Deutsche Bank is vigorously fighting a spoofing lawsuit at the Illinois Northern District Court. This is indicated by a motion to dismiss filed by Deutsche Bank AG and Deutsche Bank Securities Inc.

Let’s note that the list of plaintiffs in this case includes: Rock Capital Markets, LLC; Atlantic Trading USA, LLC; Charles Herbert Proctor, III; Robert Charles Class A, L.P.; Todd Rowan; David Vecchione. The plaintiffs have brought a class action on behalf of “all persons or entities that transacted in Treasury Futures and/or Eurodollar Futures or Options on Treasury and/or Eurodollar Futures traded on a domestic exchange during the period beginning at least as early as January 1, 2013 and ending no earlier than December 31, 2013.”

The plaintiffs claim the alleged spoofing gives rise to private causes of action for manipulation in violation of the CEA (First Claim for Relief), for employing a manipulative device in violation of the CEA; (Second Claim for Relief), for vicarious liability in violation of the CEA (Third Claim for Relief), and for unjust enrichment (Fourth Claim for Relief).

Plaintiffs’ Consolidated Complaint claims that Deutsche Bank AG and Deutsche Bank Securities Inc unlawfully “spoofed” U.S. Treasury futures products and Eurodollar futures products during calendar year 2013. According to the defendants’ motion to dismiss, seen by FX News Group, the Consolidated Complaint fails to state any viable claim and should be dismissed.

Deutsche Bank argues that the Consolidated Complaint fails to plead any factual allegations to sustain a claim for manipulation/manipulative devices under the CEA. To bring a claim for manipulation/manipulative devices, the plaintiffs must allege that (1) Defendants possessed the ability to influence prices of EDFs or Treasury Futures, (2) an artificial price existed, (3) Defendants’ misconduct caused the artificial price to exist, and (4) Defendants specifically intended to cause that artificial price. Plaintiffs must also allege that they suffered actual damages from that artificial price.

Deutsche Bank says that the plaintiffs do not allege the defendants had the intent to, the ability to, or did in fact negatively affect any market prices, let alone that they suffered actual damages.

Plaintiffs’ CEA claims rest on references to a June 18, 2020 Commodity Future Trading Commission (CFTC) Order in which DBSI agreed to pay a $1.25 million fine to settle allegations of spoofing (without admitting or denying the facts alleged therein). Deutsche Bank notes that nothing in the CFTC Order shows (or even alleges) that DBSI had the power to create artificial prices, intended to or did affect prices of Treasury Futures or EDFs, or that any person was actually harmed.

In fact, the CFTC Order is limited to allegations of the spoofing provision of the CEA, not the manipulation provisions; the CFTC Order does not and cannot itself satisfy the requirements of a manipulation claim. Neither the CFTC Order nor the Consolidated Complaint contain factual allegations sufficient to sustain a private claim that the defendants violated the CEA, Deutsche Bank says.

In addition, Deutsche Bank states that, without any showing of an underlying CEA violation, the plaintiffs’ claims for vicarious liability and unjust enrichment also fail. The claim also fails because the Consolidated Complaint fails to allege harm or that any such harm was caused by or benefited any defendant.

Finally, Deutsche Bank says that the plaintiffs fail to allege that the defendants fraudulently concealed their alleged misconduct, providing no basis to toll the statute of limitations. Hence, according to the defendants, the complaint against them should be dismissed.