A spoofing lawsuit targeting Merrill Lynch Commodities, Bank of America Corporation, and Morgan Stanley & Co may be revived as the plaintiffs have made it clear that they will challenge the dismissal of the case.

Less than a month after Judge Lewis J. Liman of the New York Southern District Court signed a Memorandum & Opinion granting the defendants’ motion to dismiss a complaint accusing them of market manipulation via a practice known as spoofing, the plaintiffs have filed a notice of appeal with the Court.

On April 2, 2021, the plaintiffs in this case – Yuri Alishaev, Robert Charles Class A, L.P., Gamma Traders – I LLC, Abraham Jeremias, Morris Jeremias, Michael Patterson, Robert L. Teel, Vega Traders LLC, submitted a notice stating that they appeal to the United States Court of Appeals for the Second Circuit from the District Court’s March 4, 2021 Opinion and Order and March 4, 2021 Judgment dismissing this action.

Let’s recall that, in this action, the plaintiffs allege that the defendants unlawfully and intentionally manipulated the price of contracts for COMEX Gold Futures, COMEX Silver Futures, NYMEX Platinum Futures, and NYMEX Palladium Futures and options on those futures contracts traded on the New York Mercantile Exchange (NYMEX) and the Commodity Exchange, Inc. (COMEX) from January 1, 2007 through December 31, 2014. According to the complaint, the defendants violated the Commodity Exchange Act, 7 U.S.C. §§ 1, et seq. (the CEA), and the common law.

On March 4, 2021, however, the Court sided with the defendants.

The Court noted that the plaintiffs avoid pleading that, on the dates there were spoof trades, they traded after the spoof. Given the specificity of the information available to the plaintiffs in terms of the date and time of a trade, the only plausible inference is that they traded before the spoof, the Court concludes. If they traded after and proximate to the spoof, there is no reason for them not to have alleged it.

And, if their trades all occurred before the spoof, there is no plausible inference that the trade took place at a price that was artificially impacted as a result of the spoof.

The Court also found no basis for an inference that the plaintiffs were harmed as a result of the defendants’ alleged manipulation as opposed to having been benefitted. Therefore, the plaintiffs’ allegations that their trades occurred on the same days as the spoofs cannot establish, without more, that they suffered harm resulting from the alleged CEA violation.

Defendants’ motion to dismiss the unjust enrichment claim was also granted. The defendants argue that the plaintiffs’ claim for unjust enrichment must be dismissed because the plaintiffs have not alleged that they transacted directly with the defendants. The Court agreed with the defendants.