OPINION AND ORDER In this multidistrict litigation, familiarity with which is presumed, investors allege that seven stock exchanges (the “Exchanges”) are violating the federal securities laws by providing services to high-frequency trading (“HFT”) firms in a way that amounts to actionable “market manipulation.” In particular, the investors argue that by providing (or selling) HFT firms services that allow those firms to execute allegedly harmful trading strategies more successfully (thus harming the investors), the Exchanges have engaged in conduct that adds up to an unlawful manipulative scheme under Securities and Exchange Commission (“SEC”) Rule 10b-5 and are therefore liable under Section 10(b) of the Securities Exchange Act of 1934. In 2015, this Court dismissed each of the consolidated cases in its entirety. (Of particular relevance here, the Court found that the Exchanges’ alleged conduct did not rise to the level of unlawfully “manipulative” acts and that the Exchanges were protected from these lawsuits by a quasi-governmental immunity.) After some (but not all) of the plaintiffs appealed the dismissal of some (but not all) of their claims, the Court of Appeals ruled in favor of those plaintiffs and remanded to this Court for further consideration. The remaining defendants — the Exchanges — now move to dismiss what remains of the cases, renewing several of their original arguments. Given the Court of Appeals’ ruling, and the standards applicable at this stage of the litigation, the Court concludes that Plaintiffs allege sufficient facts to survive the Exchanges’ renewed motion to dismiss. Accordingly, the Court denies Defendants’ motion.BACKGROUNDThe following facts are drawn from the allegations in the Second Consolidated Amended Complaint (“SAC” or the “Complaint”) — which the Court must accept as true for purposes of this Rule 12(b)(6) motion — and the “other sources courts ordinarily examine when ruling on Rule 12(b)(6) motions to dismiss,” including documents attached to the Complaint, statements or documents incorporated into the Complaint by reference, and matters of which judicial notice may be taken. Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007).In four actions originally filed in this District, various investors (collectively, “Plaintiffs”) brought claims under Sections 6(b) and 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”), 15 U.S.C. §78a et seq., against (as relevant here) seven stock exchanges — BATS Global Markets, Inc., Chicago Stock Exchange, Inc., Direct Edge ECN, LLC, New York Stock Exchange, LLC, NYSE Arca, Inc., Nasdaq OMX BX, Inc., and the Nasdaq Stock Market LLC (collectively, the “Exchanges”) — and two Barclays entities, Barclays PLC and Barclays Capital, Inc. (collectively, “Barclays”).1 In a fifth action filed in the Central District of California and later consolidated here by the Judicial Panel on Multidistrict Litigation (“JPML”), Plaintiff Great Pacific Securities (“Great Pacific”) brought California-law claims against Barclays.2The Court has already summarized the facts relevant to these lawsuits and, thus, will not repeat them at great length here. See In re Barclays Liquidity Cross & High Frequency Trading Litig. (“In re Barclays LX”), 126 F. Supp. 3d 342, 348-53 (S.D.N.Y. 2015). Of particular relevance to the claims that remain are three services that the Exchanges sell to HFT firms: proprietary data feeds, “co-location” services, and “complex order types.”The proprietary data feeds at issue here are certain “enhanced” or “direct” data feeds that the Exchanges offer as a subscription service to certain customers. See Docket No. 252 in 14-CV-2811 (“SAC”),
118-31. In general, they provide better or faster (or better and faster) data to customers who are willing to pay extra for it. All investors seeking to trade on the Exchanges have access (as they must) to a “consolidated” data feed that includes (1) the price at which the latest sale of each stock traded on the Exchanges occurred, the size of that sale, and the exchange on which it took place; (2) the current highest bid and lowest offer for each stock traded on the Exchanges, along with the number of shares available at those prices; and (3) the highest bid and lowest offer currently available across all the Exchanges and the exchange or exchanges on which those prices are available. See In re Barclays LX, 126 F. Supp. 3d at 349. Customers who pay for enhanced and direct data feeds receive more information, more quickly: Some such data feeds, for example, offer access to a greater “depth[] of order book information,” meaning that instead of the single best bid and offer for a given stock on a given exchange, an exchange may provide information about every bid and offer for a given stock through an enhanced data feed. SAC 126. Further, because the Exchanges transmit these enhanced data feeds directly to subscribers, those subscribers typically receive the data (including the “core” data included in the consolidated feed) before the consolidated feed — which must first assemble information out of the raw data received from each contributing exchange — reaches other investors. SAC
