Kessev Tov alleges that Defendant John Doe B's spoofing bids caused it to receive a "margin call" that morning. Specifically, Kessev Tov alleges that pricing signals sent by John Doe B's spoofing bids signaled that Kessev Tov's portfolio was suddenly worth dramatically less. Kessev Tov alleges that, because it maintained a margin balance in its account, the decrease in value created by the spoofing bids caused Kessev Tov to fall into a margin deficiency, and Kessev Tov received a margin call at 8:30:34 a.m. Kessev Tov alleges that Defendant John Doe B's spoofing bids were the only bids in the market for the positions held by Kessev Tov prior to the margin call. To correct the margin deficiency, Kessev Tov alleges that it was then forced to enter orders to close its options. In the process of closing out its positions by placing market midpoint orders, Kessev Tov claims it fell victim to two additional spoofing bidders, John Does A and D. Kessev Tov alleges that those defendants' spoofing bids caused it to execute orders "at values highly distorted from the rational market." (Case No. 20-cv-04947, Dkt. 25 at 10, ¶ 28.) Pajoje alleges that John Does A and D's spoofing bids also caused it to purchase contracts to close its positions at prices "far in excess of the rational prices for the option contracts at issue based upon their fundamental characteristics, and also in excess of the prices that prevailed following the cessation of Defendants' spoofing activity." (Case No. 20-cv-04948, Dkt. 24 at 24, ¶ 53.) 

[T]he two-year period for bringing a Section 10(b) claim is triggered once the plaintiff "discovers, or could have discovered with reasonable diligence, the facts underlying the violation," whichever comes first. CP Stone Fort Holdings, LLC v. John Doe(s), Case No. 16 C 4991, 2016 WL 5934096, at *3 (N.D. Ill. Oct. 11, 2016) (Gettleman, J.) (hereinafter, "CP Stone I") (citing Merck, 559 U.S. at 633, 646-48)). Plaintiffs' securities claims under the ISL carry a three-year statute of limitations, beginning on the date of the security's sale. 815 ILCS § 5/13(D). "But if the party suing neither knew nor in the exercise of reasonable diligence should have known of any alleged violation of the Illinois securities law, the three-year period to sue for Illinois securities law claims begins to run [on] the earlier of: (1) the date upon which the party bringing the action has actual knowledge of the alleged violation of this Act; or (2) the date upon which the party bringing the action has notice of facts which in the exercise of reasonable diligence would lead to actual knowledge of the alleged violation of this Act." Orgone Cap. III, LLC v. Daubenspeck, 912 F.3d 1039, 1046 (7th Cir. 2019) (quoting 815 ILCS § 5/13(D)(1)-(2)) (emphasis omitted).

knew virtually all of the information on which their claims are based, including that: (1) unknown market participants had submitted bids and asks at prices that Plaintiffs believed to be far in excess of rational prices and higher than prices at any other time that day; and (2) Plaintiffs had purchased options at prices they believed were artificially inflated by spoofing trades. Defendant John Does A and D contend that only the identity of the alleged culprits was unavailable in August 2015, and that was not a legitimate reason to delay the filing of the complaints until after the limitations periods had expired

[T]he bids were effectively invisible because they were only in the market for a matter of milliseconds. Beyond the short duration of the bids, Plaintiffs note that the bids did not show up on their trade confirmations or statements because they had exited the market by the time that Plaintiffs' trades were executed. While Plaintiffs recognize that they were aware of their losses in August 2015, they maintain that the cause was unknown to them. In support, Plaintiffs note that Kessev Tov initially brought a FINRA arbitration against Plaintiffs' broker, because Plaintiffs thought that their damages had been caused by flaws in the broker's trading platform. It was only after the arbitration concluded that Plaintiffs realized other market participants could have been responsible, and thereafter obtained the "tick-by-tick" trading data revealing the alleged spoofing bids. (Case No. 20-cv-04947, Dkt. 34 at 10-11; Case No. 20-cv-04948, Dkt. 39 at 10-11.) Plaintiffs deny that a reasonable market participant (1) could have known in August 2015 that unknown market participants were submitting bids and asks at irrational prices; or (2) should be expected, absent knowledge of fraud, to have obtained and scoured the "tick-by-tick" trading data to determine whether unknown market participants had defrauded them.

[T]he allegations in the amended complaints do not create an "ironclad" limitations defense warranting dismissal. That Plaintiffs were aware of their losses in the aftermath of the August 24, 2015 trading activity does not establish that Plaintiffs were aware, or should have been aware through reasonable diligence, that those losses stemmed from the alleged market manipulation of other market participants. It is simply not clear from the complaints that the applicable statutes of limitations are a bar to these suits. Defendant John Does A and D's motion to dismiss on this ground is denied

[P]laintiffs ostensibly ask the Court to conclude that purchasing an option at the highest price for a given day-while in the midst of an admitted "flash crash"-is an irrational price. Merely labeling prices "irrational" because they were higher during a period of volatility does not make them irrational. . . .

At bottom, Plaintiffs have alleged that Defendants engaged in market manipulation because they entered-and quickly cancelled-orders to buy and sell. The complaints allege that Defendants' manipulation is evident in the "well-defined pattern and speed of placing these bids" and the "frequency, speed, and precision with which the bidding took place evidences a highly orchestrated plan to deceive." (Case No. 20-cv-04947, Dkt. 25 at 6-7, ¶ 16; Case No. 20-cv-04948, Dkt. 24 at 6-7, ¶ 15.) In the case of John Does A and D, the complaints place the volumes of simultaneous bids and asks in a range of 12 to 83, while for John Doe B, the range was 3 to 7. (See generally Case No. 20-cv-04947, Dkt. 25; Case No. 20-cv-04948, Dkt. 24.) The only "pattern" apparent from the face of the complaints is that of rapidly placed and subsequently cancelled orders. 

But placing rapid orders and cancelling them does not necessarily evince illegal market activity. Other courts have recognized the ubiquity of rapid trading across securities platforms. For example, in United States v. Coscia, 866 F.3d 782, 785 (7th Cir. 2017), the Seventh Circuit described this "new trading environment" in the commodities markets, in which "trading takes place on digital markets where the participants utilize computers to execute hyper-fast trading strategies at speeds, and in volumes, that far surpass those common in the past." None of the parties contend that rapidly cancelling orders, in and of itself, is illegal.