ok counsel proceed good morning your honor may i please the court my name is max for conflict attorney for the plaintiffs the procedural history and underlying facts of this twenty year old case are complex but thankfully the issues before this court are simple did defendants prove as they were required to unsell a tax that all of the plaintiffs will be on able to prove any damages at trial the answer to that question is clearly no defendants did not meet their initial burden undersell the text to prove that any of the plaintiffs would be and you're prepared to just go to trial right all the evidence you need i haven't taken depositions i haven't gotten  document discovery from defendants i mean there was an informal discovery of damages not everybody seemed to agree that the trading losses were the measure and then and then the records were never developed your honor respectfully that's been factually wrong as to whether the grammar police were developed for two reasons one is there was no bilateral discovery two is if we go to trial right now the evidence before this court is agreed by as much damage as i can get and that's seventeen million actually it was nineteen and change was accounting for prejudgment interest as required as a matter of law under new york law and nine percent for each of the twenty years during which these damages were not paid now the question on the six point filler one million dollars that was agreed to there's no dispute about that and in fact if we fall on your honor this way of thinking summary judgment should be enter complete printouts from the sipek trustee complete printouts of every transaction that took place at a our baron at any of its clearing brokers one hundred percent and they were produced the nd factual error respectfully your honor in your honest question is that there was discovering damages there was not there was only unilateral discovery of what plaintiffs had in their possession and not complete discovery rd the defendants did not e look at the documents we produced in april in may of two thousand and fifteen loaded scam loaded onto a database that they that they mr horowitz my friend claims to have looked at but he was never in the court he him and pointed out the fact that he over misunderstood the records he was looking at so leaving aside anything else let's just look at what their expert said their expert said he took a black box approach to looking at damages in what judge went around the last appeal before this court described as a paradigmatic pump and dump scheme black box approach doesn't look at any of the purchases or any of the sales pump and dump schemes rely on misrepresentations and myth and manipulations which inflate the price of specific stocks not anything in the client's portfolio but not moving the goalpost at all they are my claim has always been as mr myers asserted in his report the claim has always been the baron how stocks were manipulated that claim was recognized by a panel of this court on which judge brown a sat and was recognized it was a pump and on particular stocks that were manipulated it was not a and i don't believe there were any on any of these stocks under new york law losses that other brokers must be disregarded in fact under new york law mr meyers black box approach is entirely fully assert that undersell attacks the obligation of the defendant to prove entitle him to judgment as a matter of law would require him to negate that those claims those claims were dismissed at summary judgment those claims were dismissed as were the claims for damages on the basis of contested expert testimony advertently to those claims by the district court is that correct though those claims that you sort of were swept out with it with the rest of the entire they were your honor but but respect your honor on summary judgment the district court was wrong to sweep pat any claims there weren't was no contested evidence the plaintiffs would be unable to records for seventeen million three hundred thousand dollars worth of house treating and how stocks were not produced and judge credit came to the obvious conclusion that without those trading records any determination of damages based on trading and even pico in our brief page thirty one that it when the for the damages result from a single fraud you can't disregard the gains and just sue for the losses was very clear in that regard and this was a single wrong the fact mr folkenflik pointed out this isn't your typical broker case this was a criminal enterprise where baron actually underwrote these house stock so they became public through baron baron created the market for these stocks manipulated the market for these stocks and it was a criminal enterprise so it doesn't matter where this the shares were traded whether they were treated at baron or in these other rd party brokerage firms we don't even know who they are these rd party brokerage firms are they were all traded within that criminal market that impacted the purchase price of this year's impact impacted the selling price of the shares so to say that you know we're just going to sue to recover the six million four hundred thousand dollars in disregard that we may have made ten million dollars in the other transactions is not permitted under clear circuit precedent  you're out of that's a very curious claim that those people make most of those are the same claims that they've asserted against our clients and allege that by our clients making investments in bear and we aided and abetted the fraud so the bizarre situation i think that's why nobody ever really paid attention to those claims mr folkenflik didn't address those claims in his opposition to the motion for summary judgment granted we did not either but so that so was the does represent them but he did not raise it in the court below that just came up for the st time on appeal what's the undisputed evidence that there were profits made that there are there by there's preclude claiming correct correct and it was not i'm sorry burdens that it's plaintiff's burden to prove their net losses and he argues in his brief that that's a set off that we would have the burden on but that's not what the law  set off as an independent claim this is his burden to prove his net losses and he cannot prove net losses when there's not seventeen point three million dollars worth of securities we're trading records for seventeen million three hundred thousand dollars with the securities this was a manipulated market everybody everybody agrees of the prices were wildly fluctuating there were shares transferred into these accounts that were purchased somewhere else at the very beginning of the period we have no idea how many shares were purchase what was paid for them and then all the shares that were transferred in and out during during the for just out of curiosity do you have any information as to the dates of the trains you know we have no information whatsoever n one of the points i think is i want to make clearly in terms of the plaintiffs arguing about all of the experts they didn't use that term here today but there's there's two issues with regard to the so called battle of the experts  purchased the date they were transferred into the account at the market price on that date and for shares transfer now we can assume that they were sold on that date at that price judge crowdy quite appropriately said that that's what he and the assumption that that is just not applicable particularly in a case we're talking about seventeen million three hundred thousand shares in any criminal enterprise so he rejected that as a matter of defense expert it's said that you need in order to calculate the losses you'd have to do a cash flow analysis he did not say that at all what he did is a trade by trade analysis and a cash flow analysis his his trade by trade analysis covered the six million four hundred thousand dollars worth of trades the the so called st baron type securities and he agreed with the plaintiffs counsel it basically as to the amount of trading losses with regard to those he did also in addition to that he did a cash flow analysis but he said with regard to both of them whether it's trade by trade analysis or cash flow analysis you had to have those trading records from the seventeen thousand dollars worth of trades to be able to make any meaningful calculation as to what the trading losses were and so there is there was no battle of experts here that would preclude summary judgment with regard to the discovery i don't even really understand that argument we made a decision even before the case was came down back down to judge crotty that we would conduct informal discovery with regard to the trading records there was no agreement there was no prohibition on conducting formal discovery with regarding with regard to the trading records we served a document request these are plaintiffs on training records they should have them if they don't have them they should be able to get them mr folkenflik served a  remarked on a poorly developed and meager record on damages but said that was sufficient at least to get to trial but not when you have seventeen million three hundred thousand dollars worth of records missing i mean that's an extraordinary amount plaintiff's burden to prove net losses which we're never going to be able to go to trial without those trading records and have a jury make a determination to a reasonable certainty as to the amount of trading losses it would be impossible factual matter my friend mr horowitz miss recalls what happened we agreed to have discovered the soli from the plaintiffs the defendants did not produce a single document the defendants did not refuse to produce documents when i requested them informally mr harwood says discovery subpoena was rejected on the basis of our dream and he never brought it up before the court again number two if there are records was agreed to gave us a basis for reaching a settlement judge cabanas may not recall but he suggested when we peered in april two thousand and eleven that given the age of the case the party should talk about resolution we talked about resolution i agree they kept trying to get all of the documents now the question of what goes before the court what evidence it is admissible is not the documents in my plainest possession at the beginning of the case which larded five years after they started trading with baron and three years after baron was in bankruptcy until the reply brief in the reply affidavits mr meyers was mostly talking about stocks traded out of baron stocks were pumped and dumped at baron and transferred to merrill lynch the proper time to value those stocks is at the moment of the transfer that is standard standard industry procedure the black box approach which which the court indorsed and which mr meyers proposed is not standard procedure is inappropriate and i think i will probably be able to exclude this evidence on under dobler grounds because it is not designed to capture the losses from the criminal brokers in the pump and dump scheme thanks very much like your decision we appreciate your vigorous