Affholter v. Citigroup Global Markets Inc et al, 1:23-cv-12302, No. 211 (D.Mass. Jun. 1, 2024) (2024)

`

`Case 1:23-cv-12302-FDS Document 211 Filed 05/31/24 Page 2 of 1598
`
`TABLE OF CONTENTS
` Glossary of Terms
`AMC: Refers to AMC Entertainment Holdings, Inc. class “A” Common Stock
`
`APE: Refers to AMC Entertainment Holdings, Inc. preferred stock equity units
`
`“Apes”: This term extends the "APE" concept and refers to the collective community of retail
`investors are partaking in the buy-and-hold strategy for specific stocks.
`
`ATS (Dark Pools): Alternative Trading Systems, or Dark Pools, are private exchanges for
`trading securities not accessible by the investing public, often used by large institutional
`investors.
`
`BDR: A Brazilian Depositary Receipt (BDR) is a financial instrument that represents a share in
`a foreign company traded on the Brazilian stock exchange. BDRs allow Brazilian investors to
`invest in foreign companies without leaving the Brazilian market, while the underlying shares
`are held by a depositary institution in the company's home country.
`
`DMM Stands for Designated Market Maker, previously known as a Specialist. DMMs have
`roles in maintaining fair and orderly markets, often by buying or selling for their account to
`minimize price volatility.
`
`Dodd-Frank Wall Street Reform and Consumer Protection Act: This act provides the SEC
`with additional authority to regulate and enforce rules related to market manipulation and
`abusive practices, potentially including naked short selling.
`
`DTCC: The Depository Trust & Clearing Corporation (DTCC) is essential in the clearing and
`settlement process. Any abuse of the Continuous Net Settlement (CNS) system and the creation
`of excessive FTDs could significantly impact the integrity of the entire trading system, adding
`a layer of complexity to the legal analysis.
`
`Ethereum Wrapped Tokens: Wrapped tokens are a type of cryptocurrency that represents the
`value of another cryptocurrency. They are created to allow one cryptocurrency to be used on a
`different blockchain. For example, a wrapped Bitcoin token on the Ethereum blockchain will
`enable Bitcoin to be used in Ethereum's DeFi applications.
`
`FINRA: FINRA, as a self-regulatory organization, also imposes rules and regulations that
`govern the conduct of broker-dealers, such as Citadel Securities. These rules may include those
`that ensure fair and transparent market practices.
`
`FTD Stands for Failure to Deliver. This occurs when one party in a trading contract doesn't
`deliver on their obligation, either the shares, the cash, or both, within the standard settlement
`period.
`
`IDQS Stands for Internalized Displayed Quotation System. It is a trading system where quotes
`are publicly displayed, but the trades are executed internally within a firm.
`2
`
`
`
`

`

`Case 1:23-cv-12302-FDS Document 211 Filed 05/31/24 Page 3 of 1598
`
`
`“Infinity Squeeze”: An "infinity squeeze" is a situation where the price of a stock could rise
`indefinitely due to extreme demand from short sellers needing to cover their positions. At the
`same time, very few shares are available to buy.
`
`Limit Order Book: A record of unexecuted limit orders maintained by the security specialist
`who works at the exchange. It shows the buying and selling interest at different price levels.
`
`LULD Stands for Limit Up-Limit Down. It's a set of rules major U.S. stock exchanges use to
`prevent trades in stock at prices outside specified levels.
`
`National Best Bid and Offer (NBBO): The NBBO represents the highest bid and lowest offer
`prices available for security across all exchanges and market makers.
`
`National Market System (NMS): A system in the U.S. that integrates various market data to
`present a unified and transparent view of current stock prices and ensures that all investors
`have equal access to the same trading opportunities.
`
`PFOF Stands for Payment for Order Flow. It refers to the compensation that a broker receives,
`not from the client, but from a third party that executes the trade for directing the order to
`them.
`
`“Project Popcorn”: Citigroup Global Markets scheme to defraud AMC Shareholders through
`issuing the APE shares.
`
`RegSHO (Threshold list): Regulation SHO is an SEC regulation defining short-selling stocks'
`rules. The Threshold List includes securities with a significant number of failure-to-deliver
`positions (FTDs).
`
`Wash Trades: Wash trades, where an investor simultaneously buys and sells the same financial
`instruments to create misleading, artificial market activity, can be a sign of market
`manipulation.
`
`
`
`
`
`
`
`
`
`
`
`
`
`3
`
`

`

`Case 1:23-cv-12302-FDS Document 211 Filed 05/31/24 Page 4 of 1598
`Case 1:23-cv-12302-FDS Document 211 Filed 05/31/24 Page 4 of 1598
`
`TABLE OF CONTENTS
`TABLE OF CONTENTS
`SUMMARY OF CLAIMS………………………………………………………………………………15
`SUMMARYOFCLAIMS. ..... 0... cccnn renee tnenene eaten 15
`JURISDICTION AND VENUE………………………………………………………………………...19
`JURISDICTION AND VENUE. ........0.nn tant nett nena eeaes 19
`THE PARTIES ………………………………………………………………………………………….20
`THE PARTIES 0.0000.I I I EI EE HE Hn EH Ent nr nna ne rented 20
`PRELIMINARY STATEMENT………………………………………………………………………...28
`PRELIMINARY STATEMENT............. 0.rr niente eta 28
`1. ADAM ARON AND APOLLO: A HISTORY OF BUST OUT SCHEMES ………………………...31
`1. ADAM ARON AND APOLLO: A HISTORY OF BUST OUT SCHEMES ..............::0:eeeeeeeee ees 31
`A. ADAM ARON………………………………………………………………………………….33
`A. ADAM ARON. ...0. 0.0cnI IEn tnt ttentne nena eataenegs 33
`B. APOLLO INTEREST IN ENTERTAINMENT AND LEISURE……………………………...34
`B. APOLLO INTEREST IN ENTERTAINMENT AND LEISURE..............::eceeeeeeee eee eeaes 34
`C. VAIL RESORTS ……………………………………………………………………………….38
`C. VAIL RESORTS ....0.0nn rent tntnentne nena eenaes 38
`D. CAP JULUCA SCANDAL……………………………………………………………………..40
`D. CAP JULUCA SCANDAL. .......0nn I nent tiene 40
`E. NORWEGIAN CRUISE LINE…………………………………………………………………41
`E. NORWEGIAN CRUISELINE.........0... renee ee tae e iene eenees 41
`F. SENIOR PARTNER AT APOLLO GLOBAL MANAGEMENT……………………………...42
`F. SENIOR PARTNER AT APOLLO GLOBAL MANAGEMENT............ 0:0 ce :eeeeee eee ee ee eees 42
`G. STARWOOD…………………………………………………………………..……………….42
`G. STARWOOD. ...000.I II I En Gr rt tite neat tnenenentgs 42
`H. WORLD LEISURE PARTNERS………………………………………………………………43
`H. WORLD LEISURE PARTNERS......... 0.0 ccc ce cette eee eee rene ena ee tata eae e ne nene eee 43
`I. LOGICAL CONCLUSIONS…………………………………………………………………...45
`I. LOGICAL CONCLUSIONS. ........0ln renee neta tee nena eeaes 45
`J. AMC PRIVATE EQUITY DEALS…………………………………………………………….46
`J. AMC PRIVATE EQUITY DEALS. ......0. 00. c ceceeee eee eee een ene nena eae eees46
`A. WANDA……………………………………………………………………………………46
`A. WANDA...IEU I En nine niente enenes 46
`B. SILVER LAKE…………………………………………………………………………….47
`B. SILVER LAKE. ..0000.ntti tntntne nena eetaes 47
`C. WANDA REPURCHASE AGREEMENT…………………………………………………48
`C. WANDA REPURCHASE AGREEMENT.......... 0.0 ce ceeeeeeee eee ee eee eee etna eeneneee ea ea ed 48
`D. EQUITY INCENTIVE PLAN MATTERS RESOLUTIONS……………………………...49
`D. EQUITY INCENTIVE PLAN MATTERS RESOLUTIONSG............ 0c: ceeeeeeeeeee eee eee ens49
`K. THE FALSE NARRATIVE OF COVID-19……………………………………………………50
`K. THE FALSE NARRATIVE OF COVID-19... 00... eee nett enene ea eaea 30
`A. THE REAL REASON WHY AMC IS FAILING ……………………………………..51
`A. THE REAL REASON WHY AMCIS FAILING....0. 2. ee eee eee eee eee ees 31
`B. LACK OF REVENUE DIVERSIFICATION………………………………………….52
`B. LACK OF REVENUE DIVERSIFICATION. ........ 00... ceeeceeee eee eee eee eee eee ee eeed 32
`C. LACK OF MAINTENANCE………………………………………………………… 52
`C. LACK OF MAINTENANCE. ..... 000... 0ccecete eee eee teat ne nenenenene ees 32
`D. THEATER CLEANLINESS…………………………………………………………...52
`D. THEATER CLEANLINESS. ........ 0... c cect nee eter e ene ea eee eens 32
`E. HALF HEARTED ATTEMPTS……………………………………………………….53
`E. HALF HEARTED ATTEMPTS. ........ 0.0 cce cece cece eee renee eee eee een ena ee eae eea tae 33
`F. ARON’S DEBT ACCUMULATION………………………………………………….54
`F. ARON’S DEBT ACCUMULATION.......... 0.0 cece eeeee eee eee eee e teen eee ea eeeea 34
`2. AMC STATEMENT OF FACTS……………………………………………………………………..54
`2. AMC STATEMENTOFFACTS... 00...tenn ee nae nt tae ne eens 34
`A. AMC’S FINANCIALS PRIOR TO COVID-19………………………………………………..60
`A. AMC’S FINANCIALS PRIOR TO COVID-19....0. 0... eee ecient nets eee nena eee eneae 60
`B. COVID-19 PANDEMIC………………………………………………………………………..65
`B. COVID-19 PANDEMIC. ....... 0.0nn nner nt tie nena eaas 65
`C. MEME STOCK PHENOMENON……………………………………………………………..69
`C. MEME STOCK PHENOMENON.......... 0.0: :ccece eee eee rere ener e nena ene ee eae 69
`D. AMC TRADES OVER 1.2 BILLION SHARES ON JANUARY 27TH, 2021………………..72
`D. AMC TRADES OVER1.2 BILLION SHARES ON JANUARY27TH,2021............0:::e72
`CALCULATIONS……………………………………………………………………..78
`A.
`A.
`CALCULATIONS...rr rn niente tia 78
`B.
`ANALYSIS…………………………………………………………………………….79
`B. ANALYSIS...nnn tna eenena neta ene taes 79
`C.
`IMPLICATIONS OF NAKED SHORT SELLING……………………………………79
`C.
`IMPLICATIONS OF NAKED SHORTSELLING............ 0.0 ccceeecee eects ee eee en eeee 79
`D.
`HEDGE FUNDS AND SRO………………………………………………………..…81
`Dz
`HEDGE FUNDSAND SRO.....0 0...eee en tener e ea eeneaeees 81
`3. HEDGE FUND DEFENDANTS’ EARLY STRATEGIC STRIKES……………………………...…82
`3. HEDGE FUND DEFENDANTS’ EARLY STRATEGIC STRIKES. ...0. 0.2... cece ceee eee ee eee eeeeees 82
`CMBX……………………………………………………………………………………...82
`A.
`A.
`CMBX...00EE EE EE II EEE EE EE HEE nt t nr tnt tt 82
`B.
`SHORTING AMC’S PROPERTY OWNERS AND LANDLORDS………………………87
`B.
`SHORTING AMC’S PROPERTY OWNERS AND LANDLORDS. .............:eeeeeeeee 87
`C.
`HOLLYWOOD STRIKE…………………………………………………………………..89
`C.
`HOLLYWOODSTRIKE. ...0. 0...ccc renee ene eae eaes 89
`4. AMC CHRONOLOGY OF 2021……………………………………………………………...……..93
`4. AMC CHRONOLOGYOF2021.00.00.nr ratte aeeaeee ena eaas 93
`JANUARY 27TH SPECIAL BOARD MEETING AND GENESIS OF “PROJECT
`A.
`A.
`JANUARY 27TH SPECIAL BOARD MEETING AND GENESIS OF “PROJECT
`POPCORN”………………………………………………………………………………...93
`POPCORN?” ..0nn EE I I IE EU EE EEE EEE Ente ttt 93
`PROJECT POPCORN MEMORIALIZED - NOVEMBER 2021…………………………99
`PROJECT POPCORN MEMORIALIZED - NOVEMBER2021.............c:eeeeeeee eee eee 99
`INSIDER SELLING - MONTHS OF NOVEMBER 2021 – JANUARY 2022………….101
`INSIDER SELLING - MONTHS OF NOVEMBER2021 — JANUARY2022............. 101
`4
`4
`
`B.
`B.
`C.
`C.
`
`
`
`

`

`Case 1:23-cv-12302-FDS Document 211 Filed 05/31/24 Page 5 of 1598
`
`D.
`E.
`F.
`G.
`H.
`I.
`J.
`K.
`L.
`M.
`N.
`O.
`
`AT-THE-MARKET OFFERINGS OF TREASURY SHARES…………………………..110
`THE CORRELATION BETWEEN A-T-M OFFERINGS AND AMC TRADING……...115
`FEBRUARY 24TH 2021 ZOOM BOARD MEETING MINUTES……………………...119
`DISPARITIES IN CASH BURN, REVENUE RECOGNITION………………………...122
`SONIA JAIN IS APOLLO’S BUST OUT SPECIALIST……………………………...…123
`AMC 8KS…………………………………………………………………………………127
`CRITICAL AUDIT MATTER……………………………………………………………128
`LACK OF GOING CONCERN…………………………………………………………..150
`CITIGROUP……………………………………………………………………………...152
`MUDRICK CAPITAL GETS SQUEEZED………………………………………………159
`AMC’S TRADING VOLUME DURING THE 2021 MEME RUN-UP…………………160
`AMC CORPORATE FILINGS…………………………………………………………...176
`A. DRASTIC CHANGES FROM 2021 FOUND ON (PRE14A)………………………176
`B. COMPENSATION POLICES WERE THE FIRST THING TO CHANGE…………177
`C. PROPOSALS ON PRE14A 2021…………………………………………………….178
`D. MARCH 19, 2021 FORM DEF 14A AMC ENTERTAINMENT HOLDINGS, INC..180
`E. PSU………………………………………………………………………………...…181
`F. BASE SALARY……………………………………………………………………...181
`G. ANNUAL INCENTIVES (CASH BONUSES)……………………………………...182
`H. LONG-TERM EQUITY INCENTIVES……………………………………………..183
`I. CONSIDER THE COMPARISON BETWEEN SALARIES OF THE EXECUTIVES
`AND AMC SHARES SOLD…………………………………………………………184
`J. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND
`MANAGEMENT STOCKHOLDERS’ AGREEMENT……………………………..185
`THE AMC INSURANCE HEDGING SCHEME………………………………………..189
`P.
`5. AMC 2021 BOARD MEETINGS……………………………………………………….………….191
`A. MAY 4TH 2021 MEETING OF BOARD OF DIRECTORS- STRIPPING RETAIL OF
`POWER……………………………………………………………………………………….191
`B. FEBRUARY 17 2022 BOARD MEETING…………………………………………………..191
`C. JULY 28TH 2022 MEETING OF BOARD OF DIRECTS: ADAM ARON’S MEETING WITH
`“1980’S FINANCIER” CONNECTED TO APOLLO………………………………………..192
`D. MEETING DECEMBER 21, 2022-BOARD OF DIRECTORS, THE REAL REASON FOR
`“APE” EMERGES…………………………………………………………………………….195
`6. AMC’S HYCROFT PUMP AND DUMP SCHEME AND COLLUSION WITH MUDRICK
`CAPITAL L.P. IN 2022………………………………………………………………………………...195
`A. MUDRICK BUYS HYCROFT1………………………………………………………………198
`B. MUDRICK CAPITAL AND AMC 2020-21 DEAL…………………………………………..200
`C. AMC BUYS HYCROFT AND BAILS OUT MUDRICK AS PAYBACK…………………...200
`D. HYCROFT FINANCIALS……………………………………………………………………207
`E. HYMC PRICE GOES DOWN………………………………………………………………..208
`F. SHORT HEDGE FUND DEFENDANTS SHORT HYCROFT TO HURT AMC……………209
`G. ARON’S LACK OF MINNING EXPERIENCE……………………………………………..209
`H. HYCROFT’S OTHER SHORT SELLERS…………………………………………………...211
`I. MUDRICK EXITS HYCROFT………………………………………………………………212
`J. CAUSE OF ACTION…………………………………………………………………………221
`
`
`1 https://hycroftmining.com/investors/news/mudrick-capital-acquisition-corp-acquires-hycroft-mining-corp-to-
`create-publicly-traded-world-class-mining-company
`
`
`
`5
`
`

`

`Case 1:23-cv-12302-FDS Document 211 Filed 05/31/24 Page 6 of 1598
`
`7. AMC TIMELINE APRIL OF 2022…………………………………………………………………248
`A. THE PROJECT POPCORN SCHEME PIVOTS FROM A SHAREHOLDER RIGHTS
`OFFERING (ZERO DILUTION IF STOCKHOLDER EXERCISES THEIR RIGHTS) TO
`AN ATM (OUTRIGHT DILUTION)………………………………………………………263
`B. ON AUGUST 4TH, 2022 AMC ANNOUNCES THE CREATION OF APES……………..270
`C. APE UNITS START TRADING – THE PROJECT POPCORN SCHEME MOVES……..278
`FORWARD WITH THE CREATION OF THE APE AND AMC SPREAD
`D. THE RARITY OF CONVERTIBLE PREFERRED STOCK DIVIDEND IN UNITS…….280
`
`
`8. ELEMENTS OF PROJECT POPCORN……………………………………………………………281
`A. FIRST ELEMENT OF THE PROJECT POPCORN SCHEME……………………………281
`B. SEPTEMBER 21ST, 2022, AMC’S PRICING COMMITTEE AUTHORIZES AMC TO SELL
`UP TO 425 MILLION APES IN A-T-M OFFERINGS…………………………………….283
`C. SECOND ELEMENT OF THE PROJECT POPCORN SCHEME………………….……..284
`D. THIRD ELEMENT OF THE PROJECT POPCORN SCHEME - THE FLOOR TO SELL APE
`IS LOWERED TO $1……………………………………………………………….………285
`9. ANTARA INTRODUCTION……………………………………………………………………….290
`10. AMC TIMELINE OF JANUARY-FEBRUARY OF 2023………………………………………..298
`A. FEBRUARY 20TH, 2023 TWO CLASS ACTIONS LAWSUITS ARE FILED AGAINST THE
`AMC BOARD AND FORMER BOARD MEMBERS……………………………………….308
`
`
`11. ALLEGHENY PLAINTIFF………………………………………………………………………..309
`A. ALLEGHENY IS “FRIENDLY PLAINTIFF” USED AS A LEGAL HEDGE……………….309
`B. MARK LEBOVITCH- LEAD ATTORNEY FROM BERNSTEIN LITOWITZ BERGER &
`GROSSMANN LLP…………………………………………………………………………..311
`C. ACERS………………………………………………………………………………………..313
`D. ACERS PENSION FUND TREASURER JOHN WEINSTEIN……………………………..316
`E. THE JEWISH BUSINESS NETWORK (JPN) OF PHILADELPHIA……………………….318
`F. GRANT & EISENHOFER……………………………………………………………………318
`G. GRANT EISENHOFER AND THE APOLLO CONNECTION……………………………..318
`H. MORE UNLIKELY COINCIDENCES……………………………………………………….320
`I. ANTARA CLAW BACK CASE IN NY WAS ANOTHER “FRIENDLY PLAINTIFF”……..322
`12. AMC 2023 TIMELINE CONTINUED……………………………………………………………363
`A. DEFENDANT NYSE IS GIVEN WRITTEN NOTICE………………………………….….363
`B. FEBRUARY 28TH, 2023 EARNINGS CALL ADAM ARON'S SEVEN REASONS TO
`VOTE YES ON THE THREE PROPOSALS……………………………………………….366
`C. ANALYSIS OF ARON’S SEVEN REASONS TO VOTE YES……………………………367
`D. BROADER IMPLICATIONS OF “BLANK CHECK” PREFERRED SHARES…………..369
`E. ANALYSIS OF THE FAIRNESS OF THE ANTARA TRANSACTION………………….371
`F. MANIPULATED MARCH 14TH 2023 CORPORATE VOTE…………………………….373
`G. VOTE ANALYSIS…………………………………………………………………………..373
`H. APRIL 25TH, 2023 TELEPHONIC CONFERENCE CALL……………………………….377
`I. LEAD PLAINTIFF AND AMC DEFENDANTS FILE THEIR SETTLEMENT BRIEFS...379
`J. OBJECTORS DISCOVERY MOTIONS ARE FINALLY GRANTED……………………381
`K. USBALDO MUNOZ IS REMOVED AS A LEAD PLAINTIFF DI 344…………………..387
`L. STRATEGIC CLAIMS SERVICES………………………………………………………...398
`M. JUNE 29TH – 30TH, 2023 SETTLEMENT HEARING……………………………………405
`N. THE JULY 21, 2023 OPINION - JUDGE ZURN DENIES THE SETTLEMENT…………406
`O. ADAM ARON’S JULY 23RD, 2023 LETTER TO SHAREHOLDERS…………………...406
`P. JUDGE ZURN’S AUGUST 11TH, 2023 MEMORANDUM AND DECISION…………...410
`6
`
`
`
`

`

`Case 1:23-cv-12302-FDS Document 211 Filed 05/31/24 Page 7 of 1598
`Case 1:23-cv-12302-FDS Document 211 Filed 05/31/24 Page 7 of 1598
`
`Q. AUGUST 24TH, 2023 CONVERSION REVERSE SPLIT IS EFFECTUATED…………..415
`Q. AUGUST 24TH, 2023 CONVERSION REVERSE SPLIT IS EFFECTUATED.............. 415
`13. ADAM ARON’S BUSINESS CHARACTER…………………………………………………….428
`13. ADAM ARON’S BUSINESS CHARACTER.............ccececeeee eee eee eee teeta eee nena een ena ee eaes 428
`A. ARON’S MEET IN GREET AT SUGAR LAND, TEXAS………………………………….428
`A. ARON’S MEET IN GREET AT SUGAR LAND,TEXAS. ........ 00sec ceceeee tenet eee eee enes428
`B. ADAM ARON LIED TO SHAREHOLDERS ABOUT APE………………………………..429
`B. ADAM ARON LIED TO SHAREHOLDERS ABOUTAPE..............:cceeeeeeeeeeeee eee eee 429
`C. NOVEMBER 3RD 2021 PRESENTATION-ADAM ARON COMMINGLING ARQIT WITH
`C. NOVEMBER 3RD 2021 PRESENTATION-ADAM ARON COMMINGLING ARQIT WITH
`AMC…………………………………………………………………………………………..433
`AMC. 000NIN EEE IE EI IE EI IE EI EI Hr Ent nttnt tit 433
`D. ARON IS INHERENTLY DISHONEST AND HAS NEVER BEEN LOYAL TO AMC
`D. ARON IS INHERENTLY DISHONEST AND HAS NEVER BEEN LOYAL TO AMC
`SHAREHOLDERS OR TO HIS PARTNERS………………………………………………..434
`SHAREHOLDERSOR TO HIS PARTNERS. ........ 0. cc ceeee teeter eee eee e eee eee 434
`E. IGNORING SHAREHOLDERS REQUEST FOR SHARE COUNT………………………..439
`IGNORING SHAREHOLDERS REQUEST FOR SHARE COUNT.............::ceteeeeee eens439
`E.
`F. WASTEFUL SPENDING AND LOSSES……………………………………………………441
`F. WASTEFUL SPENDING AND LOSSES.......0. 0... ce eee eee eee eee eens ened 441
`G. LASER PROJECTORS DURING COVID…………………………………………………...444
`G. LASER PROJECTORS DURING COVID.......... 0c cece eect eee eee nena nena eee naee 444
`H. ADAM ARON BLACKMAIL………………………………………………………………..446
`H. ADAM ARON BLACKMAIL. ....0. 00.0.ee nna ee tenet teen ene ents 446
`I. ADAM ARON KILLS STOCK VOLATILITY………………………………………………450
`I. ADAM ARONKILLS STOCK VOLATILITY......... 0. cece eee ee eee teeta ee ened 450
`14. AMC’S DEBT AND FINANCIAL ANALYSIS …………………………………………………..450
`14. AMC’S DEBT AND FINANCIAL ANALYSIS 00000.e nee eee ene ene 450
`A. THE DELIBERATE CONVERGENCE OF DEBT MATURITIES………………………….450
`A. THE DELIBERATE CONVERGENCE OF DEBT MATURITIES..............:::::eeeeeeee eee 450
`B. ATYPICAL DEBT STRCUTURE AGREEMENTS………………………………………….454
`B. ATYPICAL DEBT STRCUTURE AGREEMENTSB.............:ececeeeee eee eee eee eee eeeaeeeaes 454
`C. ANALYSIS OF DEBT STRUCTURE AND TRENDS………………………………………455
`C. ANALYSIS OF DEBT STRUCTURE AND TRENDS. ......... 0.0: cece e eee eee teen eee eee ees 455
`D. ASSET MANAGEMENT AND INVESTMENT DECISIONS………………………………455
`D. ASSET MANAGEMENT AND INVESTMENTDECISIONS......... 0.00. :eeseeeeeeee teeta ees 455
`E. REVENUE AND EXPENSE TRENDS……………………………………………………....456
`E. REVENUE AND EXPENSETRENDS .......0. 00.0 cceceee cece eee eee ene eee een e ae eaeas 456
`F. TYPES AND TERMS OF DEBT…………………………………………………………….456
`F. TYPES AND TERMSOF DEBT......... 0... cc cece eee ene een ea etnias 456
`G. FINANCIAL IMPACT OF DEBT STRATEGY……………………………………………...457
`G. FINANCIAL IMPACT OF DEBT STRATEGY....... 0.0... cece cee erect eee eee ee eee eens eee eee 457
`H. INDICATORS OF STRATEGIC INSOLVENCY PREPARATION VS. OTHER MOTIVES.458
`H.
`INDICATORS OF STRATEGIC INSOLVENCY PREPARATIONVS. OTHER MOTIVES.458
`I. ANALYSIS OF REVENUE AND EXPENSE TRENDS……………………………………..461
`I. ANALYSIS OF REVENUE AND EXPENSE TRENDS......... 00... ce cecee eect eee ee eee e eens 461
`J. VOTING TO REMOVE ACQUISITION RESTRICTIONS…………………………………463
`J. VOTING TO REMOVE ACQUISITION RESTRICTIONS. ........... 0: cceceeeeee eee ee rere ee ee 463
`K. SEC LETTER FROM WEIL, GOTSHAL & MANGES……………………………………..466
`K. SEC LETTER FROM WEIL, GOTSHAL & MANGES. ......... 0c: ceceeee ee eee ee eee ete ee eee466
`L. MANIPULATION OF CORPORATE BONDS AND CREDIT DEFAULT SWAPS………...469
`L. MANIPULATION OF CORPORATE BONDS AND CREDIT DEFAULT SWAPS............ 469
`M. DELIBERATING DEFERRING AMC DEBT………………………………………………..475
`M. DELIBERATING DEFERRING AMC DEBT.......... 0.0 .ccc cece eee eee ee eee eee enna e eens 475
`N. DEBT CAPITALIZATION……………………………………………………………………476
`N. DEBT CAPITALIZATION. .....0.0. 0... cect tantra nana ta eneaees 476
`O. CAPITAL STRUCTURING…………………………………………………………………..478
`O. CAPITAL STRUCTURING. ...00 000.nent ene nti 478
`P. PRIVATE PLACEMENT SECURITIES……………………………………………………...479
`P. PRIVATE PLACEMENT SECURITIES......... 0... cc cceeeeeeee ee eee ee eee ee eee eee e eee nena eens 479
`Q. A HISTORY OF RIGGED VOTING…………………………………………………………481
`Q. AHISTORY OF RIGGED VOTING......... 0... c cece ee ea ee tea ee eaten enna 481
`15. ENDING – SUMMARY…………………………………………………………………………...492
`15. ENDING — SUMMARY...0000RII I IEt innate tat 492
`16. LEGAL ANALYSIS AND CLAIMS………………………………………………………………493
`16. LEGAL ANALYSIS AND CLAIMS....0. 0.0... cect teen e nen ne eae et ened 493
`AMC ENTERTAINMENT……………………………………………………………….494
`A.
`A.
`AMC ENTERTAINMENT. ....... 0... c cette tenn en eine 494
`B.
`CITIGROUP, B. RILEY, CREDIT SUISSE AND GOLDMAN SACHS………………..500
`B.
`CITIGROUP, B. RILEY, CREDIT SUISSE AND GOLDMANSACHSG.................44: 300
`C.
`ARON’S CHARACTER………………………………………………………………….502
`C.
`ARON’S CHARACTER...tnrrr ne nt nenie 302
`D.
`APE……………………………………………………………………………………….505
`Dz
`APE.0HE nent trea nena ea tat neneentes 305
`E.
`CITIGROUP GLOBAL MARKETS, B. RILEY AND GOLDMAN SACHS…………...509
`E.
`CITIGROUP GLOBAL MARKETS, B. RILEY AND GOLDMANSACHB............... 309
`F.
`WEIL, GOTSHAL, AND MANGES AND MOELIS……………………………………510
`F,
`WEIL, GOTSHAL, AND MANGES AND MOELIS...... 00... cc cece eeeeeeeee eee ee ee eee ees 310
`G.
`B. RILEY…………………………………………………………………………………512
`G.
`B. RILEY...I rr nt nnn nett naed 312
`H.
`D.F. KING………………………………………………………………………………..513
`H.
`DD Cee. @0©Se nee 313
`I.
`NYSE……………………………………………………………………………………..514
`I.
`NYSE..00I I I I IEEE IE EEE Een tnt 314
`J.
`ANTARA CAPITAL……………………………………………………………………...515
`J.
`ANTARA CAPITAL. ..00. 00 inH neta tate 315
`K.
`CAUSE OF ACTION……………………………………………………………………..517
`K.
`CAUSEOF ACTION... ln rnnr niet nt eae tia 317
`17. HEDGE FUNDS IN JANUARY 2021 TIMELINE……………………………………………….644
`17. HEDGE FUNDS IN JANUARY2021 TIMELINE. ........ 0.00.0 ce ceeeee eee eee eee eee ee enna eee eees 644
`A. A RIGGED MARKET………………………………………………………………………..644
`A. ARIGGED MARKET...00... eaten t tent nene ene 644
`
`
`
`7
`7
`
`

`

`Case 1:23-cv-12302-FDS Document 211 Filed 05/31/24 Page 8 of 1598
`Case 1:23-cv-12302-FDS Document 211 Filed 05/31/24 Page 8 of 1598
`
`B. RETAIL INVESTORS………………………………………………………………………..647
`B. RETAIL INVESTORS. .....0.00 0.nn nent nner 647
`C. THE LAWS WORK AGAINST RETAIL…………………………………………………….649
`C. THE LAWS WORK AGAINSTRETAIL. ..... 0.0... cece teers eee e ented 649
`D. LACK OF ENFORCEMENT…………………………………………………………………650
`D. LACK OF ENFORCEMENT...... 000... cect e tec renee tren ne eae 650
`E. THE MEME STOCK REVOLUTION………………………………………………………..651
`E. THE MEME STOCK REVOLUTION. ........ 0... cc ceeee eee eee rene eae e nears na eas 651
`F. SYSTEMIC RISK, SROS, PAST INCIDENTS OF LIKEN BEHAVIOR……………………654
`F. SYSTEMIC RISK, SROS, PAST INCIDENTS OF LIKEN BEHAVIOR...............:::0:00 654
`G. DEFENDANT’S FAULTY SHORT THESIS…………………………………………………665
`G. DEFENDANT’S FAULTY SHORT THESIS............ 0c cecee eee ee eee eee eee eee eee eeeeene eas 665
`H. THE CASCADING EFFECT OF THE MEME STOCKS……………………………………666
`H. THE CASCADING EFFECT OF THE MEMESTOCKS. ........ 0.00 cceeeeeeeeeee teens eee eeeees 666
`18. HEDGE FUND ALLEGATIONS………………………………………………………………….667
`18. HEDGE FUND ALLEGATIONS.....00000ne neat neneneiees 667
`A. CITIGROUP…………………………………………………………………………………..667
`A. CITIGROUP. ...0.0I I IE HU EE nn tnnine nae taas 667
`B. CREDIT SUISSE & UBS……………………………………………………………………..672
`B. CREDIT SUISSE & UBS....0.0.tn entre natas 672
`C. MORGAN STANLEY………………………………………………………………………...679
`C. MORGANSTANLEY....0.0...erent t en ena enna ea egaes 679
`D. VIRTU FINANCIAL………………………………………………………………………….682
`D. VIRTU FINANCIAL. ...000.0c entre ene ena ea nena eat enegs 682
`E. CITADEL SECURITIES……………………………………………………………………...703
`E. CITADEL SECURITIES....0.00.nr teat ta eae tneaeas 703
`F. SUSQUEHANNA SECURITIES, LLC………………………………………………………688
`F. SUSQUEHANNA SECURITIES, LLC.....0 0...eee enna nena ened 688
`G. GOLDMAN SACHS………………………………………………………………………….708
`G. GOLDMANSACHS...0. rent tnt tenn nena ee taes 708
`H. HSBC, BANK OF AMERICA, B.RILEY, BARCLAYS, J.P. MORGAN…………………... 711
`H. HSBC, BANK OF AMERICA, B.RILEY, BARCLAYS, J.P. MORGAN.............:: cee eee 711
`19. HEDGE FUNDS AFTER JANUARY 27TH ……………………………………………………….721
`19. HEDGE FUNDS AFTER JANUARY277) oo... .occcccccccecceeeeeeeeeee eee eeeeeeeeneeeeaeeeaeeeneeeegees721
`20. SHORT SELLING, DEFENDANTS’ WIDESPREAD CONSPIRACY TO MANIPULATE AS
`20. SHORT SELLING, DEFENDANTS’ WIDESPREAD CONSPIRACY TO MANIPULATE AS
`RESULT OF JANUARY 27TH 2021……………………………………………………………..…..721
`RESULT OF JANUARY27TH 2021.00.00...ccc eens nant en eaee nets 721
`A. DEFENDANTS' FINANCIAL INCENTIVES TO SUPPRESS AMC AND APE…………...723
`A. DEFENDANTS' FINANCIAL INCENTIVES TO SUPPRESS AMC AND APE............... 723
`B. DEFENDANTS CONSPIRED TO ARTIFICIALLY SUPPRESS AMC……………………..724
`B. DEFENDANTS CONSPIRED TO ARTIFICIALLY SUPPRESS AMC..............::eeeeeeees 724
`C. DEFENDANTS COLLUDED WITH EACH OTHER AND INTERNATIONAL PARTNERS
`C. DEFENDANTS COLLUDED WITH EACH OTHER AND INTERNATIONAL PARTNERS
`TO SUPPRESS AMC AND APE……………………………………………………………..727
`TO SUPPRESS AMC AND APE... 0... cece neta e tate ene enna eaas 727
`D. DEFENDANTS CONSPIRED TO MANIPULATE AMC TO BENEFIT INDIVIDUAL
`D. DEFENDANTS CONSPIRED TO MANIPULATE AMC TO BENEFIT INDIVIDUAL
`TRADING POSITIONS………………………………………………………………………728
`TRADING POSITIONS........0. 0... cect etre rena ee tea ee tent nene eae 728
`E. DEFENDANTS’ AMC MANIPULATION HARMED NUMEROUS TYPES OF FINANCIAL
`E. DEFENDANTS’ AMC MANIPULATION HARMED NUMEROUSTYPESOF FINANCIAL
`INVESTMENTS GLOBALLY……………………………………………………………….729
`INVESTMENTS GLOBALLY......... 0.0.0 cc cect ener ne ena ea nena eee eneee 729
`F. THE DISCREPANCY BETWEEN MARKET MAKERS DEFENDANTS' REPORTED AMC
`F. THE DISCREPANCY BETWEEN MARKET MAKERS DEFENDANTS' REPORTED AMC
`AND THEIR SPREADS INDICATES THE BANKS MISREPRESENTED THEIR
`AND THEIR SPREADS INDICATES THE BANKS MISREPRESENTED THEIR
`BORROWING COSTS……………………………………………………………………….731
`BORROWINGCOSTS. ..... 00.cerr nr anne enna tne ne nnes 731
`G. AME AND APE DIVERGENCE FROM ITS HISTORICAL RELATIONSHIP WITH THE
`G. AME AND APE DIVERGENCE FROM ITS HISTORICAL RELATIONSHIP WITH THE
`BROADER MARKET INDICES, INDICATES SUPPRESSION…………………………...731
`BROADER MARKETINDICES, INDICATES SUPPRESSION. ............::c:eeee eee eee ee ees 731
`H. SHORT HEDGE FUND DEFENDANTS FACED DIFFICULT FINANCIAL
`H. SHORT HEDGE FUND DEFENDANTS FACED DIFFICULT FINANCIAL
`CIRc*msTANCES WHICH WERE NOT REFLECTED IN THEIR FINANCIAL
`CIRc*msTANCES WHICH WERE NOT REFLECTEDIN THEIR FINANCIAL
`SUBMISSIONS……………………………………………………………………………….733
`SUBMISSIONS. ....00.ttt nt inetd 733
`I. DEFENDANTS MADE MATERIAL MISREPRESENTATIONS AND CONCEALED
`I. DEFENDANTS MADE MATERIAL MISREPRESENTATIONS AND CONCEALED
`INFORMATION THEY HAD A DUTY TO DISCLOSE TO REGULATORS AND SROS...734
`INFORMATION THEY HAD A DUTY TO DISCLOSE TO REGULATORSAND SROS...734
`J. APE DIVIDEND DISPARITIES……………………………………………………………...734
`J. APE DIVIDEND DISPARITIES. ........... 0. ct ttene iene nena ee tate 734
`K. COVERING UP NAKED SHORTING……………………………………………………….737
`K. COVERING UP NAKED SHORTING. ........... 00. ce cece eee eee eee etree eee ena eee neat enees 737
`L. REGULATORY EXEMPTIONS……………………………………………………………...741
`L. REGULATORY EXEMPTIONS......... 0.0.0: cece eee eee ee eee e atten ene a nega 741
`M. REGULATORY DIVERGENCE…………………………………………………………..….744
`M. REGULATORY DIVERGENCE. ........... cectne iene nena eaaneeed 744
`N. DERIVATIVES OBFUSCATION THROUGH SWAPS AND EXOTICS……………………746
`N. DERIVATIVES OBFUSCATION THROUGH SWAPS AND EXOTICS.............. cece 746
`O. LATE STOCK BORROWING………………………………………………………………..748
`O. LATE STOCK BORROWING. .....0.. 0...nr tenet entree 748
`P. CAUSE OF ACTION…………………………………………………………………………755
`P. CAUSE OF ACTION....0.... 0ccc ene renee ee tenet enenene eas 755
`21. TECHNIQUES, TACTICS AND PROCEDURES OF AMC STOCK MANIPULATION……….767
`21. TECHNIQUES, TACTICS AND PROCEDURES OF AMC STOCK MANIPULATION..........767
`A. MARKET MAKER SIGNALS OTHER DEFENDANTS……………………………………768
`A. MARKET MAKER SIGNALS OTHER DEFENDANTS. ........ 0.00.0 ceeeeeeeeeeeeee tee eeeeee eee 768
`B. BARCODING…………………………………………………………………………………769
`B. BARCODING.........0.0.nt innate ea tat nenene eas 769
`8
`8
`
`
`
`

`

`Case 1:23-cv-12302-FDS Document 211 Filed 05/31/24 Page 9 of 1598
`
`C. ODD LOT AND OUT OF SEQUENCE TRADING…………………………………………773
`D. ODD LOT FORMULAIC CAUSATION……………………………………………………..787
`E. OUT OF SEQUENCE………………………………………………………………………...788
`F. BURST BASKET MANIPULATION………………………………………………………...796
`G. ARTIFICIAL INTELLIGENCE AND BOTS………………………………………………...805
`H. FINANCIAL MEDIA…………………………………………………………………………805
`I. POWER HOUR……………………………………………………………………………….812
`J. SHARE COUNT……………………………………………………………………………...813
`K. SPOOFING……………………………………………………………………………………815
`L. CAUSE OF ACTION…………………………………………………………………………835
`
`22. DARK POOL AND PFOF FACTUAL ALLEGATIONS………………………………………….868
` A. DARK POOLS………………………………………………………………………………..868
` B. INCENTIVIZED SALES AGREEMENTS WITH OTHER ATS PROVIDERS…………….872
` C. THE ROLE OF SELF-REGULATING ORGANIZATIONS IN DARK POOL TRADING…878
` D. DARK POOL’S FRAUDULENT CONCEALMENT OF PRICE DISCOVERY……………886
` E. AMC’S BARRIERS TO ENTRY TO “LIT” EXCHANGES AND MARKET………………889
` F. IMPACT ON NBBO AND MARKET TRANSPARENCY…………………………………..890
` G. RESTRAINT OF TRADE THROUGH DARK POOLS……………………………………..890
` H. PFOF PAYMENT FOR ORDER FLOW NEGATES UPTICK …………………………..892
` I. PFOF PAYMENT FOR ORDER FLOW……………………………………………………..892
` J. ZERO-COMMISSION TRADING…………………………………………………………...894
`K. CONCERNS OVER EXECUTION QUALITY……………………………………………….896
`L. CONCERNS OVER MARKET QUALITY…………………………………………………...898
` M. CONCERNS OVER INTERNALIZATION RULES IN OPTION…………………………...899
` N. CONCERNS OVER BROKER INCENTIVES………………………………………………902
` O. AMC’S PFOF ISSUE…………………………………………………………………………905
` P. HOW PFOF WAS USED TO TRADE AGAINST RETAIL TRADERS IN AMC OPTIONS.906
` Q. THE HORIZONTAL AGREEMENTS FACILITATE ANTICOMPETITIVE PRICING
` R. PROBLEM STATEMENT……………………………………………………………………909
` S. PFOF AND THE ILLUSION OF PRICE IMPROVEMENT………………………………...910
` T. MARKET IMPACT…………………………………………………………………………..912
` U. ISSUES CONCERNING RETAIL INVESTORS…………………………………………….913
` V. AMC ALLEGATIONS………………………………………………………………………...914
` W. PFOF MARKET MAKERS ARE VIOLATING GRAMM-LEACH-BLILY ISSUES……….915
` X. CAUSE OF ACTION…………………………………………………………………………..921
`
`23.