Article: UBS refuses to produce trading data in HFT market manipulation case

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UBS refuses to produce trading data in HFT market manipulation case

Maria Nikolova, 26 November 2020

A landmark securities class action case involving allegations of market manipulation via high frequency trading (HFT) continues at the New York Southern District Court. The latest dispute in this case, which targets major US stock exchanges, concerns trading data. In particular, the plaintiffs in this case – a group of investors, allege that UBS Securities has to provide them with a decent volume of trade data. UBS, which is not a party to the litigation, says it does not have to do that.

On November 25, 2020, UBS Securities filed a Letter with the Court, requesting that the plaintiffs’ motion to compel it to produce a heavy volume of trade data be denied.

Let’s recall that this lawsuit was filed on behalf of investors that traded on a registered public stock exchange or a U.S.-based alternate trading venue, between April 18, 2009 and the present, and asserted claims against: (1) registered public stock exchanges located in the United States; (2) a class of brokerage firms; and (3) a class of HFT firms.

The plaintiffs claim, inter alia, that certain defendants allowed HFT firms to profit at the expense of the class and to manipulate securities markets in violation of federal securities laws.

Earlier in November, the plaintiffs requested a discovery conference regarding what they called “UBS’s failure to produce trading data responsive to Plaintiffs’ subpoena served in November 2019 (the “Subpoena”)”. Specifically, the plaintiffs seek an order from the Court compelling UBS to produce trading data related to Plaintiffs’ orders and executions on the Defendant-Exchanges.

On November 25, 2020, UBS replied, explaining that the plaintiffs are seeking to compel the production of massive amounts of trade data associated with orders sent by the plaintiffs’ third-party investment advisors.

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