67 F. Supp. 3d 1375

IN RE: BARCLAYS LIQUIDITY CROSS AND HIGH FREQUENCY TRADING LITIGATION.

MDL No. 2589.

United States Judicial Panel on Multidistrict Litigation.

Filed Dec. 12, 2014.

Before SARAH S. VANCE, Chair, MARJORIE O. RENDELL, LEWIS A. KAPLAN, R. DAVID PROCTOR, and CATHERINE D. PERRY, Judges of the Panel.

TRANSFER ORDER

SARAH S. VANCE, Chair.

Before the Panel:* Defendants Bar-clays PLC and Barclays Capital Inc. (collectively Barclays) move under 28 U.S.C. § 1407 to centralize this litigation in the Southern District of New York. The litigation consists of the five actions listed on Schedule A. Four of those actions are already pending in the Southern District of New York, and have been consolidated for all purposes. The fifth action (Great Pacific Securities) is pending in the Central District of California.

The parties’ positions on the Section 1407 motion vary. Lead plaintiffs (a/k/a “Institutional Investor Plaintiffs”)1 in the consolidated action support centralization in the Southern District of New York. The “Exchange defendants,”2 which are not sued in the California action, state that they take no position on the relatedness of the claims against Barclays, and that they responded to preserve their rights to argue that the claims against Barclays in the consolidated action should be severed. If we order centralization, the Exchange defendants argue we should select the Southern District of New York as transferee district. Finally, the Great Pacific Securities plaintiff opposes centralization altogether.

The consolidated action and the Great Pacific Securities action share allegations concerning the operation of the Barclays Liquidity Cross or “LX” dark pool.3 Plaintiffs in both actions assert that Bar-clays misrepresented the LX dark pool as a safe haven for investors — a place insulated from aggressive and predatory high frequency trading (HFT) practices. In reality, according to the complaints, Bar-clays actively courted HRT firms for the dark pool, providing them with material non-public information and associated perks that gave them an unfair advantage over other traders.4

In opposing centralization, the Great Pacific Securities plaintiff argues that its *1376action does not involve the Exchange Defendants and that it has brought only California law claims, which unlike the New York federal securities law actions, are not subject to the strictures of the Private Securities Litigation Reform Act. Plaintiff further contends that there are, in reality, only two actions before us and thus alternatives to centralization are preferable to creation of an MDL. We find these arguments unconvincing. As we have stated repeatedly, Section 1407 does not require a complete identity or even a majority of common factual issues as a prerequisite to centralization. See In re Darvocet, Darvon & Propoxyphene Prods. Liab. Litig., 780 F.Supp.2d 1379, 1381 (J.P.M.L.2011) (citing cases). The statute also does not require a complete identity of claims or parties. See In re: Bank of New York Mellon Corp. Foreign Exch. Transactions Litig., 857 F.Supp.2d 1371, 1373 (J.P.M.L.2012).5 Finally, even though there are just two actions before us, we are not convinced, in these circumstances, that alternatives to centralization are preferable to creation of an MDL. The common factual issues here are sufficiently complex, and the Great Pacific Securities plaintiff, a large and sophisticated financial services firm, does not seriously dispute that the nexus of this litigation lies squarely in New York City.

Accordingly, on the basis of the papers filed and the hearing session held, we find that centralization under Section 1407 in the Southern District of New York will serve the convenience of the parties and witnesses and promote the just and efficient conduct of this litigation. As explained above, these actions, both of which are putative nationwide class actions, share factual issues arising from allegations that Barclays misrepresented its LX dark pool as a safe haven insulated from high frequency traders. Centralization will eliminate duplicative discovery, prevent inconsistent pretrial rulings on class certification and other issues, and conserve the resources of the parties, their counsel, and the judiciary.

After weighing all relevant factors, we select the Southern District of New York as transferee district for this litigation. Barclays represents that virtually all of its employees responsible for operating, maintaining, and marketing the LX dark pool are based in Barclays’ New York City office, and that many of the documents related to the operation and marketing of LX are located there. The Honorable Jesse M. Furman, to whom we assign the litigation, has been moving the consolidated action forward, and we have no doubt that he will steer this MDL on a prudent course. IT IS THEREFORE ORDERED that the action listed on Schedule A and pending outside the Southern District of New York is transferred to the Southern District of New York, and, with the consent of that court, assigned to the Honorable Jesse M. Furman for coordinated or consolidated pretrial proceedings.

SCHEDULE A

MDL No. 2589 — IN RE: BARCLAYS LIQUIDITY CROSS AND HIGH FREQUENCY TRADING LITIGATION

Central District of California

GREAT PACIFIC SECURITIES v. BARCLAYS PLC, ET AL., C.A. No. 8:14-01210

*1377 Southern District of New York

CITY OF PROVIDENCE, RHODE ISLAND v. BATS GLOBAL MARKETS, INC., ET AL., C.A. No. 1:14-02811 AMERICAN EUROPEAN INSURANCE COMPANY v. BATS GLOBAL MARKETS, INC, ET AL., C.A. No. 1:14-03133

HAREL INSURANCE CO, LTD. v. BATS GLOBAL MARKETS, INC., ET AL., C.A. No. 1:14-03608 FLYNN, ET AL. v. BANK OF AMERICA CORPORATION, ET AL., C.A. No. 1:14-04321

In re Barclays Liquidity Cross & High Frequency Trading Litigation
67 F. Supp. 3d 1375

Case Details

Name
In re Barclays Liquidity Cross & High Frequency Trading Litigation
Decision Date
Dec 12, 2014
Citations

67 F. Supp. 3d 1375

Jurisdiction
United States

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