With Dismissal of Another Set of Major High-Frequency Trading Suits, Litigation Risk From Providing Fast Data and Other Services to High-Frequency Traders Fades

August 28, 2015

Judge Jesse Furman of the United States District Court for the Southern District of New York on Wednesday dismissed all claims in five consolidated suits against several U.S. stock exchanges and a dark pool operator. The suits alleged violations of federal and state law arising out of defendants’ facilitation of high-frequency trading (“HFT”). The Decision is the latest in a string of defeats for plaintiffs who have brought suit in the wake of the publication of Michael Lewis’s book Flash Boys, which portrayed high-frequency trading as a rigged game that enriched Wall Street trading firms at the expense of institutional and retail investors. While the plaintiffs can appeal and one of the plaintiffs may seek leave to amend its complaint, the decision represents a substantial diminution of the risk stock exchanges and dark pool operators face from private litigants for enabling HFT.

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