Short Squeeze Stockbrokers And Hedge Funds Face An
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Posted On: 02/02/2021 1:02:21 PM
Short Squeeze Stockbrokers And Hedge Funds Face Antitrust Class Action
A class action lawsuit has been filed against multiple defendants including Citadel. I am posting this because there have been previous announcements by law firms investigating possible class action lawsuits against CYDY. (I did not bother investigating to see how many were actually filed.) Also, Citadel has previously issued some "research" and/or opinion pieces on CYDY which have been referenced in some "investigations". I must admit I get some satisfaction in seeing Citadel on the receiving end of a class action. Note: this post is not intended to relate to recent posts about the impact shorts have had on CYDY.
Link and excerpts below.
https://finance.yahoo.com/news/short-squeeze-...00070.html
SAN FRANCISCO, Feb. 2, 2021 /PRNewswire/ -- The Joseph Saveri Law Firm filed an antitrust class action lawsuit today on behalf of a class of retail investors in federal court against 35 defendants, including Robinhood, E*TRADE, TD Ameritrade, Melvin Capital, Citadel, Sequoia Capital, and others. The plaintiffs allege that they and other retail investors continue to be injured due to a large, overarching conspiracy among the defendants to stop them from buying stocks in open and fair public securities markets. Plaintiffs contend that the purpose and effect of the scheme was to shield hedge funds, venture capitalists, and institutional investors from massive losses they had exposed themselves to due to their highly speculative short selling strategies. Plaintiffs bring claims under the federal and state antitrust laws as well as other state laws and common law.
Several large hedge funds and investment firms, including defendants Citadel and Melvin Capital, possessed massive "short" positions in these relevant securities. "Short" sellers borrow shares or other interests in corporate stock, securities, or other assets. In so doing, they bet that prices of the securities will decrease. If the stock prices in fact drop, a short seller buys the stock back at a lower price and returns it to the lender. The difference between the sell price and the buy price is the profit. Short sellers essentially bet on a stock's failure or decline rather than its success or increase.
"Rather than use their financial acumen to compete and invest in good opportunities in the market to recoup the losses in their short positions, or paying the price for their highly speculative bad bets, these defendants instead hatched an anticompetitive scheme to limit trading in the relevant securities," says Joseph Saveri, counsel for the plaintiff retail investors. "It is unlikely that such a widespread ban among brokerages would have been achievable without a concerted effort in violation of antitrust laws."
Plaintiffs seek to recover damages, as well as injunctive relief, on behalf of themselves and the proposed class, from the defendants. The case is Cheng, et al. v. Ally Financial Inc. et. al., case number 21-cv-00781, in the U.S. District Court for the Northern District of California.
A class action lawsuit has been filed against multiple defendants including Citadel. I am posting this because there have been previous announcements by law firms investigating possible class action lawsuits against CYDY. (I did not bother investigating to see how many were actually filed.) Also, Citadel has previously issued some "research" and/or opinion pieces on CYDY which have been referenced in some "investigations". I must admit I get some satisfaction in seeing Citadel on the receiving end of a class action. Note: this post is not intended to relate to recent posts about the impact shorts have had on CYDY.
Link and excerpts below.
https://finance.yahoo.com/news/short-squeeze-...00070.html
SAN FRANCISCO, Feb. 2, 2021 /PRNewswire/ -- The Joseph Saveri Law Firm filed an antitrust class action lawsuit today on behalf of a class of retail investors in federal court against 35 defendants, including Robinhood, E*TRADE, TD Ameritrade, Melvin Capital, Citadel, Sequoia Capital, and others. The plaintiffs allege that they and other retail investors continue to be injured due to a large, overarching conspiracy among the defendants to stop them from buying stocks in open and fair public securities markets. Plaintiffs contend that the purpose and effect of the scheme was to shield hedge funds, venture capitalists, and institutional investors from massive losses they had exposed themselves to due to their highly speculative short selling strategies. Plaintiffs bring claims under the federal and state antitrust laws as well as other state laws and common law.
Several large hedge funds and investment firms, including defendants Citadel and Melvin Capital, possessed massive "short" positions in these relevant securities. "Short" sellers borrow shares or other interests in corporate stock, securities, or other assets. In so doing, they bet that prices of the securities will decrease. If the stock prices in fact drop, a short seller buys the stock back at a lower price and returns it to the lender. The difference between the sell price and the buy price is the profit. Short sellers essentially bet on a stock's failure or decline rather than its success or increase.
"Rather than use their financial acumen to compete and invest in good opportunities in the market to recoup the losses in their short positions, or paying the price for their highly speculative bad bets, these defendants instead hatched an anticompetitive scheme to limit trading in the relevant securities," says Joseph Saveri, counsel for the plaintiff retail investors. "It is unlikely that such a widespread ban among brokerages would have been achievable without a concerted effort in violation of antitrust laws."
Plaintiffs seek to recover damages, as well as injunctive relief, on behalf of themselves and the proposed class, from the defendants. The case is Cheng, et al. v. Ally Financial Inc. et. al., case number 21-cv-00781, in the U.S. District Court for the Northern District of California.
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