IN THIS ISSUE
Eighth Circuit Overturns Class Certification in Suit Against TD Ameritrade Holding Corp., Holding Individualized Evidence is Required for Each Putative Class Member; District Judge Approves Magistrate’s Recommendation to Deny Dismissal of Putative Securities Class Action and Expressly Declines to Overrule Ninth Circuit Precedent Supporting Private Parties’ Right of Action Under Section 14(e); Northern District of Illinois Allows Securities Class Action to Proceed Against Exelon Over Bribery Scheme; Ninth Circuit Affirms Dismissal With Prejudice of Putative Securities Class Action Against Gigamon.
EIGHTH CIRCUIT OVERTURNS CLASS CERTIFICATION IN SUIT AGAINST TD AMERITRADE HOLDING CORP., HOLDING INDIVIDUALIZED EVIDENCE IS REQUIRED FOR EACH PUTATIVE CLASS MEMBER
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Eighth Circuit Holds Rule 23(b)(3)’s Predominance Requirement Not Met in Securities Fraud Action Against Brokerage Firm Wednesday, May 5, 2021
In
Ford v. TD Ameritrade Holding Corp., 2021 U.S. App. LEXIS 12008 (8th Cir. Apr. 23, 2021), the United States Court of Appeals for the Eighth Circuit reversed a district court’s order certifying a class of customers who had used the defendant’s brokerage services to trade securities and were allegedly injured by defendant’s undisclosed “order routing practices.” The Eighth Circuit determined that plaintiff’s expert’s proposed algorithm could not overcome the complex, trade-by-trade inquiry needed to adjudicate each class member’s economic loss, and so failed to satisfy Federal Rule of Civil Procedure 23(b)(3)’s requirement that common issues of law or fact predominate of issues affecting individual class members. The decision is significant because the Eighth Circuit did not view recent
On April 23, 2021, in
Ford v. TD Ameritrade Holding Corp.,
1 a panel of the U.S. Court of Appeals for the Eighth Circuit reversed a district court order certifying a class action alleging that TD Ameritrade committed securities fraud by failing to comply with the duty of best execution in executing customer orders. The decision deals a blow to securities class actions based on violations of a broker’s best execution obligation and highlights the difficulties investors face in certifying securities fraud claims outside a typical disclosure-based stock-drop case.
Background
The duty of best execution requires a broker-dealer to seek for its customer’s trade orders “the most favorable terms reasonably available under the circumstances.”
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Securities Litigation Update: Eighth Circuit Closes the Door on Securities Class Action Alleging Violation of Broker’s Duty of Best Execution, Highlighting Class Certification Challenges in Atypical Fraud Cases Friday, April 30, 2021
Ford v. TD Ameritrade Holding Corp.,
1 a panel of the U.S. Court of Appeals for the Eighth Circuit reversed a district court order certifying a class action alleging that TD Ameritrade committed securities fraud by failing to comply with the duty of best execution in executing customer orders. The decision deals a blow to securities class actions based on violations of a broker’s best execution obligation and highlights the difficulties investors face in certifying securities fraud claims outside a typical disclosure-based stock-drop case.
Fund collapse highlights instability
AFP, NEW YORK
The collapse of the Archegos Capital Management LLC fund last month is only the most recent example of how extreme liquidity can make financial markets more volatile and sometimes lead to bizarre outcomes.
Another dramatic instance came in late January, when shares of GameStop Corp skyrocketed following a buying frenzy coordinated by retail investors eager to defend the video game retailer from funds betting against it.
Shares of GameStop have since retreated, but the episode shined an uncomfortable light on online trading platforms and speculative investment funds involved in the financial melee.
The logo outside 888 7th Ave., a building that reportedly houses Archegos Capital, is pictured in the Manhattan borough of New York City on Monday last week.