The High Frequency Trading Lawsuit That Has Wall Street Running Scared
By Pam Martens: May 13, 2014
Variety
reports that Sony Pictures is close to snagging the movie rights to the
new book by Michael Lewis, “Flash Boys,” which builds the case that
high frequency trading firms and Wall Street mega banks are conspiring
with U.S. stock exchanges to rig the market against the average investor
and the pension funds holding their meager retirement benefits.
If Sony is smart, it will delay release of the film until it can replicate some real-life courtroom drama from the epic battle that is likely to ensue from a class-action lawsuit in the matter that was filed last month on April 18 in Federal Court in the Southern District of New York.
The plaintiff in the lawsuit has elicited snickers from the moneyed crowd on Wall Street. It was filed on behalf of the city of Providence, Rhode Island, an area founded in 1636 that became one of the original thirteen colonies, and is not typically known for hobnobbing with the hedge funds of Greenwich, Connecticut or the Wall Street suspender crowd in New York.
A more careful look at the lawsuit, however, is sending shivers across Wall Street. The law firm that made the filing is Robbins Geller Rudman & Dowd LLP – a firm staffed with former prosecutors from the U.S. Justice Department and a legal powerhouse whose bread and butter is securities fraud.
Robbins Geller played a pivotal role in the securities class action against Enron, securing a $7.3 billion recovery; $5.7 billion in the Visa/MasterCard antitrust class action; $2.46 billlion in a Household International class action judgment; $925 million in the UnitedHealth Group stock option backdating case; and $657 million in a securities action involving WorldCom – to name just a few.
The firm’s biggest threat to Wall Street is that it actually knows how to define securities fraud to a court, what to ask for in discovery, and it prepares its cases on the basis that they may go to trial – producing deep archives of smoking gun documents.
If Sony is smart, it will delay release of the film until it can replicate some real-life courtroom drama from the epic battle that is likely to ensue from a class-action lawsuit in the matter that was filed last month on April 18 in Federal Court in the Southern District of New York.
The plaintiff in the lawsuit has elicited snickers from the moneyed crowd on Wall Street. It was filed on behalf of the city of Providence, Rhode Island, an area founded in 1636 that became one of the original thirteen colonies, and is not typically known for hobnobbing with the hedge funds of Greenwich, Connecticut or the Wall Street suspender crowd in New York.
A more careful look at the lawsuit, however, is sending shivers across Wall Street. The law firm that made the filing is Robbins Geller Rudman & Dowd LLP – a firm staffed with former prosecutors from the U.S. Justice Department and a legal powerhouse whose bread and butter is securities fraud.
Robbins Geller played a pivotal role in the securities class action against Enron, securing a $7.3 billion recovery; $5.7 billion in the Visa/MasterCard antitrust class action; $2.46 billlion in a Household International class action judgment; $925 million in the UnitedHealth Group stock option backdating case; and $657 million in a securities action involving WorldCom – to name just a few.
The firm’s biggest threat to Wall Street is that it actually knows how to define securities fraud to a court, what to ask for in discovery, and it prepares its cases on the basis that they may go to trial – producing deep archives of smoking gun documents.
