Dave Motes

🚨BREAKING: $NWBO's spoofing lawsuit likely moves to discovery as magistrate recommends the motion to dismiss be GRANTED IN PART and DENIED IN PART. Magistrate Judge Stein recommended The Motion to Dismiss ("MTD") in the $NWBO spoofing case be DENIED IN PART and GRANTED IN PART.* "In sum, the Court concludes that: (1) the SAC sufficiently pleads loss causation with respect to the approximately 40 million shares of stock sold by NWBO at prices derived from closing prices on dates when Spoofing Episodes occurred; (2) the SAC fails to sufficiently plead a long-term, persistent negative impact on NWBO’s stock price, requiring dismissal of Plaintiff’s claims relating to the approximately 234 million other shares of stock sold during the Relevant Period; and (3) the SAC sufficiently pleads the elements of a manipulative act, scienter, and reliance." See Image 1. This means the case is likely to move on to the discovery phase as to the 40 million shares of stock $NWBO sold at depressed prices. This case holds enormous implications for the wider market which will be discussed in more detail below. The Defendant market makers are some of the biggest MMs in the world, including @VirtuFinancial and @citsecurities, among others. ➡️The Case Northwest Biotherapeutics, Inc v. Canaccord Genuity LLC, 1:22-cv-10185, (S.D.N.Y.) [1] First, I'll give a 50,000 foot view of the Case. Next, I'll identify the parties and give some thoughts on what this ruling could mean to those involved in the case and to the wider market. Lastly, in a follow up post, I'll review Magistrate Stein's Report and Recommendation in detail. ➡️The 50,000 foot view This is a case where $NWBO has alleged harm due to illegal share price manipulation by some of the biggest market makers in the world and their (likely) hedge fund clients so that they could make a dollar at the expense of real life cancer patients without any other treatment options. There has been no approved treatments for newly diagnosed glioblastoma for over two decades and these long suffering cancer patients are having to wait (with time they don't have) even longer for $NWBO's DCVax-L because of illegal market manipulation delaying its' access to the public. Glioblastoma is one of the most deadly forms of cancer. There are 12,000+ glioblastoma diagnoses per year in the United States according to the American Brain Tumor Association. [2] The recurrence rate is nearly 100%. [3] The peer-reviewed DCVax-L JAMA publication showed 25 of 232 newly diagnosed glioblastoma patients alive at five years who took $NWBO's DCVax-L whereas the external control population that didn't take DCvax-L showed zero patients alive at five years out of 1,366 patients. [3] See Image 2. Similar positive long term survival was seen with DCVax-L in recurrent glioblastoma patients. See Image 3. This means that for every year longer it takes for $NWBO's DCVax-L to hit the market 1,293 newly diagnosed glioblastoma patients in the United States will die an unnecessary death. Add in the UK, EU, Japan, and the RoW and that number is much much higher. That's the real life impact on cancer patients throughout the world and it doesn't even take into account the financial terror on the market, specifically $NWBO and its' investors. You can read more about the impact of spoofing on $NWBO's share price here: nitter.gq/hoffmann6383/status/18… ➡️What did @JoeMillerJr and the Financial Times think of $NWBO's spoofing case? "...huge if true" [4] ➡️Are $NWBO's allegation's true? Magistrate Stein is stating $NWBO's claim is plausible on its' face as to 40 million shares of stock and there is a reasonable inference that defendant is liable for the alleged misconduct. A jury will likely make the final determination as to the merits of the claims. “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 554, 570 (2007)). A claim is plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 566 U.S. at 678. [5] ➡️Plaintiff Northwest Biotherapeutics, Inc. ("NWBO") "NWBO is a clinical stage biotechnology company focused on the development of personalized cancer vaccines designed to treat a broad range of solid tumor cancers more effectively than current treatments, and without the side effects of chemotherapy, through a proprietary manufacturing technology which enables the Company to produce a personalized vaccine in an efficient and cost-effective manner." [6] $NWBO has submitted their Marketing Authorization Application for approval of DCVax-L in the UK for BOTH newly diagnosed and recurrent glioblastoma and are awaiting an approval decision: nwbio.com/northwest-biothera… ➡️Defendants Canaccord Genuity LLC @CG_Driven, Citadel Securities LLC @citsecurities, G1 Execution Services LLC, GTS Securities LLC, Instinet LLC, Lime Trading Corp. @LimeTrading_, and Virtu Americas LLC @VirtuFinancial ➡️Case Summary "Northwest Biotherapeutics (NWBO) claims that the market makers deliberately engaged in repeated manipulative spoofing of its stock from December 5, 2017 – August 1, 2022... During the Relevant Period, Defendants engaged in spoofing to manipulate the price of NWBO shares on OTC Link LLC and NYSE ARCA Global OTC, thus creating an imbalance in the market for NWBO shares and inducing other market participants to buy or sell at artificial prices. In order to carry out their spoofing scheme, Defendants placed tens of millions of Baiting Orders and executed millions of orders at manipulated prices during the Relevant Period. Indeed, Defendants engaged in spoofing on 395 of 1,171—or nearly 34%—of the trading days during the Relevant Period. Plaintiff NWBO sold over 274 million shares at manipulated prices as a result of Defendants’ actions, over 40 million shares of which were sold at the closing price on dates where Spoofing Episodes occurred. By repeatedly and brazenly manipulating the market through their spoofing, Defendants directly impacted the price of NWBO’s shares in the market, causing Plaintiff significant losses as it sold millions of shares of NWBO stock at artificially depressed prices." [7] ➡️Why are Defendant Market Makers and their hedge fund clients spoofing $NWBO Stock? One reason put forth by $NWBO and their lead attorney, Laura Posner, is for the purpose of a naked short covering scheme: "And like here, the plaintiff alleged that defendants sought to benefit from their spoofing by obtaining shares at below-market prices in order to cover short positions established through a related alleged scheme of naked short selling." (Emphasis added) [8] ➡️Do we know the potential number of $NWBO naked short shares? No. ➡️Who is $NWBO's lead attorney, Laura Posner? "Her cases include 6 of the top 100 securities fraud class action settlements of all time, including In re Wells Fargo, the 17th largest securities fraud recovery for investors ever." "Prior to joining the firm, Laura was appointed by the New Jersey Attorney General to serve as the Bureau Chief for the New Jersey Bureau of Securities – the top securities regulator in New Jersey. In that capacity, she was responsible for administrating and enforcing the New Jersey Uniform Securities Law and regulations thereunder, as well as managing and overseeing the employees who staff the Bureau of Securities." For more information about Laura Posner see: cohenmilstein.com/bio/laura-… ➡️What does the recommendation to deny the MTD likely mean?⭐️ ✅Judge Woods is very likely to adopt Magistrate Judge Stein's recommendation to deny the MTD ✅A denial of the MTD means the case moves on to discovery. ✅ Parties, including Hedge Funds, involved in spoofing will be identified. See: nitter.gq/hoffmann6383/status/17… ✅The hedge funds involved in said illegal behavior will be served subpoenas and any feeble attempts to dodge process servers will be dealt with by the courts: nitter.gq/hoffmann6383/status/17… ✅Hedge funds and market makers may obfuscate but they will ultimately have to turn over relevant trading records: nitter.gq/hoffmann6383/status/18… ✅Hedge funds, market makers and their agents manipulating $NWBO's share price, or colluding with those that do so, have been put on notice that their behavior is now under a microscope and subject to third party subpoenas: nitter.gq/hoffmann6383/status/18… @John_Hempton @MidwestHedgie @muddywatersre @AndrewTobias @adamfeuerstein ✅Spoofing experts have developed sophisticated algorithms to detect spoofing: nitter.gq/hoffmann6383/status/18… ✅Experts could discover much more spoofing incidents than what $NWBO listed in their Complaint once $NWBO obtains the trading data of Defendants and their hedge fund clients. Here is an example of another spoofing case where the expert discovered about 10x more spoofing incidents than what was initially listed in the complaint: nitter.gq/hoffmann6383/status/18… ✅While this is a civil case, spoofing is also a crime. Illegal behavior may be referred to the DoJ. People go to jail and pay large monetary fines for spoofing (in addition to any civil penalties): justice.gov/opa/pr/former-jp… ✅Plaintiffs will get to look under the hood of the various market makers including what programs they use to monitor illegal trading, i.e. Actimize at @MerrillLynch: nitter.gq/hoffmann6383/status/18… ✅The Market Makers' Scapegoat, Adam Feuerstein and @statnews, could be subpoenaed. For more information on how Market Makers use Mr. Feuerstein as cover in legal filings for illegal trading see: nitter.gq/hoffmann6383/status/17… ✅@adamfeuerstein and his employer @statnews, which is owned by the @BostonGlobe, could be looking at a deposition where they would have to answer questions as to Mr. Feuerstein's actions: nitter.gq/hoffmann6383/status/18… nitter.gq/hoffmann6383/status/18… ✅The Defendant Market Makers face significant liability in this spoofing case, including punitive damages. See: nitter.gq/hoffmann6383/status/17… ✅Fear of punitive damages is one of many reasons a market maker might settle. In fact, I believe we saw our first spoofing lawsuit settlement here: nitter.gq/hoffmann6383/status/18… ✅Copycat cases are likely to follow as Defendant's claim that this type of trading is "bedrock market-making activity" that is done in "virtually every stock in every trading venue across the country..." (emphasis added) "This is bedrock market-making activity that the Securities and Exchange Commission has explained is an “indispensable part of an efficient and liquid market.”3 Yet NWBO’s contrived theory would convert routine, regulated market making in virtually every stock in every trading venue across the country into securities fraud, flooding the courts with frivolous copycat lawsuits attempting to end-run the PSLRA, potentially upending the entire U.S. equity market system." [8] On the other hand, the Southern District of New York found Defendant Market Makers identified the Market Maker's trading to bear "all these indica of spoofing." "The FAC contains particularized factual allegations evincing all these indicia of spoofing." [9] ✅Doug Cifu (@Dougielarge, CEO of $VIRT) and @VirtuFinancial petitioned the SEC in July '24 to make it easier to delist companies under $1 under the guise they are looking out for the best interest of retail shareholders [10] while at the same time engaging in alleged rampant share price manipulation that is harmful to these same retail shareholders and executing 50%+ of trades in dark pools with zero transparency [11]. The same Doug Cifu that stated this lawsuit will be dismissed and end with Rule 11 sanctions against $NWBO. See Image 4. Mr. Cifu has always been, and will remain, grifter extraordinaire: nitter.gq/hoffmann6383/sta… *Note, the partial denial of the MTD is not final until Judge Woods' ruling, but he is very likely to follow Magistrate Stein's recommendation to deny the MTD. Judge Woods adopted in full the first Report & Recommendation by Magistrate Stein on the initial MTD. [1]courtlistener.com/docket/665… [2]abta.org/tumor_types/gliobla…. [3]jamanetwork.com/journals/jam… [4]ft.com/content/4fe0f032-07e5… [5]storage.courtlistener.com/re… [6]cohenmilstein.com/case-study… [7]Docket #115, courtlistener.com/docket/665…… [8]storage.courtlistener.com/re… [9]storage.courtlistener.com/re… [10]nitter.gq/hoffmann6383/status/18… [11]bloomberg.com/news/articles/… @SECGov @DevinNunes @realDonaldTrump @elonmusk $MMTLP $GME $AMC @JoeMillerJr @Justinbaer @KatrynaJill @pulte @PamBondi @Kash_Patel @TheJusticeDept