Robbins Geller Rudman & Dowd LLP Announces City of Providence, Rhode Island Public Retirement System Files a Securities Class

  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
djr@rgrdlaw.com
 
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