, and other socially important actions, including one that stopped cigarette companies from targeting minors by advertising near schools. “The public stock exchanges, high frequency trading firms and brokerages have all participated in a wide-ranging scheme to defraud individual and institutional investors alike through predatory tactics related to high frequency trading,” Coughlin said. “This is the first step in restoring confidence to the stock market, leveling the playing field for investors and holding accountable those responsible for skimming billions of dollars from investors each year,” he added. The retirement system’s complaint charges defendants with engaging in a scheme and wrongful course of business whereby the national securities exchanges, together with a defendant class comprised of the brokerage firms that were entrusted to fairly and honestly transact the purchase and sale of securities on behalf of their clients and scores of sophisticated high frequency trading firms manipulated the U.S. securities markets for years, diverting billions of dollars to themselves annually. The complaint alleges these defendants violated several sections of the Securities Exchange Act of 1934 and the Securities and Exchange Commission rules promulgated thereunder. Specifically, the complaint alleges that for at least the last five years, these defendants routinely engaged in at least the following manipulative, self-dealing and deceptive conduct: “electronic front-running” – where, in exchange for kickback payments, high frequency trading firms were given advance notice of investors’ intentions to buy or sell stock, then raced those bona fide securities investors to the other securities exchanges, transacted in the desired securities at better prices, and then went back and transacted with the unwitting initial investors to their financial detriment; “rebate arbitrage” – where the high frequency trading firms and brokerages obtained kickback payments for transacting on particular exchanges without providing the liquidity that the kickback scheme was purportedly designed to entice; “slow-market (or latency) arbitrage” – where the high frequency trading firms were shown changes in the price of a stock on one exchange, and then picked off orders sitting on other exchanges before those exchanges were able to react and replace their own bid/offer quotes accordingly; “spoofing” and “layering” – where high frequency trading firms sent out orders with corresponding cancellations, often at the opening or closing of the stock market, and often in layers, in order to manipulate the market price of a security and/or induce a particular market reaction; and “contemporaneous trading” – where, by having obtained material, non-public information concerning the trading intentions of class members and then transacting against them, the defendants violated the federal securities laws. In addition to seeking compensatory damages sustained as a result of defendants’ wrongdoing, the retirement system seeks equitable relief, including restitution, disgorgement and forfeiture of illicit profits, along with other injunctive relief tailored to prevent further recurrences of the electronic front-running, slow-market trading, rebate arbitrage, spoofing/layering and contemporaneous trading that has injured – and will continue to injure – investors absent judicial relief. City of Providence City Solicitor Jeffery Padwa, a former President of the Rhode Island Association for Justice, has taken on many worthy targets since being appointed City Solicitor in 2011 and has obtained several important victories that protect and promote the City’s and its residents’ interests. With the City of Providence retirement system charged with managing hundreds of millions of dollars of retirement funds for thousands of retirees and their families, Padwa insists that integrity be returned to the financial markets and that retiree funds be protected. “The American securities markets have historically been the strongest and the most secure places to invest. All investors, large and small, must be ensured they are playing on a level field; our collective financial futures depend upon it.” Contact: Robbins Geller Rudman & Dowd LLP Patrick J. Coughlin, 800-449-4900 email@example.com
Robbins Geller Rudman & Dowd LLP Announces City of Providence, Rhode Island Public Retirement System Files a Securities Class
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