A lawsuit can be a huge problem for a business in New York. Not only are lawsuits costly and time consuming, they can also result in damaged reputations in the community. In some cases, litigation by another business is unwarranted. With the right approach, businesses might be able to get the lawsuit dismissed and put the incident behind them.
In other situations, business litigation may have to move forward in order to be resolved. For example, in a recent New York case a judge refused to dismiss a case for a company. The lawsuit is between a trading company and New York’s attorney general.
In the case, the attorney general claims that Barclays Plc’s violated the Martin Act through its use of dark pool trading. Dark pool trading allows small groups of sophisticated traders to trade shares before trades were released to the open market. These high-speed trading is highly regulated by the state — including under the Martin Act, which prohibits fraud in these situations.
In the case, the state claims that Barclays lied to investors that were engaging in dark pool trading between 2012 and 2014. These misrepresentations were apparently over the use of certain algorithms. Barclays asked that the lawsuit be dismissed.
The judge dismissed one of the state’s claims, but refused to dismiss the claims involving the Martin Act. However, the judge made it clear that the attorney general needed to present concrete evidence in order for this claim to be successful.
When businesses face litigation — like Barclays in this case — they need to explore all of their legal options. While aggressively defending against the lawsuit may be the best option in some cases, others may require settlement.
Source: Reuters, “Barclays fails to win dismissal of NY ‘dark pool’ lawsuit,” Jonathan Stempel, Feb. 13, 2015