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US Cancer Drug Company Accuses Market Makers of Stock Spoofing

Financial Times

December 1, 2022

Northwest Biotherapeutics claims Citadel Securities, Virtu and others drove down its share price

A cancer-focused biotechnology company has sued eight of the US’s largest market making traders including Citadel Securities, Susquehanna and Virtu, alleging that they deliberately drove down its share price by placing sell orders they had no intention of executing.

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 this year.

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 positive trial data for Northwest’s DCVax-L brain cancer drug.

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.

. . .

“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.

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