Lanier v. Bats Exchange, Inc.
Plaintiff subscribes to data feeds through which the Exchanges provide information about securities traded on the Exchanges to an exclusive securities information processor pursuant to a plan approved by the SEC. The Processor consolidates the data and makes it available to subscribers. Plaintiff filed three materially identical suits alleging that the Exchanges had breached their contracts with him by providing preferentially fast access to the so‐called “Preferred Customers,” who purchase data and receive it from an Exchange directly via its proprietary feed. The court concluded that the district court erred in holding that it lacked subject matter jurisdiction to consider plaintiff's breach of contract claims, but affirmed the dismissal of the complaints for failure to state a claim. In this case, plaintiff has not plausibly alleged that the Exchanges violated any contractual obligation by simultaneously sending data to both the Processor and the Preferred Customers that is received earlier by the Preferred Customers; to the extent that plaintiff alleges that such a contractual obligation arises from the incorporation of SEC regulations into the contracts, his claims are preempted because his interpretation conflicts with the SEC’s interpretation and stands as an obstacle to the accomplishment of congressional purposes; to the extent that plaintiff alleges that the Exchanges undertook self‐imposed contractual obligations, distinct from their regulatory obligations, to ensure that market data is not received by any customer before it is received by the Processor, that claim fails because it has no basis in the text of the contracts; and to the extent that plaintiff argues that the SEC has interpreted the Exchanges’ obligations under the Exchange Act or SEC regulations incorrectly, any such argument must first be administratively exhausted before the SEC before it can be considered by this Court. View "Lanier v. Bats Exchange, Inc." on Justia Law