In re Platinum & Palladium Commodities Litigation
828 F. Supp. 2d 588
| S.D.N.Y. | 2011Background
- Putative class action alleging CEA, Sherman Act, and RICO violations from alleged manipulation of platinum/palladium futures (Oct 25, 2007 – Jun 6, 2008).
- CFTC issued an order against Moore Capital and Advisors after a settlement; order found a trading scheme known as “bang the close” involving Pia and MF Global as FCM.
- Plaintiffs allege Funds financed/manufactured the scheme through agents; relationship between Funds, Advisors, and Moore Defendants is inconsistent in the Complaint.
- Pia was Moore Capital’s head of execution; MF Global acted as the Moore Defendants’ futures commission merchant.
- Court granted in part and denied in part Defendants’ motion to strike; granted dismissal of some claims and allowed leave to replead.
- Court struck references to the CFTC Order, affecting key factual support for many claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether references to the CFTC Order should be struck. | Galan argues the Order is material to liability. | Defendants contend Lipsky bars reliance on the Order. | Partially granted; references stricken where they rely on the Order. |
| Whether the Sherman Act claim plausibly alleges a conspiracy. | Complaint shows a Moore Defendants–Pia–MF Global conspiracy. | Allegations show only agency/one-source control; no independent centers of decisionmaking. | Dismissed; lack of plausible agreement among independent actors. |
| Whether the CEA manipulation claim is adequately pled (intent, manipulation, causation). | Pia’s intent and CFTC findings show manipulation; Chevron deference requested. | Without the CFTC Order, intent and manipulation allegations fail. | Dismissed for lack of proven intent and because key findings were stricken. |
| Whether the Court should allow control person and respondeat superior theories. | Plaintiffs rely on agency law to extend liability. | Defendants contest control-person liability and private right of action under §13(b). | Respondeat superior viable for Pia and MF Global; control-person claim dismissed. |
| Whether RICO predicate acts and standing are adequately pled. | Allegations show pattern of racketeering; claims rely on CFTC Order. | Group pleading; predicate acts not tied to individual defendants. | RICO predicate acts dismissed; standing unresolved due to reliance on stricken material. |
Key Cases Cited
- Lipsky v. Commonwealth United Corp., 551 F.2d 887 (2d Cir. 1976) (references to agency settlements immaterial under Rule 12(f))
- United States v. Gilbert, 668 F.2d 94 (2d Cir. 1981) (consent judgments not admissible to prove liability; Rule 408 applies)
- In re Amaranth Natural Gas Commodities Litig., 587 F.Supp.2d 513 (S.D.N.Y. 2008) (articulates CFTC manipulation elements and liability framework)
- In re Sulfuric Acid Antitrust Litig., 743 F.Supp.2d 827 (N.D. Ill. 2010) (concerted action/§1 analysis for related entities)
- Guttman v. Commodity Futures Trading Comm’n, 197 F.3d 33 (2d Cir. 1999) (principal-agent liability under CEA; agency suffices for liability)