Harrington Global Opportunity Fund, Limited v. BofA Securities, Inc.

Background

CIBC World Markets Corp. and CIBC World Markets Inc., which the order calls the “CIBC Defendants,” asked the court to reconsider its February 9, 2022, opinion and order. That earlier order had granted in part and denied in part the CIBC Defendants’ motion to dismiss.

Standard for reconsideration

The court explained that reconsideration is available only when the moving party identifies an intervening change in controlling law, new evidence, or a need to correct a clear error or prevent manifest injustice. The court also emphasized that reconsideration is not a way to reargue issues, present new theories, or seek a second hearing on the merits.

Court’s analysis

The court found that the CIBC Defendants did not identify a change in controlling law, new evidence, a clear error, or manifest injustice. Instead, they repeated arguments previously presented and offered new theories.

The court declined to consider the CIBC Defendants’ standing argument because they raised it for the first time in the reconsideration motion. The earlier motion to dismiss had not been brought under the rule governing challenges to the court’s subject-matter jurisdiction, and the court held that reconsideration was not the proper vehicle for raising the standing issue for the first time.

The remaining arguments concerned loss causation—whether the alleged conduct caused the plaintiff’s losses—and scienter, meaning the required state of mind. The court held that these arguments did not justify reconsideration because they either relied on new arguments or failed to identify anything the court had overlooked.

The court noted that the CIBC Defendants conceded that the amended complaint adequately alleged spoofing conduct on at least four days in 2016. The amended complaint also alleged spoofing on 193 of 205 trading days during the relevant period, more than 100,000 spoofing events on those days, and effects that continued after individual spoofing events because the market did not immediately or fully return to its prior prices. The court had relied on and discussed those allegations when finding that the complaint adequately alleged scienter and loss causation as to each spoofing defendant.

The CIBC Defendants also made individualized arguments that their alleged spoofing did not occur near Harrington’s sales of Concordia shares and that Concordia’s stock price increased during their alleged activity. The court found that those arguments had not previously been made and that the cited pages did not support the CIBC Defendants’ claim that they had raised them earlier. The court also rejected their position that Harrington had to show that the CIBC Defendants’ conduct, considered alone, caused all of Harrington’s economic harm. The earlier opinion had addressed the alleged cumulative effect of the spoofing and stated that it would be improper at that stage to assume that one defendant contributed disproportionately to the alleged damages.

Ruling

Judge Lorna G. Schofield ordered that the CIBC Defendants’ motion for reconsideration was DENIED. The clerk was directed to close the motion at docket number 93.