IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

LAST ATLANTIS CAPITAL, LLC, )

et al., ) Nos. 04 C 0397

) 05 C 5600

Plaintiffs, ) 05 C 5671

)

vs. ) JUDGE ELAINE BUCKLO

) MAGISTRATE JUDGE ARLANDER KEYS

AGS SPECIALIST PARTNERS, ) 

et al., )

)

Defendants. )

MEMORANDUM OPINION AND ORDER

Plaintiffs Last Atlantis, Lola, Lulu, Goodbuddy, Friendly,

Speed Trading, Bryan Rule, Brad Martin, and River North filed

this action, alleging violations of §10b of the Exchange Act and

SEC Rule 10b-5 (a), (b) and (c), as well as state law claims,

including breach of contract, common law fraud, breach of

fiduciary duty, tortuous interference, and violations of the

Illinois Consumer Fraud and Deceptive Practices Act. 

From the outset of this case, the Plaintiffs have claimed

that the Specialist Defendants intentionally discriminated

against them, as direct access customers. The Court previously

summarized the claims as follows:

At the heart of Plaintiffs’ claim is an inherent

tension between direct access customers and

specialists, stemming from their competing efforts to

profit from market anomalies. The Specialist

Defendants are dealer/brokers charged with establishing

the bid and offer prices for every option in a

designated option class; this price is known as “the

quote.” Specialists fill orders by matching buyers’
orders to purchase options with contra-side customer

orders to sell options at the same price. In the event

that there are no existing contra-side customer orders,

specialists execute orders by buying or selling the

designated option from their own proprietary account. 

 Direct access customers, like Plaintiffs,

utilize arbitrage trading strategies in an attempt to

take advantage of price discrepancies in the options

markets. For example, if a specialist's buy bid on one

exchange is $5.00 and a specialist's sell bid on a

different exchange for that same option is $4.90 on

another exchange, Plaintiffs attempt to execute

simultaneous orders to sell on the first exchange and

buy on the second exchange to achieve a 10 cent profit

per option, while incurring minimal risk.

 Plaintiffs claim that, like the direct access

customers, specialists also profit from capitalizing on

market anomalies. Specialists are able to realize

significant profits from such “spreads,” if and when

they are able to fill orders from their own proprietary

accounts. However, because direct access customers

purportedly have access to better information and

technology than typical customers, they have cut

substantially into the specialists’ profits. 

Plaintiffs claim that Defendants intentionally

discriminated against orders placed by direct access

customers since April 1, 2001, in favor of more

lucrative orders placed by less sophisticated

customers. Specifically, Plaintiffs charge that the

Specialist Defendants have:

[I]dentified the origin, and then knowingly

mishandled the execution of thousands of

orders to buy and sell options that were sent

to defendants by engaging in various illegal

trading practices such as refusing to

automatically, or promptly, execute the

orders or send confirmations upon the

execution of orders, changing (or “fading”)

the quoted prices after receiving the orders,

delaying the execution of orders, refusing to

honor requests to cancel orders, and

unilaterally terminating or adjusting the

prices on orders that were previously

executed and confirmed, and conducting

thousands of proprietary trades for the

2
Specialists' own accounts that were executed

in advance of, or instead of, executing

Plaintiffs' marketable limit orders (i.e.

orders to purchase or sell a set amount of

options at a specific price equal to the bid

or offer price actually disseminated by a

Specialist on a particular exchange).

 The defendants have consistently denied discriminating

against orders placed by direct access customers in general, and

against those placed by the Plaintiffs in particular. Defendants

have acknowledged that a higher-than-average percentage of direct

access customers’ orders go unexecuted, but have offered nondiscriminatory reasons to explain the phenomenon.1

 In January of 2006, Defendants moved to dismiss the

consolidated complaints, arguing, largely, that Plaintiffs failed

to plead fraud and scienter with sufficient particularity. See

1

The defendants have explained that direct access customers rely

upon the same kinds of computer programs to identify market anomalies,

and that, because these computer programs instruct direct access

customers to place virtually identical orders at the same time, direct

access customers flood specialists with multiple orders for the same

options, making it impossible to fill them all. Defendants contend

that, additionally, orders may not be executed because 1) another

marketable order is received and executed prior to the receipt of the

order in question; 2) the order is received when the specialist is in

the process of updating its quote; 3) computer problems or human

limitations may cause dissemination of an inaccurate market, or delays

in reporting executions and/or quote updates; 4) the Exchange or the

Specialist experience equipment malfunctions; 5)a“fast markets” has

been declared on the floor but is not reported to the market when the

order arrives; 6) a cancellation is entered prior to the specialist’s

attempt to execute the order; 7) the specialist properly awaits

reports of executions or other market action on away markets; 8) the

customer bid or offer responsible for the quoted price is cancelled

before the order can be executed; 9) the specialist consummates a

trade with the market makers in the pit prior to receiving the order;

10) conflicting demands on the specialists’ time; and 11) human error.

3
Defs’ 1/6/06 Mot. To Dismiss. On September 13, 2006, Judge

Bucklo granted the Defendants’ Motion, dismissing all of

Plaintiffs’ federal claims, and declining to exercise

jurisdiction over Plaintiffs’ state law claims. Judge Bucklo

concluded that the Plaintiffs had failed to plead facts giving

rise to an inference of scienter against the specialist

defendants, and failed to plead facts giving rise to an inference

of scienter and justifiable reliance with respect to the Exchange

Defendants. Last Atlantis, et al. v. Chicago Board of Options

Exchange, 455 F. Supp.2d 788 (N.D. Ill. 2006). 

 Ten days after the district court dismissed the case, the

AMEX and Defendants disclosed that certain specialists, including

some of the named Specialist Defendants, had agreed to the entry

of orders imposing disciplinary sanctions and fines against them

for having mishandled thousands of Orders to trade options

between June 1, 2002 and January 31, 2005 (the “AMEX Consent

Order”). Plaintiffs filed a Motion for Reconsideration, which

the district court ultimately granted, permitting Plaintiffs to

file an amended consolidated complaint, and directing the parties

to submit proposed discovery schedules. See, e.g., Memorandum

Opinion and Order of 3/22/2007. On July 6, 2007, Judge Bucklo

entered an Initial Discovery Order, directing Plaintiffs to

identify and explain the orders that they claim were fraudulently

mishandled. 

4
 Just prior to the Court’s issuance of its Initial Discovery

Order, the United States Supreme Court issued its decision in

Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 127

S. Ct. 2499 (2007), wherein the Court reviewed the Seventh

Circuit’s holding that a plaintiff could satisfy the heightened

standards for pleading scienter under the federal securities laws

by alleging facts that permitted a merely plausible inference of

scienter. The Supreme Court rejected the Seventh Circuit’s

“merely plausible” standard, and instead determined that, in

order to survive a motion to dismiss, a federal securities law

plaintiff must plead facts that are both cogent and at least as

compelling as any competing inferences that a reasonable person

could draw from the facts alleged. 

The Defendants again moved to dismiss2 the Amended

Complaint, relying heavily upon the more stringent pleading

standard adopted in Tellabs. On February 7, 2008, Judge Bucklo

granted the Motion with respect to the Exchange Defendants,

finding that Plaintiffs had not made the requisite scienter

showing. She determined, however, that evidence that some of the

Specialist Defendants were sanctioned in the AMEX Consent Order

for conduct similar to that alleged in the Amended Complaint

rendered Plaintiffs’ proposed inference of fraud and scienter at

2

 On November 27, 2007, the Specialist Defendants filed a

Renewed Motion for Reconsideration and for Dismissal of the

Amended Consolidated Complaint

5
least as compelling as any innocent explanation, with regard to

the Specialist Defendants identified in the Consent Order. 

Accordingly, the district court denied the Motion with respect to

Defendants AGS Specialist Partners (“AGS”), Bear Hunter, CDM,

Goldman Sachs Execution and Clearing LLP (“GSEC”), SLK-Hull

Derivatives Specialists (“SLK-Hull”), Susquehanna International

Group (“SIG”), TD Options, LCC (“TDO”), Wolverine, and Knight

Financial Products (“Knight”). With regard to the Defendant

Specialists not named in the AMEX Consent Order, the district

court found that the evidence did not raise a cogent and

compelling inference of scienter, and the court granted the

Motion to Dismiss with respect to those Specialist Defendants. 

Almost four years ago, on March 13, 2009, this Court ordered

Plaintiffs to identify 500 orders that formed the basis for their

allegations that the Defendants fraudulently mishandled their

orders in violation of state and federal securities laws, with

each Plaintiff to identify at least 50 orders. Some of the

plaintiffs – Last Atlantis and Speed Trading – submitted charts

identifying orders that they allege were fraudulently mishandled,

along with explanatory affidavits. Others – River North, Brad

Martin, and Bryan Rule – initially conceded that they could

identify only unexecuted orders, but subsequently submitted

charts and lists of purportedly fraudulently mishandled orders. 

And still others – Lulu, Lola, Friendly Trading and Goodbuddy –

6
failed to respond at all. Since that time, the parties have

engaged in protracted discovery disputes. They continue today;

the case is before the Court on various discovery-related

motions, all fully-briefed. 

The plaintiffs have filed several motions: one motion seeks

to enforce the Court’s June 18, 2012 and July 12, 2012 discovery

orders by compelling defendant GSEC to provide answers to River

North’s First Set of Interrogatories; another motion seeks to

enforce the Court’s June 18 and July 12 orders by compelling

defendant AGS to produce documents and by determining the

sufficiency of AGS’ answers to the plaintiffs’ requests for

admissions; and another, related to the latter, seeks an order

deeming defendant AGS’ improper responses to requests for

admission to be admitted and compelling AGS to produce documents

and serve answers to interrogatories. Additionally, defendant

GSEC has moved to compel answers to its first set of

interrogatories to plaintiffs, and defendant Susquehanna

Investment Group has moved to compel the plaintiffs to produce

documents. Finally, defendant AGS has filed a motion to dismiss

for failure to comply with court orders to obtain AMEX audit

trail data, but this last motion is not yet fully briefed.

Discussion

The federal discovery rules permit broad discovery in an

effort to facilitate trial preparation and settlement of legal

7
disputes. See Bond v. Utreras, 585 F.3d 1061, 1075 (7th Cir.

2009). Indeed, parties may “obtain discovery regarding any

nonprivileged matter that is relevant to any party’s claim or

defense” even if the relevant information is not admissible at

trial. Fed.R.Civ.P. 26(b)(1). But the discovery must “appear [ ]

reasonably calculated to lead to the discovery of admissible

evidence.” Id. And “the burden is upon the objecting party to

show why a discovery request is improper.” Rubin v. Islamic

Republic of Iran, 349 F.Supp.2d 1108, 1111 (N.D. Ill.

2004)(citing Meyer v. S. Pac. Lines, 199 F.R.D. 610, 611 (N.D.

Ill. 2001)). If the party fails to make the requisite showing,

Federal Rule of Civil Procedure 37 allows the Court to enter an

order compelling the party to comply with discovery requests.

At the outset, the Court notes that the bulk of the parties’

disputes involve the Relevant Orders, including the underlying

data and methodology the plaintiffs used to identify these

particular orders as being “relevant.” The defendants’ motions

make similar arguments as to why such information should be

produced, and the plaintiffs motions seek to protect such

information from disclosure. Thus, many of the motions really

involve two sides to the same coin. 

1. GSEC’s Motion to Compel

Defendant Goldman Sachs Execution & Clearing, LLC (“GSEC”)

has moved, pursuant to Rule 37(a), to compel the plaintiffs to

8
respond to its First Set of Interrogatories [see docket #1093]. 

In particular, GSEC seeks responses to interrogatories 1-5, 9 and

13, which it claims deal with the more than 300,000 orders the

plaintiffs claim were mishandled (these orders have been referred

to by the parties as the “relevant orders”); the interrogatories

they propounded seek information about the factual bases for the

mishandling claim, as well as information concerning damages

claimed by the plaintiffs. GSEC argues that the information is

relevant and not protected by any privilege. 

The Interrogatories for which GSEC seeks to compel answers

provide as follows:

1. Identify all persons who provided information

used to prepare the answers to the Interrogatories.

2. Provide the methodology Plaintiffs used to

determine and identify the Relevant Orders listed in

each of the Microsoft Excel spreadsheets denominated

Executable Orders Not Executed.xlsx, Orders Executed

After Requests to Cancel.xlsx, Orders Handled in

Violation of Due Diligence and Priority Rules

CBOE.xlsx, Orders Handled in Violation of Due Diligence

and Priority Rules AMEX.xlsx, and Orders Handled in

Violation of Due Diligence and Priority Rules PHLX.xlsx

that your counsel sent to Defendants’ counsel with the

attached letter (“Exhibit A”) dated June 14, 2012 from

A. Friedman to S. Cohen, et al. (Collectively, the

“June 2012 Spreadsheets”).

3. For each Relevant Order listed in the June

2012 Spreadsheets, describe the precise reason(s)

Plaintiffs believe such order did not receive “best

execution” and was “not properly handled and/or

executed” by the respective Defendant.

4. For each Relevant Order listed in the June

2012 Spreadsheets, identify (a) the time and date when

it was entered, (b) the time(s)xecuted or cancelled, 

9
(c ) the terms of the order (including price, quantity,

period (e.g., immediate-or-cancel, fill-or-kil, day, or

good-til-cancelled), and whether it could be executed

partially or only on an all-or-none basis), (d) the

exchange on which it was entered, (e) the quotations

for the option series on the Exchange immediately

before and contemporaneous with when it was entered and

during all times while it was in force, (f) the other

orders entered that day with the same Exchange for the

same option series during the period preceding or

contemporaneous with when the Relevant Order was

entered and while it was in force, (g) the executions

that day in the same option series or class during the

period preceding or contemporaneous with when the

Relevant Order was entered and while it was in force,

and (h) the market conditions during the period

preceding or contemporaneous with when the Relevant

Order was entered and while it was in force.

5. For each Relevant Order listed in the June

2012 Spreadsheets, identify where it appears among the

data produced by any of the Exchanges in connection

with this litigation (“Exchange Data”) and how you know

the identified order is the same as the applicable

Relevant Order.

* * *

9. For each Relevant Order listed in any of the

three Orders Handled in Violation of Due Diligence and

Priority Rules June 2012 Spreadsheets, identify the

order(s) Plaintiffs believe the respective Defendant

improperly executed prior to or ahead of the Relevant

Order, including the time at which such order(s) was or

were received by the respective Defendant.

* * *

13. Identify the individuals who determined, or

participated in the decisions by which it was

determined, which orders to include on the June 2012

Spreadsheets.

Plaintiffs objected to each of these, on various grounds. Of

particular import here, they objected to having to produce any

information about how the Spreadsheets were created and by whom.

10
Information concerning the relevant orders is plainly

relevant – indeed, that evidence is at the crux of the claims at

issue in this lawsuit. To be sure, all of the defendants

question the plaintiffs’ ability to identify specific orders that

they claim were handled improperly and for which they seek

millions of dollars from defendants. Indeed, this has been the

primary focus of the defendants’ discovery over the past several

years. The plaintiffs are claiming that the defendants failed to

properly execute these orders; the defendants are entitled to

discovery concerning how the plaintiffs arrived at those claims

and what evidence they have to substantiate those claims. 

Nor is the discovery sought privileged. Although the

spreadsheets may have been prepared in anticipation of trial, the

basis for the plaintiffs’ claims should have preceded the filing

of the suit (to satisfy Rule 11). And, to the extent the

information requested concerning the spreadsheets reflects mental

impressions, they would seem to be those of the plaintiffs’

experts, not their attorneys. Discovery concerning how certain

orders were singled out as being improperly executed, again,

would seem to go to the crux of the plaintiffs’ case; the Court

fails to understand why the plaintiffs continue to want to hide

the ball on the issues. GSEC’s motion to compel is granted. 

2. SIG’s Motion to Compel

Defendant Susquehanna Investment Group (“SIG”) has moved

11
under Rules 36 and 37 for an order compelling the plaintiffs to

compel the production of documents in response to request numbers

1-7, 91 and 92 (see docket #1074); the plaintiffs have declined

to produce responsive documents, arguing that they are work

product and therefore protected from disclosure. 

Request number 1 seeks “[a]ll documents relating to each

Relevant Order.” Number 2 seeks “[a]ll documents relied upon in

identifying each Relevant Order.” Number three seeks “[a]ll

documents relating to each computer model utilized in the

identification of each Relevant Order.” Number four seeks “[a]ll

documents relied upon or related to Plaintiffs’ bases for

alleging that each Relevant Order was mishandled including each

algorithm developed to make such determination.” Number 5 seeks

“[a]ll documents supporting your contention that each Relevant

Order was intentionally mishandled.” Number six seeks “[a]ll

documents supporting your contention that each Relevant Order was

recklessly mishandled.” And number seven seeks “[a]ll documents

supporting your contention that each Relevant Order was

negligently mishandled.” These requests seek discovery that goes

to the heart of the plaintiffs’ claims; it is relevant, not

privileged, and must be produced. 

SIG’s Request number 91 seeks “[a]ll documents which

demonstrate that on average a total of 25 to 35 percent of Your

orders and the orders of the other Plaintiffs to buy and sell

12
options that were submitted to the Exchanges from 2002 through

2005 were filled and executed by the Defendants.” And number 92

seeks “[a]ll historical data for the number of orders sent by You

and the number of such orders that were filled which demonstrate

that You experienced, throughout the relevant period, far lower

fill rates than the fill rates for all public customers including

but not limited to documents which reflect that in 2002 and 2003

You received a fill rate of 25%, that You received a fill rate of

18% in 2004 and a fill rate of 35% in 2005 for orders sent to

each Exchange during each of those years.” Again, the requested

discovery goes to the heart of the plaintiffs’ claims; the

defendants are entitled to understand the evidence upon which the

plaintiffs are basing their allegations. 

As the Court understands it, the plaintiffs took underlying

data – audit trail data – ran searches and programs on it and

came up with a list of “relevant orders,” i.e., the orders they

claim were either mishandled by the defendants or not executed. 

The defendants claim they need to be able to see what the

plaintiffs did with the data, to see how they came up with the

lists, in order to test the validity of their allegations of

mishandling and/or non-execution. The plaintiffs claim that the

searches and the programs run to create the lists from the audit

trail data amounts to work product. But the list of relevant

orders was not simply prepared in anticipation of trial, it was

13
prepared because the Court ordered the plaintiffs to prepare it;

the plaintiffs are claiming that the defendants mishandled these

orders or fraudulently failed to execute them in accordance with

established rules and protocols. The defendants have the right

to test those claims, and the requested discovery is the easiest

and most efficient way to get at the issue; forcing the

defendants to re-create the underlying data, figure out the

specific methodology employed by the plaintiffs and take the

necessary steps to determine exactly how the plaintiffs arrived

at the orders they did, would, indeed, cause undue hardship. 

Accordingly, the Court rejects the plaintiffs’ work product

claim. See Fed. R. Civ. P. 26(b)(3)(A). 

SIG also seeks to compel the plaintiffs to produce documents

in response to request numbers 8-15, 50, 51, 54 and 72; the

plaintiffs have declined to produce responsive documents, arguing

that the requests are unduly burdensome. The plaintiffs agreed

to produce non-privileged responsive documents in response to

requests 8, 9, 10, 12, 13, 14, 15, 50, 51, 54 and 72; to the

extent they withheld documents in reliance on a claim of

privilege that is inconsistent with the Court’s ruling above

concerning work product, those additional documents must be

produced. Although the plaintiffs limited their response in

request 50 to misconduct by SIG, the Court agrees that

information relating to misconduct by other defendants is not

14
relevant to SIG’s defense of this lawsuit, and will not compel

the plaintiffs to produce to SIG documents relating to misconduct

that does not specifically involve SIG. 

Plaintiffs objected to request 11, and declined to produce

any documents in response. Request number 11 seeks “[a]ll

documents reflecting the trading strategy You utilized in making

the decision to transmit [each] Relevant Order for execution.” 

This discovery is relevant to the defendants’ claims concerning

the placement of orders by direct access customers and must be

produced; the relevance objection is therefore overruled. 

After SIG’s motion to compel was fully briefed, the

plaintiffs filed a motion seeking to introduce new evidence

demonstrating that SIG could – and indeed did – readily obtain

this information from other sources. To support this claim, the

plaintiffs submitted exhibits from the deposition of Bryan Rule,

one of the plaintiffs in this case. The plaintiffs argue that

these exhibits, offered by SIG at Mr. Rule’s deposition and

containing “detailed market information regarding Relevant Orders

sent by Mr. Rule to the Philadelphia Stock Exchange in 2001,

demonstrate that the defendants already possess the discovery

they seek regarding audit trail data. 

In response, SIG concedes that, in the rare instances where

the plaintiffs have supplied the Exchange identifier for a

Relevant Order and where the audit trail data in its possession

15
is not corrupt, it is able to locate a particular Relevant Order. 

SIG argues, however, that this is the exception, not the rule,

and that, with respect to the vast majority of the orders put at

issue in the case, the data is corrupt. Additionally and more

fundamentally, SIG argues that locating a particular order does

not shed any meaningful light on why or how plaintiffs concluded

that the order was mishandled. To understand and defend against

the plaintiffs’ claims, SIG argues, it needs to understand how

the plaintiffs identified certain orders as “relevant” and why

they claim such orders were mishandled. 

Unless the plaintiffs are willing to try their case based

upon the ten orders that are the subject of their latest motion,

as representative “Relevant Orders,” they must produce the

information requested. 

Reduced to their essence, the plaintiffs’ claims allege that

certain orders were mishandled by the Specialist defendants in

violation of Exchange policies and in violation of the securities

laws; fundamentally, the Court accepts that the defendants would

need to know how the plaintiffs determined which orders were

“Relevant Orders” and the bases for their claims that those

orders were mishandled. The plaintiffs must have the information

that allowed them to discern from the universe of all orders

which were “Relevant” and why; it is only fair that the

defendants – who are being hauled into court to defend themselves

16
against these claims – are allowed discovery on the issue. The

information is not work product, it is the factual basis of the 

plaintiffs’ claims and it should be disclosed. This has

consistently been the Court’s view of this case; yet years have

passed without this information ever coming to light. It is time

for the plaintiffs to stop resisting the disclosure of this

information, to provide the requested discovery and to move this

case forward to resolution. 

3. The Plaintiffs’ Motions

The plaintiffs first seek an order compelling GSEC to

respond to interrogatories served by River North. River North

served a set of four interrogatories on GSEC. Interrogatory

number 1 asks GSEC to “[i]dentify each and every transaction or

Order identified in the Microsoft Access and Microsoft Excel

files contained on the computer disks produced by several

Defendants in the Action on or about June 15, 2009 with

identifying Bates Nos. Of Knight 01899-001905; SIG-LA 002956-

002964; GS 022681-022684; and TD 0-0004077 (collectively, the

“SEC Orders Lists”) that are transactions concerning, or Orders

submitted by or on behalf of: (a) Plaintiff Rule and/or any

accounts maintained by or for Rule (including Spear Leeds &

Kellogg, L.P. Account Number 739L0409, Trader Number 0409); (b)

Plaintiff RN (Tax Id. No. 36-4362891) and/or any accounts

maintained by or for RN (including Spear Leeds & Kellogg, L.P.

17
Account Numbers #7XE10409, #72910409, #73811209, #7T991209,

#7T990409, #73821209, #72920409, #73821209, #72920409, #72930409,

#72940409); and ( c) Plaintiff Brad Martin (Social Security No.

329-58-6259) and/or Electronic Trading Consultants (Tax Id. No.

36-4240957) and/or any accounts maintained by or for Martin

(including Spears Leeds & Kellogg, L.P. Account Numbers

#76N31209, #76N31409 and #76N31509).

Interrogatory Number 2 asks that, if GSEC is unable to

provide an answer to all or part of interrogatory number 1, it

explain why and identify what additional information it might

need to answer the interrogatory completely. Interrogatory

number 3 asks GSEC to state whether it or any of its affiliates

“were requested to, and/or did, identify any Injured Customers

(as defined in the document attached hereto as Exhibit A) in

response to the request made by the Fund Administrator in

connection with the Distribution Plan attached as Exhibit A.” 

And, in interrogatory number 4, River North asked that, if the

answer to number 3 was yes, GSEC “explain the process [it] used

to identify Injured Customers and how that process would differ

(if in fact it would differ) from the process that would be

required to be followed to identify transactions and/or Orders in

response to Interrogatory 1.” GSEC objected to all four

interrogatories, arguing that each was “unduly burdensome” and

sought non-relevant information. 

18
The motion to compel is denied; by their own admission, the

plaintiffs have the information they request in interrogatory

number 1, and there is no reason to compel the defendants to

provide it in some other format to them. Additionally, the

plaintiffs have not explained why the information requested in

interrogatory number 3, which deals with an unrelated SEC

settlement, is relevant to these proceedings. The relevance of

interrogatory number 4 is similarly unexplained and not apparent. 

The plaintiffs next seek an order enforcing the Court’s June

18 and July 12 orders by compelling AGS to produce documents and

to determine the sufficiency of AGS’s answers to the plaintiffs’

requests for admissions (see docket # 1070). AGS has represented

that, as of the date it filed its response to the plaintiffs’

motion, it had produced all non-objectionable documents

responsive to plaintiffs’ first and second requests to produce;

the plaintiffs do not appear to contend otherwise. 

With respect to the requests for admissions, AGS argues that

the requests that are the subject of the plaintiffs’ motion were

improper. Specifically, the plaintiffs ask the Court to

determine the sufficiency of AGS’ answers to request numbers 2,

4-6, 9, 10, 12, 18, 20, 23, 24 and 27. As explained in letters

back and forth between counsel, the plaintiffs contend that AGS’

initial responses to 12 of the Requests for Admission failed to

comply with Rule 36(a)(4) because they fail to address the

19
substance of the requested admissions. Attached to the

plaintiffs’ motion as Exhibit A is an “[a]lternatively worded

version” of the 25 Requests for Admissions” that the plaintiffs

argue AGS should be directed to admit or deny. AGS responds by

arguing that the requests themselves are improper, whether

because of sloppy drafting or because of the specific information

requested and the manner in which it is requested. 

The Court has considered the parties’ arguments with respect

to each request for admission, and has determined that AGS’s

responses are proper, in light of the requests. The Court will

not compel further responses. The plaintiffs could have served

AGS with more precise requests to admit such as those offered in

the “alternatively worded” version of its discovery requests; it

opted not to do so. No further response will be compelled. The

plaintiffs may not be happy with the answers they received, but

the answers are not improper, given the language of the requests. 

The parties are free to make of those admissions what they will

at trial. 

In a separate motion, the plaintiffs ask the Court to

determine the sufficiency of AGS’s responses to the last 25

requests for admissions; to compel AGS to produce documents

responsive to plaintiffs’ third request to produce (dated

September 7, 2012); and to compel AGS to serve answers to River

North’s First Set of Interrogatories (dated September 11,

20
2012)(see docket # 1102). 

Turning to the document requests, in response to the

plaintiffs’ third request for the production of documents, AGS

filed two objections: first, AGS objected to the discovery as

being “unnecessarily duplicative in that the Request duplicates

prior document requests and discovery requests from Plaintiffs”;

AGS also objected to the document requests as being “unduly

burdensome and harassing,” seeking “the disclosure of documents

that are irrelevant and immaterial and not reasonably calculated

to lead to the discovery of admissible evidence . . . .” AGS’

Objections to Plaintiffs’ Third Request to all Defendants for the

Production of Documents (attached to Plaintiffs’ Motion as

Exhibit C). The plaintiffs argue that these objections are

improper. 

In its response, AGS has represented that it produced all

responsive documents in its possession (more than two thousand

pages) in response to the first and second requests to produce,

that the third request is duplicative and that, having produced

all responsive documents already, it has nothing further to

produce. For example, AGS argues that request number 6 in the

third request for production of documents is duplicative of

requests 2, 9 and 10 from the first set of requests. Request

number 6 seeks

[a]ll documents concerning the use of Auto-Ex systems

by any person that has been provided access to, or the

21
ability to use, the automatic execution features of any

Exchange’s order routing and execution systems,

including all communications to order entry firms and

other persons regarding their compliance with

applicable Exchange Rules.

Although it is true that the referenced requests mention and

involve the Auto-Ex systems, request number 6 would seem to be

much broader than what was requested in the first set of requests

involving that information. And, to the extent AGS has

responsive documents that it has not yet produced, it must

produce them. 

Requests 2 and 3 seek documents that are potentially

relevant to the parties’ claims and defenses, and, to the extent

AGS has not already produced responsive documents, it must do so. 

The remainder of the requests in the plaintiffs’ third set

of requests are, indeed problematic for the reasons raised in

AGS’ objections. Some of the requests are irrelevant. For

example, request number 1 seeks the same documents sought in

earlier requests but for the time period beginning September 2007

and ending September 2012; the earlier requests covered the time

period from April 1, 2001 through date of response (the requests

were served December 31, 2007). The plaintiffs would be hard

pressed to show how AGS’ business practices in 2007 are relevant

to the alleged fraud they claim occurred prior to 2004.

The remainder of the requests either seek the same documents

already covered in the first and second requests to produce, or

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seek information and documents that has no possible relevance to

the parties’ claims. The Court, therefore, denies the motion to

compel as to those requests. The situation is similar to the

plaintiffs’ attempt to obtain answers to alternatively worded

requests for admission; although discovery is liberal, litigants

don’t get to keep asking for the same things until they get an

answer they like. 

Next, the Court considers AGS’ responses to the requests for

admission. Looking specifically at the last 25 requests, the

Court will not compel further responses. The Court would be

inclined to compel responses to requests 81 through 85, which are

arguably relevant. But AGS responded to these requests,

notwithstanding its objections, and those responses are adequate

and appropriate. The remainder deal with the AMEX proceedings,

and, as explained above, the Court is not persuaded that

discovery relating to those proceedings is relevant here. 

Whether or nor AGS had the ability to obtain audit trail data

from sources other than the plaintiffs is, in the Court’s view,

beside the point. The plaintiffs have claimed that certain

Relevant Orders were mishandled, and they will have the burden of

proving the point at trial. The defendants, including AGS, are

entitled to understand the proof upon which those claims will be

based. To the extent the plaintiffs are seeking the discovery,

not to aid in their case, but simply to bolster their response to

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the pending motion to dismiss, their energies are misplaced. 

The plaintiffs contend that they need better answers to the

requests for admission so that they can respond to AGS’ motion to

dismiss. Although that motion is not fully briefed, based upon

its review of the initial brief, the Court is unlikely to

recommend the relief AGS seeks. Although both this Court and the

district court are frustrated by the lack of progress in this

case, the Court is not inclined to recommend that the harsh

sanction of dismissal is warranted at this time. But the parties

should stop fighting the same discovery battles over and over

again, produce the relevant information and prepare for a trial

that is long overdue (if, in fact, they genuinely wish to proceed

to trial, an assumption that would seem to be undermined

considerably by the parties’ conduct in the case to date).

Turning to the interrogatories served by River North, there

are just two and they seek information relating to how AGs

answered the request for admissions. Having determined that AGS’

responses to those requests pass muster, the Court will deny the

motion to compel further responses to these interrogatories. 

Additionally, the parties and the Court are entitled to presume

that officers of the court will comply with the dictates of Rule

11; unless the plaintiffs have a legitimate reason to believe

that the lawyers involved here failed to comply with Rule 11 (and

they have offered nothing but speculation and unsubstantiated

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claims of obstruction to date), the Court will not compel further

action on the issue. 

Conclusion

For the reasons explained above, the Court grants GSEC’s

motion to compel [#1093]; grants in part and denies in part SIG’s

motion to compel [#1074]; grants in part and denies in part the

plaintiffs’ motion to compel AGS to produce documents [#1102];

denies the plaintiffs’ motion to compel GSEC to answer River

North’s interrogatories [#1076] and denies the plaintiffs’ motion

for an order enforcing discovery orders as to AGS [#1070]. 

DATED: March 4, 2013

ENTERED:

______________________________

ARLANDER KEYS

United States Magistrate Judge

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