Virtu Wins Rare Victory at the Lead-Plaintiff Stage in Putative Securities Class Action

Representing Virtu Americas LLC, Paul, Weiss won a significant victory in a putative securities class action brought by Genius Group Limited, when the U.S. District Court for the Southern District of New York denied Genius’ lead-plaintiff motion and rejected its proposal to reopen the lead plaintiff appointment process. In a decision that sharply narrows the scope and potential damages in this case, the judge ordered that the case proceed on an individual basis only—a major victory for Virtu.

Genius, a NYSE-listed education technology company, sued Citadel Securities and Virtu in November 2025, claiming that, between April 2022 and May 2025, they manipulated the price of Genius’ shares via spoofing—specifically, that they repeatedly placed and quickly canceled orders that distorted the price of the company’s shares. Genius brought claims of market manipulation and fraud under Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 and Section 9(a)(2) of the Exchange Act.

In January, Genius moved to be appointed lead plaintiff and represent a putative class of its own shareholders. The defendants took the rare step of opposing the motion, arguing that Genius failed to meet the typicality and adequacy requirements of Federal Rule of Civil Procedure 23(a), which governs the lead plaintiff appointment process in class actions. While noting that it is unusual for defendants to oppose an uncontested lead plaintiff motion, U.S. District Judge Valerie Caproni found the defendants’ opposition appropriate in this case. The judge noted that an issuer with atypical, largely non-market transactions subject to unique defenses, including statute of limitations and reliance issues tied to its prior investigation of manipulative conduct alleged in the complaint, cannot adequately represent ordinary shareholders. The court also rejected Genius’ proposal to reopen the lead plaintiff appointment process, noting that reopening the process would set dangerous precedent, potentially encouraging lawyer-driven maneuvering.

The Paul, Weiss team includes litigation partners Audra Soloway, Andrew Gordon, Alison Benedon and Jessica Carey, and counsel Daniel Sinnreich and Daniel Negless.