Case 1:20-cv-04389 Document 1 Filed 06/09/20 Page 1 of 58
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
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`Case No:
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`COMPLAINT
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`x:::::::::::
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`ARCESIUM LLC,
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`v.
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`Plaintiff,
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`ADVENT SOFTWARE, INC. and SS&C
`TECHNOLOGIES HOLDINGS, INC.,
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`Defendants.
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`Arcesium LLC (“Arcesium”) brings this complaint against Advent Software, Inc.
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`(“Advent” d/b/a SS&C Advent) and SS&C Technologies Holdings, Inc. (“SS&C” and, together
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`with Advent, “Defendants”).
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`TABLE OF CONTENTS
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`Page
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`Introduction: Defendants’ Anticompetitive And Unlawful Conduct.............................................. 3
`Parties.............................................................................................................................................. 5
`Jurisdiction And Venue................................................................................................................... 5
`Facts ................................................................................................................................................ 6
`Relevant Markets And Market Power ........................................................................................ 6
`Arcesium And The Arcesium Platform .................................................................................... 10
`Defendants’ Market Dominance............................................................................................... 12
`The 2015 Agreement: Arcesium Gains The Right To Sell Advent’s Geneva Software
`To Arcesium’s Customers, Including Broad Continuation Rights For The Use Of
`Geneva If The Agreement Ends................................................................................................ 17
`Defendants Declare They Will Let The 2015 Agreement Expire, Then Demand
`Oppressive And Anticompetitive Terms To Renew It And Impede Arcesium’s Efforts
`To Compete............................................................................................................................... 21
`Defendants Purport To Terminate Arcesium’s Continuation Rights, And Arcesium’s
`Right To Support Its Own Customers....................................................................................... 28
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`Case 1:20-cv-04389 Document 1 Filed 06/09/20 Page 2 of 58
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`Defendants Make, Then Breach, An Agreement To Renew The Geneva License Of A
`Major Arcesium Customer........................................................................................................ 31
`Causes Of Action .......................................................................................................................... 34
`COUNT I Violation Of Section 1 Of The Sherman Act, 15 U.S.C. § 1................................... 34
`COUNT II Violation Of Section 2 Of The Sherman Act, 15 U.S.C. § 2
`(Monopolization) ...................................................................................................................... 37
`COUNT III Violation Of Section 2 Of The Sherman Act, 15 U.S.C. § 2 (Attempted
`Monopolization)........................................................................................................................ 40
`COUNT IV Violation Of Section 3 Of The Clayton Act, 15 U.S.C. § 14 ............................... 44
`COUNT V Violation Of New York Donnelly Act, N.Y. Gen. Bus. Law. § 340 ..................... 47
`COUNT VI Breach Of Contract (2015 Agreement)................................................................. 50
`COUNT VII Breach Of Contract (Firm E Renewal Agreement) ............................................. 52
`COUNT VIII Tortious Interference With Contract .................................................................. 53
`COUNT IX Tortious Interference With Prospective Economic Advantage ............................ 54
`COUNT X Unfair Competition And Unfair Trade Practices, N.Y. Gen. Bus. Law
`§ 349 ......................................................................................................................................... 55
`Prayer For Relief........................................................................................................................... 56
`Jury Demand ................................................................................................................................. 58
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`Case 1:20-cv-04389 Document 1 Filed 06/09/20 Page 3 of 58
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`Introduction: Defendants’ Anticompetitive And Unlawful Conduct
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`1.
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`Defendants and Arcesium compete to provide middle- and back-office post-trade
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`technology support solutions to asset managers, notably to major hedge funds and hedge fund
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`administrators. This lawsuit challenges Defendants’ attempts to prevent and destroy competition
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`in this industry. Defendants’ actions violate the antitrust laws, the laws against interference with
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`business relations, and Arcesium’s contractual rights.
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`2.
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`Defendants offer accounting software known as Geneva that is widely used by
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`asset managers. Arcesium and Advent entered into a “Reseller Agreement” in 2015 (the “2015
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`Agreement”), allowing Arcesium to resell Geneva by integrating it into the solutions that
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`Arcesium offers its customers. The 2015 Agreement eliminated the need for Arcesium’s
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`customers to negotiate with Defendants for their own licenses to use Geneva. It also allowed
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`Arcesium’s customers to take advantage of Arcesium’s superior post-trade solutions while
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`relying on Arcesium for service and support of Geneva.
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`3.
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`Crucially, the 2015 Agreement grants Arcesium robust rights to continue
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`providing Geneva and support for Geneva to its existing customers should the 2015 Agreement
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`expire or be terminated (the “Continuation Rights”). The Continuation Rights were and are
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`business-critical for Arcesium and its customers, because changing from one accounting
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`software solution to another is extremely difficult and disruptive for an asset manager. Such a
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`change would disrupt not only the customer’s portfolio accounting, but also its ability to perform
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`post-trade tasks that draw on the customer’s accounting information. The Continuation Rights
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`thus provide a critical contractual guarantee to Arcesium and its customers that they can avoid
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`such difficulty and disruption.
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`Case 1:20-cv-04389 Document 1 Filed 06/09/20 Page 4 of 58
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`4.
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`Defendants’ publicly stated goal is to “take over the world” and be “the world’s
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`dominant platform” for post-trade technology solutions.1 Consistent with that goal, Defendants
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`have adopted a strategy that seeks to undermine Arcesium’s ability to compete and would
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`destroy Arcesium’s Continuation Rights. Specifically:
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`
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`
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`
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`
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`
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`5.
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`In October 2019, Defendants notified Arcesium they did not intend to renew the
`2015 Agreement.
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`Defendants then engaged in sham negotiations to renew the 2015 Agreement,
`proposing commercially unreasonable terms that were plainly impossible for
`Arcesium to accept—including a supracompetitive royalty fee and a provision
`that would prohibit Arcesium from marketing to current customers of Advent or
`SS&C.
`
`Following expiration of the 2015 Agreement, which triggered Arcesium’s
`Continuation Rights, Defendants invented a pretextual claim that Arcesium had
`acted in violation of its Continuation Rights. Defendants made this pretextual
`claim just as the critical license rights to Geneva were set to expire for both
`Arcesium and certain major customers of Arcesium.
`
`On that pretext, and without providing Arcesium an opportunity to cure the
`purported breach, Defendants unilaterally purported to terminate Arcesium’s
`Continuation Rights; refused to issue license keys needed to access the software;
`and shut down access to a critical Geneva customer support portal.
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`Defendants started proposing restrictions in other companies’ Geneva licenses
`that would bar those companies from doing business with Arcesium.
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`The actual and potential disruption caused by Defendants’ unlawful conduct and
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`breach of contract is enormous—for Arcesium, its customers, and the market. In light of
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`Defendants’ conduct, Arcesium is compelled to ask the Court:
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`
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`to issue an injunction requiring Defendants to perform under the 2015 Agreement
`and specifically to respect Arcesium’s Continuation Rights, including, but not
`limited to, by providing the license keys necessary to enable Arcesium’s
`continued support of its existing customers;
`
`1 Hartford Business Journal, “SS&C enjoys success but wants billions more,” March 21, 2011,
`https://www.hartfordbusiness.com/article/ssc-enjoys-success-but-wants-billions-more-windsor-software-behemoth-
`eyes-new-acquisitions (last visited June 7, 2020); see also SS&C October 27, 2016 Q3 2016 Earnings Call,
`available at https://seekingalpha.com/article/4016258-ss-and-c-technologies-holdings-ssnc-q3-2016-results-
`earnings-call-transcript.
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`Case 1:20-cv-04389 Document 1 Filed 06/09/20 Page 5 of 58
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`
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`
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`to issue an injunction barring Defendants from interfering with Arcesium’s
`relationships with its current customers, and with its efforts to land new
`customers; and
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`to award money damages to Arcesium based on Defendants’ anticompetitive
`conduct, their interference with Arcesium’s customer relationships, and their
`breach of the 2015 Agreement.
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`6.
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`The remedies Arcesium seeks are needed to maintain and restore fair competition,
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`and to protect Arcesium, its customers, and the marketplace against Defendants’ illegal and
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`anticompetitive activities. Arcesium is filing this Complaint today and anticipates seeking
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`preliminary relief via motion in the near term.
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`Parties
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`7.
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`Plaintiff Arcesium is a limited liability company incorporated in the state of
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`Delaware, with its principal place of business at 1166 Avenue of the Americas, Fourth Floor,
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`New York, New York 10036.
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`8.
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`Defendant Advent is a corporation incorporated in the state of Delaware, with its
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`principal place of business at 600 Townsend Street, Suite 500, San Francisco, California 94103.
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`Advent was purchased by SS&C on or around July 8, 2015, and is now a wholly-owned
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`subsidiary of SS&C, doing business under the name SS&C Advent.
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`9.
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`Defendant SS&C is a corporation incorporated in the state of Delaware, with its
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`principal place of business at 80 Lamberton Road, Windsor, Connecticut 06095.
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`Jurisdiction And Venue
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`10.
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`This Court has subject matter jurisdiction over this action under 28 U.S.C. § 1337
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`(commerce and antitrust regulation) and 28 U.S.C. § 1331 (federal question), as this action arises
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`in part under the Sherman Act, 15 U.S.C. §§ 1, 2, and the Clayton Act, 15 U.S.C. §§ 13, 14.
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`11.
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`This Court has supplemental jurisdiction over Arcesium’s state-law claims under
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`28 U.S.C. § 1367.
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`12.
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`This Court has personal jurisdiction over Defendants because this suit arises out
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`of their actions within and directed at this state. In particular, and without limitation, both
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`Advent and SS&C maintain offices in New York and in this District, where each Defendant
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`regularly conducts business activities relevant to the matters alleged herein. These activities
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`include, on information and belief, marketing and business operations directed at customers and
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`prospects located in New York. Further, the dispute arises out of the 2015 Agreement, which
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`was negotiated in New York and is governed by New York law.
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`13.
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`Venue is proper in this District pursuant to 28 U.S.C. § 1391(b)(2) because a
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`substantial part of the events giving rise to the claims occurred here, and Arcesium is a citizen of
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`and may be found in this District.
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`14.
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`The acts complained of herein have occurred within the flow of, and have
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`substantially affected, interstate trade and commerce.
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`Facts
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`Relevant Markets And Market Power
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`15.
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`The relevant markets (the “Relevant Markets”) for purposes of this action are
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`(1) the market for software that performs portfolio accounting and related tasks (“Portfolio
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`Accounting Software”); and (2) the market for post-trade technology solutions (“Post-Trade
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`Solutions”). The Relevant Markets are described in further detail below.
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`16.
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`There are two relevant sub-markets for each Relevant Market at issue here: (i) a
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`sub-market for the provision of Portfolio Accounting Software and Post-Trade Solutions to
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`hedge funds managing more than $5 billion in assets under management (“Complex Funds”) and
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`Case 1:20-cv-04389 Document 1 Filed 06/09/20 Page 7 of 58
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`(ii) a sub-market for the provision of Portfolio Accounting Software and Post-Trade Solutions to
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`fund administrators (“Fund Administrators”), which are third-party service providers to which
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`Complex Funds outsource certain of their investor-facing and non-investor-facing activities.2
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`Complex Funds have high transaction volumes, deal with complex asset classes, transact with a
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`variety of counterparties, and typically have a high employee headcount.3 Fund Administrators
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`provide outsourced services that cater to these uniquely complex features of Complex Funds.
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`17.
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`The provision of Portfolio Accounting Software and Post-Trade Solutions to
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`Complex Funds and Fund Administrators are relevant and distinct sub-markets for antitrust
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`purposes due to the differentiated needs and preferences of these sophisticated customers. For
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`both Complex Funds and Fund Administrators, the high transaction volumes, complex asset
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`classes, large number of interrelated trading entities and strategies, complicated reference data
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`structures, multiple sources of inbound data, and large number of diverse financing agreements
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`inherent to Complex Funds require complex solutions tailored for their needs.
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`18.
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`Portfolio Accounting Software provides customers with basic functionalities for
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`accounting, allowing them to maintain accurate and reliable books and records. Driven in part
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`by regulatory obligations, Complex Funds must perform certain periodic, recurring, accounting
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`activities with respect to the assets they trade on behalf of their investors, such as determining
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`the daily net asset value of the investments held and conducting other basic accounting tasks.
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`Accurate accounting books and records maintained using Portfolio Accounting Software ensure
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`that Complex Funds can perform their investment-related services and fulfill their legal and
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`regulatory obligations.
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`2 Fund administrators protect the interests of a fund’s investors by independently verifying the assets and valuation
`of the fund.
`3 The size of a fund as measured by AUM is a good proxy for a fund’s complexity, including the need for
`sophisticated Post-Trade Solutions.
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`19.
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`For Complex Funds and the Fund Administrators that serve them, there is no
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`substitute for Portfolio Accounting Software to perform these tasks. Whereas a simple, typically
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`smaller investment manager or simple fund administrator might be able to manually handle its
`
`portfolio accounting needs (e.g., using Microsoft Excel), manual accounting is neither practical
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`nor feasible for Complex Funds and Fund Administrators based on their characteristics. Upon
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`information and belief, the vast majority of, if not all, Complex Funds and Fund Administrators
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`use Portfolio Accounting Software.
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`20.
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`Defendants’ Geneva is by far the leading Portfolio Accounting Software. When
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`SS&C acquired Advent in 2015, SS&C’s CEO made clear that the acquisition was intended to
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`capture Advent’s “crown jewels,” Geneva.4 Due to its central role as both a functional piece of
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`technology automating accounting, and as the repository of the accounting data that is central to
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`completing other post-trade tasks, Geneva commands high fees and is firmly entrenched within
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`the operating systems of a large majority of Complex Funds and Fund Administrators. Complex
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`Funds rely on the portfolio accounting data generated by Geneva to make investment decisions
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`and to evaluate the effectiveness of their investment strategies.
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`21.
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`Post-Trade Solutions are solutions that allow customers to perform post-trade
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`tasks, including (i) portfolio accounting,5 (ii) cash management, (iii) collateral management,
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`(iv) data management and corporate action processing, and (v) reconciliation (collectively “Post-
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`Trade Tasks”). Customers seeking Post-Trade Solutions execute Post-Trade Tasks in-house with
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`software and platforms, by outsourcing them to third parties (that also use software and
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`platforms), and in some cases, a combination of both.
`
`4 Brooke Southall, “SS&C buys Advent for the Geneva crown jewels so what happens to Black Diamond and
`Advent Axys?” RIABiz (February 2, 2015, 7:33 PM), https://riabiz.com/a/2015/2/3/ssc-buys-advent-for-the-geneva-
`crown-jewels-so-what-happens-to-black-diamond-and-advent-axys, (last visited June 7, 2020).
`5 Portfolio Accounting Software is a type of Post-Trade Solution.
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`22.
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`Post-Trade Tasks are essential for Complex Funds and for Fund Administrators,
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`which perform these tasks for Complex Funds, in order to obtain and maintain accurate and
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`reliable information regarding all of the trades made per day. For Complex Funds and Fund
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`Administrators, there are no reasonable substitutes for the Post-Trade Solutions that they require.
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`Specifically, Complex Funds and Fund Administrators rely heavily, and in many cases entirely,
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`on Post-Trade Solutions to perform Post-Trade Tasks quickly and efficiently. Given the scale of
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`assets under management for Complex Funds and Fund Administrators, manual performance of
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`Post-Trade Tasks is neither feasible nor practical. Complex Funds and Fund Administrators also
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`would incur substantial costs and disruption if they were to seek to perform such work without
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`Post-Trade Solutions, or if they were to switch to different providers for Post-Trade Solutions.
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`23.
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`Access to the relevant customer’s portfolio accounting data is essential to perform
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`Post-Trade Tasks. Neither Complex Funds nor Fund Administrators—or others to whom they
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`may outsource—can complete these Post-Trade Tasks without access to the relevant fund’s
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`portfolio accounting data. Post-Trade Solutions obtain such accounting data via Portfolio
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`Accounting Software, such as Geneva. Because Complex Funds and Funds Administrators need
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`accuracy and speed when handling a high volume of data, the interaction between the Portfolio
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`Accounting Software and the other Post-Trade Solutions utilized by clients has to be automated –
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`including the sending and receiving of information to and from the Portfolio Accounting
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`Software – and the different pieces need to “speak” with each other directly to ensure accuracy,
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`speed, and efficiency. Without such close coordination, Post-Trade Solutions cannot properly
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`and effectively function, particularly for Complex Funds and Fund Administrators given the high
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`volumes of data they manage.
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`24.
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`The relevant geographic market for this action is the United States. Complex
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`Funds and Fund Administrators prefer to acquire Portfolio Accounting Software and Post-Trade
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`Solutions from U.S.-based companies because U.S. companies generally possess superior
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`expertise regarding U.S. tax and other regulatory requirements. To the extent that Defendants
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`and Arcesium provide Portfolio Accounting Software and Post-Trade Solutions to their
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`customers on a global scale, on information and belief, the relevant markets, market shares, and
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`market dynamics with respect to competition in the United States discussed herein apply to the
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`same extent worldwide.
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`Arcesium And The Arcesium Platform
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`25.
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`Founded in 2015, Arcesium is the owner, licensor, and developer of a proprietary
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`technology and software platform (the “Arcesium Platform”).
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`26.
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`Complex Funds and Fund Administrators contract with Arcesium for its middle-
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`and back-office Post-Trade Solutions. The Arcesium Platform is a comprehensive and fully-
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`integrated technology and software platform designed to solve the Post-Trade Task challenges
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`faced by Complex Funds and Fund Administrators. The Arcesium Platform offers a real-time
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`integration with order management systems and automated oversight of third-party
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`administrators, among other services. Arcesium’s proprietary software is configured to integrate
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`with an individual customer’s existing systems and infrastructure to offer customers a unified
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`solution for their entire post-trade process.
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`27.
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`The Arcesium Platform is designed to handle all Post-Trade Tasks other than the
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`accounting function for customers. In 2015, Arcesium partnered with Advent to license
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`Advent’s portfolio accounting software, Geneva; this meant Arcesium could offer a single,
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`integrated solution where Portfolio Accounting Software (and the critical accounting data it
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`housed) was deployed alongside, and seamlessly integrated with, the Arcesium Platform to
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`handle all aspects of the customer’s Post-Trade Task needs. Arcesium sought this partnership
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`with Advent since Advent was the industry’s leading provider of Portfolio Accounting Software,
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`and its Geneva software had become an industry standard.
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`28.
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`The Arcesium Platform can draw on the customer’s information and data stored in
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`Portfolio Accounting Software to rapidly provide customers with information and reports
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`regarding the customer’s investment positions that cannot be generated without the Arcesium
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`Platform. The Arcesium Platform offers customers a unique and highly-valuable solution for
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`their Post-Trade Tasks that far exceeds the capabilities and functionality of Portfolio Accounting
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`Software like Geneva alone. Numerous Arcesium customers that previously relied on Geneva
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`alone chose to contract with Arcesium to host, manage, and make the Geneva software available
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`as part of the Arcesium Platform, from facilities that Arcesium owned or controlled.
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`29.
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`Unlike Geneva, which most customers use solely for its accounting function,
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`Arcesium delivers critical information within its environment and across its customers’ post-
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`trade ecosystems in a reliable, consistent, and completely transparent way. By creating a single,
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`authoritative source, Arcesium eliminates inconsistencies between disparate systems,
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`uncertainties about which is the “right” data, and the need for customers to maintain large in-
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`house teams to manage their information and run reconciliations across different business
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`segments or functions.
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`30.
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`Arcesium also offers a variety of other solutions and optimizations that Geneva
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`users seek. For example, Geneva requires specific methods of data input, which make it difficult
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`for Geneva to handle high volumes of data efficiently. As another example, firms with multiple
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`sources of data that need to be booked into their accounting systems struggle with converting
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`that data into the highly specific formats required by Geneva.
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`31.
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`Arcesium solves these problems. The Arcesium Platform automates the process
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`of inputting and retrieving bulk data into and from Geneva. Arcesium’s solutions also are able to
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`access stored data instantaneously and calculate critical data sets in real time, eliminating the
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`reliance on slow accounting runs (like those run by Geneva) for time-sensitive information.
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`Arcesium’s solutions allow its customers to reduce operational burdens and drive
`
`32.
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`efficiencies, which leads to a reduction in operational costs.
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`33.
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`The enhanced and complex capabilities of Arcesium make it a natural option for
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`the most complex and sophisticated customers. Arcesium’s solutions are designed to work with
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`and around Defendants’ Geneva software (or other Portfolio Accounting Software) to solve
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`problems that arise for firms with high transaction volumes, complex asset classes, a large
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`number of interrelated trading entities and strategies, multiple sources of inbound data, and a
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`large number of diverse financing agreements. For this reason, Arcesium’s target customers are
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`typically Complex Funds and Fund Administrators.
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`Defendants’ Market Dominance
`
`34.
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`Founded in 1983 and publicly traded since 1995, Advent had, by late 2014 and
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`early 2015, become a dominant provider of Post-Trade Solutions.
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`35.
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`Advent has been owned since 2015 by SS&C, the world’s largest administrator
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`for hedge funds and private equity funds and leading provider of Post-Trade Solutions. SS&C
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`offers a full range of software and outsourcing solutions across securities accounting, front-to-
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`back office operations, performance and risk analytics, regulatory reporting, and healthcare
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`information processes. SS&C dominates, controls, manages, and operates Advent to the extent
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`that there is a unity of interest between the parties and Advent is SS&C’s alter ego. SS&C is
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`using its alter ego as an instrumentality or conduit to accomplish its own anticompetitive
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`objectives.
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`36.
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`SS&C has, through acquisitive and unlawful behavior, sought to expand its
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`control and dominance to all aspects of the post-trade technology environment. Indeed, SS&C
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`has boasted of its Geneva acquisition: “We . . . now own the means of production for our service
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`level that we really jealously guard . . . because that’s the bedrock of everything we do.”6
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`SS&C’s CEO has boasted that SS&C’s acquisitions have positioned it “to dominate in the
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`markets we chose.”7
`
`37.
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`Advent’s Portfolio Accounting Software, Geneva, is widely used by asset
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`managers for accounting functions and has become the industry standard for portfolio
`
`accounting. Through Geneva, accounting is performed, trades are processed, dividend and
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`interest accruals are calculated, income is paid, costs are amortized, securities are priced,
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`corporate actions are processed, and portfolio performance is calculated. In exchange for license
`
`fees, Advent provides “license keys”—essentially passcodes—required to enable access to
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`Geneva’s various functions.
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`38.
`
`Through Geneva, Defendants dominate the market for Portfolio Accounting
`
`Software. Many Complex Funds and Fund Administrators strongly prefer to use Geneva as their
`
`Portfolio Accounting Software. Indeed, most of Arcesium’s customers rely on Geneva to
`
`maintain their portfolio accounting data.
`
`6 See SS&C July 29, 2015 Q2 2015 Earnings Call, available at
`https://t1se.thomsonone.com/eventcapsule/eventcapsule.aspx?m=t&cid=116983&eid=5763270&source=undefined
`&search=&stype=iPhrase (last visited June 7, 2020).
`7 See SS&C Aug. 9, 2012 Q2 2012 Earnings Call, available at
`https://t1se.thomsonone.com/eventcapsule/eventcapsule.aspx?m=t&cid=116983&eid=4868664&source=undefined
`&search=&stype=iPhrase (last visited June 7, 2020).
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`39.
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`Complex Funds may use Geneva either through a license of their own, or through
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`a license acquired by the Fund Administrator or Post-Trade Solutions provider that they use.
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`Approximately 70% of Complex Funds have a license for Geneva and approximately 70% of the
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`top 20 Fund Administrators use Geneva.8
`
`40.
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`Defendants’ dominance of Portfolio Accounting Software is not limited to the
`
`Geneva product. Defendants also offer additional Portfolio Accounting Software separate from
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`Geneva, including Advent Axys, Advent Portfolio Exchange, HiPortfolio, PORTIA, and Global
`
`Wealth Platform. These platforms increase and enhance Defendants’ share and power in the
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`market for Portfolio Accounting Software.
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`41.
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`Geneva users cannot easily switch to different Portfolio Accounting Software.
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`Because Geneva is integrated into its users’ systems, it is extremely expensive, time-consuming
`
`and disruptive to replace it. A customer seeking to transition to new Portfolio Accounting
`
`Software may take more than one year and hundreds of thousands of dollars to convert its
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`internal systems over to another system. The transition also may interrupt a customer’s access to
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`other systems and Post-Trade Solutions that it relies upon on a daily basis. As SS&C openly
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`touts, these “high conversion costs can create barriers to adoption of new products or
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`technologies.”9 These switching costs create substantial barriers to entry and expansion for
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`potential competitors of Defendants. Geneva customers faced with price increases implemented
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`by Defendants must choose either to pay the substantially higher prices for Geneva or to incur
`
`8 Hedge Fund Alert, Top Administrators of Single-Manager Hedge Funds, May 8 2019, available at
`https://www.hfalert.com/rankings/rankings.pl?Q=116 (last visited June 7, 2020). According to 2019 rankings
`prepared by Hedge Fund Alert, these top 20 fund administrators account for 90% of assets under management by
`fund administrators. Id.
`9 SS&C Form 10-K for the Fiscal Year Ended December 31, 2019, at 15, available at
`http://www.annualreports.com/HostedData/AnnualReports/PDF/NASDAQ_SSNC_2019.pdf (last visited June 7).
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`business disruption and hundreds of thousands of dollars in switching costs to transition to
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`another accounting software solution.
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`42.
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`The severity of switching costs allows Defendants to charge top dollar for
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`Geneva. Defendants’ published financials bear this out: Since Defendants’ 2015 acquisition,
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`Advent’s EBITDA margin increased from 36% to 50%—a higher margin than Google or
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`Facebook.
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`43.
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`Defendants possess market power and/or monopoly power in the Portfolio
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`Accounting Software market. Defendants have the power to control prices, diminish output, and
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`exclude competition in the Portfolio Accounting Software market, as evidenced by the following,
`
`described further herein: (i) Defendants’ dominant market share in the Portfolio Accounting
`
`Software market; (ii) the barriers to entry in the Portfolio Accounting Software market, including
`
`high switching costs; (iii) Defendants’ unjustified non-renewal and subsequent breach of the
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`2015 Agreement; (iv) Defendants’ refusal to honor their contractual obligations relating to
`
`Arcesium’s Continuation Rights; (v) Defendants’ purported termination of Arcesium’s ability to
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`use Geneva to aid its customers; and/or (vi) Defendants’ coercion of customers not to do
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`business with Arcesium through exclusionary contracts and arrangements.
`
`44.
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`In addition to their Portfolio Accounting Software, Defendants offer a host of
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`other Post-Trade Solutions through various business lines, including software and outsourcing
`
`solutions. These include the Post-Trade Solutions provided by SS&C GlobeOp, a fund
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`administrator offering financial technology products and services, as well as Defendants’ Recon
`
`and Evare products, among others. Defendants also seek to eliminate competition through
`
`acquisition, including 17 “strategic and complementary acquisitions” in the past 5 years.10
`
`10 SS&C Acquisitions, https://www.ssctech.com/about-us/acquisitions.
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`Case 1:20-cv-04389 Document 1 Filed 06/09/20 Page 16 of 58
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`45.
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`Defendants are the largest provider of Post-Trade Solutions in the United States,
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`and their Post-Trade Solutions control a predominant share of the market. GlobeOp boasts that it
`
`is the “industry’s largest fund administrator,” and Defendants’ other Post-Trade Solutions
`
`(including Geneva) saturate the market. Defendants offer a range of solutions, and in some
`
`cases, more than one solution to the same customer. As one industry commentator interviewing
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`SS&C’s CEO put it: “everybody that I talked to said you can’t get away from paying SS&C.
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`You’re now the #1 market share leader.”11
`
`46.
`
`In addition to Arcesium’s head-to-head competition with Defendants, Fund
`
`Administrators pair with Arcesium to compete against SS&C’s wholly owned fund administrator
`
`firm, GlobeOp. These Fund Administrators team up with Arcesium to make themselves a more
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`attractive, competitive option than GlobeOp for Complex Funds. Access to Arcesium’s
`
`enhanced capabilities enables these Fund Administrators to compete with Defendants in offering
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`customers Post-Trade Solutions. As described herein, Defendants’ anticompetitive behavior
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`seeks, among other things, to prevent direct competition from Arcesium, and competition from
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`Fund Administrators supported by Arcesium.
`
`47.
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`Defendants possess market power and/or monopoly power in the Post-Trade
`
`Solutions market, and the above-described layer