A proposed class of investors urged a Manhattan federal magistrate judge Thursday to reject a computerized trading firm's attempt to again duck a suit claiming it manipulated the prices of Korean futures contracts, saying the firm's foreign trades are not exempt from U.S. law.
Investors told U.S. Magistrate Judge Gabriel W. Gorenstein that Tower Research Capital LLC’s dismissal bid ignores the Second Circuit's precedential holding that the South Korea-originated trades allegedly falsified to manipulate Korean futures contracts on the Chicago Mercantile Exchange Globex Platform, fall under — and violate — the Commodity Exchange Act.
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U.S. District Judge Kimba M. Wood ruled in February 2017 that Tower Research’s trades were not subject to the CEA because CME Globex isn’t a registered exchange. A unanimous Second Circuit panel in 2018, however, vacated the lower court’s ruling and ruled that the firm was liable for its trades, as they were not outside the CEA's purview.
The investors also said Tower Research’s bid to escape the suit fails not only because of binding appellate precedent, but also because of Commodity Futures Trading Commission policy and the CEA Rulebook itself.
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The investors are represented by Michael Benjamin Eisenkraft, Richard A. Speirs, Jessica Kim, Daniel Stephen Sommers, Allen Dreschel and John Douglas Richards of Cohen Milstein Sellers & Toll PLLC and Youngki Rhee of the DeRyook International Law Firm.
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