Skadden represented Merrill Lynch in the U.S. Court of Appeals for the Second Circuit, which on December 3, affirmed the dismissal of a putative class action alleging collusion among certain financial institutions that serve as “prime brokers” in connection with short selling. Plaintiff-appellant Electronic Trading Group, LLC, a short seller, alleged that prime brokers arbitrarily had designated certain securities as “hard-to-borrow” and then fixed the price for borrowing them in violation of the Sherman Act. The district court had dismissed the complaint on the grounds that antitrust liability was impliedly precluded by federal securities laws.
Read a Skadden-authored client memo on the case here.