Citadel, Virtu, Susquehanna, and others are fighting a lawsuit from cancer research company Northwest Biotherapeutics (OTCMKTS:NWBO).
Others in the lawsuit include Canaccord Genuity LLC, G1 Execution Services LLC, GTS Securities LLC, Instinet LLC, and Lime Trading Corp.
Some retail investors might be familiar with a few of these names involved in the handling of their MMTLP shares, which developed into one of the biggest financial frauds on Wall Street.
Northwest Biotherapeutics has sued eight of the US’s largest market-making traders alleging they drove down its share price by placing sell orders they had no intention of executing, also known as ‘spoofing’.
The complaint, filed by Northwest Biotherapeutics in a federal court in New York on Thursday, claimed that the traders “deliberately engaged in repeated spoofing that interfered with the natural forces of supply and demand” by placing tens of millions of fake orders between December 2017 and August of last year.
Comments from Northwest Biotheraputics
The trading companies would then cancel those orders and buy Northwest’s shares at an artificially lower price, the complaint alleged.
Lawyers for the clinical-stage biotechnology firm claimed a “particularly egregious example” of this activity took place in May, after the publication of what they maintain were positive trial data for Northwest’s DCVax-L brain cancer drug.
The study’s design had been questioned by scientists, per FT.
The news “should have caused NWBO’s share price to increase, absent manipulation in the market”, they wrote, referring to the company’s stock symbol.
Instead, it dropped from $1.73 to a low of $0.3862.
“This staggering decline of 78 per cent in the price on a day with extremely positive news about the company was caused by defendants’ relentless and brazen manipulation of the market for NWBO shares,” lawyers at Cohen Milstein Sellers & Toll added.
Ken Griffin Objects to the Allegations
“This frivolous lawsuit appears to be nothing more than an attempt by Northwest Biotherapeutics to divert attention away from its long history of governance and management failures, SEC charges for financial reporting lapses, and lawsuits from its own shareholders,” Citadel Securities said in a statement.
“We intend to pursue any and all legal action against Northwest Biotherapeutics for making these false and baseless allegations, which only undermine the integrity of our capital markets,” the trading company added.
“It’s already underhanded to engage in market manipulation, but to do so at the expense of cancer patients, some of whom have no other treatments to place their hopes on, is unconscionable,” said Laura Posner, a partner at Cohen Milstein.
Retail investors are enraged by the continued scandals from Citadel and other market makers.
Citadel has a long history of market manipulation and fines.
“The game is not fair and it never has been. Individual investors, even when operating in a swarm, are destined to lose. How do I know? I helped design the game,” says ex-Citadel Data Scientist Patrick McConlogue.
Shares of NWBO stock are currently trading at $0.64, respectively.
The retail community wants to see some form of justice surrounding the lawsuit.
The U.S. government is treading a fine line waiving market injustices — the SEC recently scrapped plans to vote on a hedge fund transparency rule.
Plaintiffs File Motion to Dismiss
Today, Citadel and the defendants have filed a joint memorandum of law in support of motion to dismiss this case.
If the motion to dismiss is approved, retaliation from investors around the world may grow.
In January, Occupy SEC 2023 raised awareness of the market injustices the retail community has endured over the past years.
While the protest was peaceful, the neglect is hurting the lives of real people and there’s no telling just how far these events may eventually escalate to.
Investors on social media fear peaceful protests are no longer going to create an impact but rather through alternative means.
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