Case 1:21-md-02989-CMA Document 491 Entered on FLSD Docket 06/22/2022 Page 1 of 60
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF FLORIDA
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`CASE NO. 21-2989-MDL-ALTONAGA/Torres
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` 
`IN RE:
`
`JANUARY 2021 SHORT SQUEEZE
`TRADING LITIGATION
`_____________________________________/
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`This Document Relates to All Claims Included
`In the Other Broker Tranche
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`DEFENDANT APEX CLEARING CORPORATION’S RULE 12 MOTION TO DISMISS
`PLAINTIFFS’ (FOURTH) CLASS ACTION COMPLAINT AND INCORPORATED
`MEMORANDUM OF LAW
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`AMERICAS 114542987
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`Table of Contents
`INTRODUCTION .............................................................................................................. 1
`FACTUAL BACKGROUND ............................................................................................. 4
`ARGUMENT ...................................................................................................................... 9
`I.
`Plaintiffs’ Common Law Claims Must Be Dismissed ............................................ 9
`
`A.
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`B.
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`C.
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`This Court May Consider Only the Named Plaintiffs’ Claims ................. 10
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`If Necessary, Choice of Law Considerations Compel Application of Texas
`Law Where Apex Has Its Headquarters .................................................... 11
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`Plaintiffs’ Negligence Claim (Count I) Fails as a Matter of Law ............. 12
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`1.
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`2.
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`It Is Well-Established That a Clearing Broker Such as Apex Owes
`No Duty of Care to Meme Stock Speculators Such as Plaintiffs .. 14
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`Plaintiffs Fail to Allege a Standard of Care That Apex’s Conduct
`Could Have Breached with a Mid-Day, Few Hour Interruption in a
`Single Day’s Trading of Three Meme Stocks ............................... 18
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`D.
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`Plaintiffs Fail to State a Claim for Breach of Fiduciary Duty (Count II) . 23
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`1.
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`2.
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`3.
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`4.
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`5.
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`Apex, a Clearing Broker, Is Not a Fiduciary of Plaintiffs Chavez
`and Jang and Owes Them No Fiduciary Duty, as the Courts
`Universally Hold ........................................................................... 24
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`Apex Was Not Plaintiffs’ Agent ................................................... 24
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`Apex’s Status as a Registered Broker-Dealer Does Not Transform
`Apex’s Back-Office Services into a Fiduciary Relationship ........ 25
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`Plaintiffs’ Arms-Length Contracts with Apex Specifically Permit
`Apex to Act in Its Own Interest .................................................... 27
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`Apex Did Not Breach Any Fiduciary Duty by Refusing to Accept
`New Trades ................................................................................... 27
`
`E.
`
`F.
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`Plaintiffs Fail to State a Claim for Breach of the Implied Covenant of
`Good Faith and Fair Dealing (Count III) .................................................. 28
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`Plaintiffs Fail to State a Claim for Tortious Interference (Count IV) ....... 30
`
`1.
`
`Plaintiffs Fail to Allege “Willful and Intentional” Interference or
`“Wrongful Conduct” ..................................................................... 31
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`2.
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`3.
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`Plaintiffs Fail to Allege that Apex’s Introducing Brokers
`Contractually Were Forbidden from Declining to Open New
`Positions ........................................................................................ 31
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`Apex Was Permitted, as a Matter of Law, to Decline to Clear New
`Positions ........................................................................................ 32
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`G.
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`Apex’s Actions Did Not Proximately Cause Plaintiffs’ Alleged Injury (All
`Counts) ...................................................................................................... 33
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`II.
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`Plaintiffs Chavez and Jang Lack Article III Standing (All Counts) ..................... 36
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`A.
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`B.
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`C.
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`Plaintiffs Fail to Allege Injury in Fact Because Their Claims That They
`Would Have Sold Certain Meme Stocks at a Higher Price Are Speculative
`and Implausible ......................................................................................... 37
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`Plaintiffs Fail to Allege They Have a “Legally Protected Interest” in Lost
`Earnings Due to Plaintiffs’ Thwarted Meme Stock Scheme .................... 39
`
`Named Plaintiffs Lack Standing to Bring Claims on Behalf of a Class of
`Direct Customers Because Named Plaintiffs Are Not Direct Customers of
`Apex .......................................................................................................... 40
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`III.
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`This Action Is Pre-Empted by Federal Securities Laws Because Apex Is Subject
`to Active and Heavy Federal Regulation and Because the Duty That Plaintiffs
`Assert Against Apex Would Prove an Obstacle to the Uniform Federal Regulatory
`Regime in the Interstate Trading of Publicly-Listed Securities ............................ 41
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`IV.
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`The Claims of Plaintiffs Whose Brokers Did Not Use Apex as a Clearing Broker
`Must Be Dismissed ............................................................................................... 44
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`V. With 25,000 Pages Produced and Multiple Pleading Opportunities, the Fourth
`Complaint Should Be Dismissed with Prejudice .................................................. 44
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`CONCLUSION ................................................................................................................. 45
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`
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`TABLE OF AUTHORITIES
`
`CASES
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`Page(s)
`
`532 Madison Ave. Gourmet Foods, Inc. v. Finlandia Ctr., Inc.,
`96 N.Y.2d 280 (2001) ........................................................................................................14, 17
`
`7 W. 57th St. Realty Co., LLC. v. Citigroup, Inc.,
`771 Fed. App’x 498 (2d Cir. 2019) ..........................................................................................33
`
`Aaron Private Clinic Mgmt. LLC v. Berry,
`912 F.3d 1330 (11th Cir. 2019) .............................................................................36, 37, 38, 39
`
`Abad v. G4S Secure Sols. (USA), Inc.,
`293 So. 3d 26 (Fla. Dist. Ct. App. 2020) .................................................................................12
`
`Ala. Legis. Black Caucus v. Alabama,
`135 S. Ct. 1257 (2015) .............................................................................................................39
`
`Alvord & Swift v. Stewart M. Muller Constr. Co.,
`46 N.Y.2d 276 (1978) ..............................................................................................................32
`
`AMBAC Assur. Corp. v. U.S. Bank N.A.,
`328 F. Supp. 3d 141 (S.D.N.Y. 2018) ......................................................................................17
`
`Anton v. Merrill Lynch,
`36 S.W.3d 251 (Tex. App. 2001) .............................................................................................27
`
`Appert v. Morgan Stanley Dean Witter, Inc.,
`2009 WL 3764120 (N.D. Ill. Nov. 6, 2009) ............................................................................42
`
`Ashcroft v. Iqbal,
`556 U.S. 662 (2009) ...............................................................................................10, 21, 24, 32
`
`Baker v. Welch,
`735 S.W.2d 548 (Tex. App. 1987) ...........................................................................................31
`
`Banzhaf v. ADT Sec. Sys. Sw., Inc.,
`28 S.W.3d 180 (Tex. App. 2000) .............................................................................................22
`
`Barrow-Shaver Res. Co. v. Carrizo Oil & Gas, Inc.,
`590 S.W.3d 471 (Tex. 2019) ....................................................................................................28
`
`Beckwith v. Hart,
`263 F. Supp. 2d 1018 (D. Md. 2003) .......................................................................................13
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`
`
`Bell Atl. Corp. v. Twombly,
`550 U.S. 544 (2007) .................................................................................................................10
`
`Bly v. Whitehall,
`120 N.Y. 506 (1890) ................................................................................................................17
`
`Blyth v. White,
`49 G.A. App. 738, 832 (1934) .................................................................................................13
`
`Bodum USA, Inc. v. J.C. Penney Corp., Inc.,
`2019 Tex. App. LEXIS 9353 (Tex. App. Oct. 23, 2019).........................................................28
`
`Bos v. Smith,
`556 S.W.3d 293 (Tex. 2018) ....................................................................................................23
`
`Brenner v. Centurion Logistics LLC,
`2020 Tex. App. LEXIS 9810 (Tex. App. Dec. 14, 2020) ........................................................32
`
`Brink v. James,
`341 F. Supp. 3d 1314 (S.D. Fla. 2018) ....................................................................................15
`
`Browning-Ferris, Inc. v. Reyna,
`865 S.W.2d 925 (Tex. 1993) ..............................................................................................29, 30
`
`Bryant v. Dupree,
`252 F.3d 1161 (11th Cir. 2001) ...............................................................................................44
`
`Buckman Co. v. Plaintiffs’ Legal Comm.,
`531 U.S. 341 (2001) .................................................................................................................43
`
`Busch v. L.F. Rothschild & Co.,
`23 A.D.2d 189 (N.Y. Sup. Ct. App. Div. 1965) ..............................................13, 16, 22, 27, 31
`
`Cantor Fitzgerald Assocs., L.P. v. Tradition N. Am., Inc.,
`749 N.Y.S.2d 249 (N.Y. Sup. Ct. App. Div. 2002) .................................................................32
`
`Capital Options Invest., Inc. v. Goldberg Bros. Commodities, Inc.,
`958 F.2d 186 (7th Cir. 1992) ...................................................................................................20
`
`Capital Options Invs., Inc. v. Goldberg Bros. Commodities,
`1990 U.S. Dist. LEXIS 14736 (N.D. Ill. Nov. 5, 1990) ....................................................13, 31
`
`Carvel Corp. v. Noonan,
`3 N.Y.3d 182 (2004) ................................................................................................................30
`
`Champlain Enterprises, Inc. v. United States,
`945 F. Supp. 468 (N.D.N.Y. 1996) ..........................................................................................12
`
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`Chapman v. DePuy Orthopedics, Inc.,
`760 F. Supp. 2d 1310 (M.D. Fla. 2011) ...................................................................................12
`
`Chase Manhattan Bank v. N.H. Ins. Co.,
`193 Misc. 2d 580 (N.Y. Sup. Ct., N.Y. Cnty. 2002)................................................................11
`
`Coleman v. Equitable Real Estate Inv.,
`971 S.W.2d 611 (Tex. App.—Dallas 1998).............................................................................35
`
`Costa v. Kerzner Int’l Resorts Inc.,
`2011 US Dist. LEXIS 66921 (S.D. Fla. June 23, 2011) ..........................................................12
`
`Courtland v. Walston & Co., Inc.,
`340 F. Supp. 1076 (S.D.N.Y. 1972) .............................................................................13, 16, 22
`
`Crosby v. Nat’l Foreign Trade Council,
` 530 U.S. 363 (2000) ................................................................................................................40
`
`Dallas v. Maxwell,
`248 S.W. 667 (Tex. 1923) ........................................................................................................22
`
`Day v. Taylor,
`400 F.3d 1272 (11th Cir. 2005) ...............................................................................................15
`
`de Kwiatkowski v. Bear, Steanrs & Co.,
`306 F.3d 1293 (2d Cir. 2002).................................................................................24, 25, 26, 27
`
`Default Proof Credit Card Sys. Inc. v. State Street Bank & Trust Co.,
`753 F. Supp. 1566 (S.D. Fla. 1990) .........................................................................................12
`
`Dercole v. Divico Fin of Am.,
`2005 U.S. Dist. LEXIS 59757 (E.D.N.Y. 2005) ................................................................23, 39
`
`Dixon v. Allergan United States,
`2015 U.S. Dist. LEXIS 198315 (S.D. Fla. Apr. 2, 2015) ........................................................24
`
`Doe v. Boys Clubs,
`907 S.W.2d 472 (Tex. 1995) ....................................................................................................22
`
`Dunn v. Calahan,
`2008 Tex. App. LEXIS 9498 (Tex. App. Dec. 17, 2008) ........................................................29
`
`Dunn v. New York,
`29 N.Y.2d 313 (1971) ........................................................................................................32, 33
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`Duradil, L.L.C. v. Dynomax Drilling Tools, Inc.,
`516 S.W.3d 147 (Tex. App. 2017) .....................................................................................30, 31
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`EBC I, Inc. v. Goldman Sachs & Co.,
`5 N.Y.3d 11 (2005) ..................................................................................................................29
`
`Espinoza v. Countrywide Home Loans Servicing, L.P.,
`2014 U.S. Dist. LEXIS 107263 (S.D. Fla. Aug. 5, 2014) ........................................................44
`
`Fernandez v. Sch. Bd. of Miami-Dade Cnty.,
` 201 F. Supp. 3d 1353 (S.D. Fla. 2016) ...................................................................................39
`
`Fin. One Pub. Co. Ltd. v. Lehman Bros. Special Fin., Inc.,
`414 F.3d 325 (2d Cir. 2005).....................................................................................................11
`
`First United Pentecostal Church of Beaumont v. Parker,
`514 S.W.3d 214 (Tex. 2017) ....................................................................................................23
`
`Fox v. Lifemark Sec. Corp.,
`84 F. Supp. 3d 239 (W.D.N.Y. 2015) ................................................................................14, 24
`
`French v. Bache Halsey Stuart, Inc.,
`Comm. Fut. L. Rep. ¶ 20,444 (C.F.T.C. 1977) ........................................................................13
`
`Friendswood Dev. Co. v. McDade & Co.,
`926 S.W.2d 280 (Tex. 1996) ....................................................................................................32
`
`Geier v. Am. Honda Co.,
`529 U.S. 861 (2000) .....................................................................................................40, 42, 43
`
`Glob. Enter. Grp. Holding, S.A. v. Ottimo,
`2010 U.S. Dist. LEXIS 145126 (E.D.N.Y. June 8, 2010) .......................................................24
`
`Goldberger v. Bear, Stearns & Co.,
`2000 U.S. Dist. LEXIS 18714 (S.D.N.Y. 2000) ......................................................................10
`
`Gonzalez v. Acosta,
`2001 Tex. App. LEXIS 5623 (Tex. App. Aug. 16, 2001) .......................................................20
`
`Greater Houston Transp. Co. v. Phillips,
`801 S.W.2d 523 (Tex. 1990) ....................................................................................................32
`
`Griffin v. Dugger,
`823 F.2d 1476 (11th Cir. 1987) ...............................................................................................39
`
`Guard-Life Corp. v. S. Parker Hardware Mfg. Corp.,
`50 N.Y.2d 183 (1980) ..............................................................................................................29
`
`Hand v. Dean Witter Reynolds Inc.,
`889 S.W.2d 483 (Tex. App. 1994) ................................................................................... passim
`
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`Hill v. Heritage Res., Inc.,
`964 S.W.2d 89 (Tex. App. 1997) .............................................................................................32
`
`Holmes v. Newman,
`2017 Tex. App. LEXIS 6177 (Tex. App. July 6, 2017) .....................................................25, 27
`
`Horsley v. Feldt,
`304 F.3d 1125 (11th Cir. 2002) .................................................................................................6
`
`Humble Sand & Gravel, Inc. v. Gomez,
`146 S.W.3d 170 (Tex. 2004) ....................................................................................................22
`
`Hux v. S. Methodist Univ.,
`819 F.3d 776 (5th Cir. 2016) ...................................................................................................29
`
`In re Brinker Data Incident Litig.,
`2020 U.S. Dist. LEXIS 247918 (M.D. Fla. Jan. 27, 2020) ......................................................10
`
`In re Cadwallder,
`2007 Bankr. LEXIS 2260 (Bankr. S.D. Tex. June 28, 2007) ..................................................19
`
`In re Catanella & E.F. Hutton & Co., Inc. Sec. Litig.,
`583 F. Supp. 1388 (E.D. Pa. 1984) ..........................................................................................34
`
`In re Series 7 Broker Qualification Exam Scoring Litig.,
`510 F. Supp. 2d 35 (D.D.C. 2007) .....................................................................................14, 41
`
`Int’l Primate Prot. League v. Adm’rs of Tulane Educ. Fund,
`500 U.S. 72 (1991) ...................................................................................................................39
`
`Jim Walter Homes, Inc. v. Reed,
`711 S.W.2d 617 (Tex. 1986) ....................................................................................................16
`
`Kinsey v. N.Y. Times Co.,
`991 F.3d 171 (2d Cir. 2021).....................................................................................................11
`
`La Grasta v. First Union Sec., Inc.,
`358 F.3d 840 (11th Cir. 2004) .................................................................................................35
`
`LAN/STV v. Martin K. Eby Constr. Co.,
`435 S.W.3d 234 (Tex. 2014) ....................................................................................................16
`
`Larsen v. Citibank FSB,
`871 F.3d 1295 (11th Cir. 2017) ...............................................................................................11
`
`Laub v. Faessal,
`297 A.D.2d 28 (N.Y. Sup. Ct. App. Div. 2002) ......................................................................32
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`Levitt v. J.P. Morgan Sec., Inc.,
`710 F.3d 454 (2d Cir. 2013).....................................................................................................23
`
`Lujan v. Defenders of Wildlife,
`504 U.S. 555 (1992) .................................................................................................................36
`
`Md. Cas. Co. v. Cont’l Cas. Co.,
`332 F.3d 145 (2d Cir. 2003).....................................................................................................11
`
`Merrill Lynch, Pierce, Fenner & Smith Inc. v. Dabit,
`547 U.S. 71 (2006) .....................................................................................................................4
`
`Meyer v. Cathey,
`167 S.W.3d 327 (Tex. 2005) ..............................................................................................23, 28
`
`Mintz Fraade Law Firm, P.C. v. Fed. Ins. Co.,
`193 A.D.3d 654 (N.Y. Sup. Ct. App. Div. 2021) ....................................................................31
`
`Mishkin v. Ensminger (In re Adler, Coleman Clearing Corp.),
`247 B.R. 51 (Bankr. S.D.N.Y. 1999) ...........................................................................18, 19, 35
`
`MM&S Fin., Inc. v. Nat’l Ass’n of Sec. Dealers, Inc.,
`364 F.3d 908 (8th Cir. 2004) ...................................................................................................42
`
`Murphy v. Am. Home Prods. Corp.,
`58 N.Y.2d 293 (1983) ..............................................................................................................28
`
`Mut. Pharm. Co. v. Bartlett,
`570 U.S. 472 (2013) .................................................................................................................40
`
`NBT Bancorp Inc. v. Fleet/Norstar Fin. Grp., Inc.,
`87 N.Y.2d 614 (1996) ........................................................................................................30, 31
`
`New Orleans Emplrs. Int’l Longshoremen’s Ass’n v. Mercer Inv. Consultants,
`635 F. Supp. 2d 1351 (N.D. Ga. 2009) ....................................................................................35
`
`Oddo Asset Mgm’t v. Barclays Bank PLC,
`19 N.Y.3d 584 (2012) ............................................................................................23, 26, 31, 32
`
`Otis Eng’g Corp. v. Clark,
`668 S.W.2d 307 (Tex. 1983) ..............................................................................................17, 22
`
`Padula v. Lilarn Properties Corp.,
`84 N.Y.2d 519 (N.Y. 1994) .....................................................................................................11
`
`Palsgraf v. Long Island R. Co.,
`248 N.Y. 339 (1928) ..................................................................................................................2
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`Parm v. Nat’l Bank of Cal., N.A.,
`242 F. Supp. 3d 1321 (N.D. Ga. 2017) ..............................................................................10, 31
`
`Perret v. Wyndham Vacation Resorts, Inc.,
`846 F. Supp. 2d 1327 (S.D. Fla. 2012) ....................................................................................33
`
`PLIVA, Inc. v. Mensing,
`564 U.S. 604 (2011) .................................................................................................................42
`
`Pulka v. Edelman,
`40 N.Y.2d 781 (N.Y. 1976) .....................................................................................................12
`
`Quiroz v. Alcoa Inc.,
`416 P.3d 824 (Ariz. 2018)........................................................................................................12
`
`Read v. Scott Fetzer Co.,
`990 S.W.2d 732 (Tex. 1998) ....................................................................................................14
`
`Riggs v. Schappell,
`939 F. Supp. 321 (D.N.J. 1996) ...........................................................................................5, 12
`
`Ross v. Bolton,
`904 F.2d 819 (2d Cir. 1990).....................................................................................................12
`
`Rozsa v. May Davis Grp., Inc.,
`187 F. Supp. 2d 123 (S.D.N.Y. 2002) ..........................................................................12, 14, 24
`
`Schlueter v. Latek,
`683 F.3d 350 (7th Cir. 2012) ...................................................................................................38
`
`Scott v. Watson,
`359 A.2d 548 (Md. 1976) ........................................................................................................12
`
`Secs. & Exch. Comm’n v. Aaron et al.,
`No. 1:15-cv-05704 (S.D.N.Y. Jul. 21, 2015) ...........................................................................38
`
`SFM Holdings, Ltd. v. Banc of Am. Sec., LLC,
`600 F.3d 1334 (11th Cir. 2010) ...............................................................................................26
`
`Solomon v. New York,
`66 N.Y.2d 1026 (1985) ............................................................................................................12
`
`Stag Canon Fuel Co. v. Rose,
`145 S.W. 677 (Tex. App. 1912) ...............................................................................................20
`
`Sterner v. Marathon Oil Co.,
`767 S.W.2d 686 (Tex. 1989) ..............................................................................................29, 30
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`Strategic Income Fund, L.L.C. v. Spear, Leeds & Kellogg Corp.,
`305 F.3d 1293 (11th Cir. 2002) .............................................................................14, 24, 25, 30
`
`Suez Water N.Y., Inc. v. E.I. du Pont de Nemours & Co.,
`2022 U.S. Dist. LEXIS 1483 (S.D.N.Y. 2022) ........................................................................33
`
`Texas Bank & Trust Co. v. Moore,
`595 S.W.2d 502 (Tex. 1980) ..............................................................................................23, 24
`
`Tokyo Gwinnett, LLC v. Gwinnett Cty.,
`940 F.3d 1254 (11th Cir. 2019) ...............................................................................................37
`
`Travis v. Mesquite,
`830 S.W.2d 94 (Tex. 1992) ................................................................................................33, 35
`
`Turk v. Pershing LLC,
`2014 U.S. Dist. LEXIS 190624 (N.D. Tex. Dec. 8, 2014) ......................................................12
`
`Turk v. Pershing LLC,
`2014 US Dist. LEXIS 190624 (N.D. Tex. Dec. 8, 2014) ........................................................14
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`Turman v. POS Partners, LLC,
`541 S.W.3d 895 (Tex. App. 2018) ...........................................................................................23
`
`Union Pac. R.R. Co. v. Nami,
`498 S.W.3d 890 (Tex. 2016) ....................................................................................................30
`
`Union Pump Co. v. Allbritton,
`898 S.W.2d 773 (Tex. 1995) ....................................................................................................33
`
`United Scaffolding, Inc. v. Levine,
`537 S.W.3d 463 (Tex. 2017) ....................................................................................................14
`
`Valelly v. Merrill Lynch, Pierce, Fenner & Smith Inc.,
`464 F. Supp. 3d 634 (S.D.N.Y. 2020) ..........................................................................14, 24, 25
`
`Varghese v. Singh,
`265 A.D.2d 322 (N.Y. Sup. Ct. App. Div. 1999) ....................................................................32
`
`Ventricelli v. Kinney Sys. Rent A Car, Inc.,
`45 N.Y.2d 950 (1978) ..............................................................................................................32
`
`W. Invs., Inc. v. Urena,
`162 S.W.3d 547 (Tex. 2005) ....................................................................................................32
`
`Warth v. Seldin,
`422 U.S. 490 (1975) .....................................................................................................10, 31, 39
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`Weatherly v. Pershing,
`2015 U.S. Dist. LEXIS 197128 (N.D. Tex. June 23, 2015) ............................................ passim
`
`Wilcox v. Wilcox,
`2006 Tex. App. LEXIS 11106 (Tex. App. Dec. 28, 2006) ......................................................26
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`STATUTES AND RULES
`
`17 C.F.R. § 240.15c3-1 ..................................................................................................7, 18, 19, 42
`
`17 C.F.R. § 240.17Ad-22 (2020) ...............................................................................................7, 18
`
`15 U.S.C. § 78q ........................................................................................................................40, 42
`
`15 U.S.C. § 78s(g)....................................................................................................................41, 42
`
`Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 ........................................7
`
`FINRA Rule 4311 ......................................................................................................................6, 26
`
`Securities Exchange Act of 1934 ...................................................................................................40
`
`U.S. Const., Article VI, cl. 2 ..........................................................................................................40
`
`MISCELLANEOUS
`
`Henry Minnerop, Clearing Arrangements, 58 BUS. LAW. 917 (May 2003) ..................................24
`
`Henry Minnerop, Role and Regulation of Clearing Brokers - Revisited, 75 BUS. LAW. 2201
`(2020) ............................................................................................................................... passim
`
`The Highwayman’s Case, 9 L. Q. Rev. 197 (1983) .......................................................................38
`
`Nathaniel Popper, et al., The Silicon Valley Start-Up That Caused Wall Street Chaos, The New
`York Times (Jan. 30, 2021) .....................................................................................................18
`
`NSCC Rule 4, § 8.............................................................................................................................8
`
`U.S. Dep't of the Treas., 2012 Annual Rep., Appendix A: Designation of Systemically Important
`Financial Market Utilities (July 18, 2012), https://home.treasury.gov/system/
`files/261/here.pdf .......................................................................................................................7
`
`U.S. House Financial Servs. Comm. Majority Staff, Feb. 18, 2021, “Game Stopped? Who Wins
`and Loses When Short Sellers, Social Media, and Retail Investors Collide?” U.S. H. R.
`Comm. on Fin. Servs., at 4 (Feb. 15, 2021), available at https://financialservices.house.gov/
`uploadedfiles/hhrg-117-ba00-20210218-sd002.pdf ...................................................................5
`
`
`
`
`
`
`AMERICAS 114542987
`
`xi
`
`
`
`

`

`Case 1:21-md-02989-CMA Document 491 Entered on FLSD Docket 06/22/2022 Page 13 of 60
`
`
`
`U.S. Securities and Exchange Commission, SEC Suspends Trading in Multiple Issuers Based on
`Social Media and Trading Activity, Press Releases, (Feb. 26, 2021) available at
`https://www.sec.gov/news/press-release/2021-35 .....................................................................2
`
`U.S. Securities and Exchange Commission, Thinking About Investing in the Latest Hot Stock?:
`Understand the Significant Risks of Short-Term Trading Based on Social Media, Investor
`Alerts and Bulletins (Jan. 30, 2021) available at https://www.sec.gov/oiea/investor-alerts-
`and-bulletins/risks-short-term-trading-based-social-media-investor-alert ................................2
`
`
`
`
`
`
`AMERICAS 114542987
`
`xii
`
`
`
`

`

`Case 1:21-md-02989-CMA Document 491 Entered on FLSD Docket 06/22/2022 Page 14 of 60
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`
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`Plaintiffs Chavez and Jang’s Amended Class Action Complaint (the “Fourth Complaint”),
`Plaintiffs’ fourth bite at the apple following an attempted evasion of the MDL, largely mirrors the
`last complaint Plaintiffs filed in this Court. But, despite Plaintiffs’ additions in this round (adding
`a new claim for “Breach of the Implied Covenant of Good Faith and Fair Dealing” and finally
`acknowledging the existence of the parties’ binding customer agreements), and even with the
`benefit of voluminous pre-complaint discovery, Plaintiffs fail to state a claim for the same reasons
`Plaintiffs’ earlier complaints failed.
`This Court should dismiss the Fourth Complaint in its entirety for substantially the same
`reasons that Apex argued Plaintiffs’ Consolidated Amended Complaint should be dismissed (ECF
`No. 422), and for many of the same reasons that this Court dismissed the common law claims
`against Robinhood (ECF No. 453). Simply put, Plaintiffs’ common law claims should be
`dismissed because they depend on non-existent duties that would be at odds with the complex and
`comprehensive federal regulatory scheme governing the securities industry, and because the
`parties’ customer agreements unequivocally authorize Apex to engage in the challenged conduct.
`This Court also should dismiss Plaintiffs’ claims for lack of Article III stand