# Contant v. Bank Of America Corporation

> District Court, S.D. New York · October 25, 2021

URL: https://www.frixlaw.com/law-library/cases/10336136

## Case

- **Court:** District Court, S.D. New York
- **Decided:** October 25, 2021
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

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## Opinion text

vs DERGER) VIUNIAGUE
MICHAEL C. DELL’ANGELO MANAGING SHAREHOLDE
d 215.875.3080 m 610.608.8766 mdellangelo@bm.n
September 23, 2021
VIA ECF
Honorable Lorna G. Schofield REDACTED VERSION
United States District Judge
Thurgood Marshall U.S. Courthouse
40 Foley Square
New York, NY 10007
RE: Contant, et al. v. Bank of America Corp., et al., No. 17-ev-3139
Dear Judge Schofield:
Pursuant to Class Counsel’s September 15, letter to the Court, (ECF 485), we respectfully
request review of the unresolved dispute regarding AMA Capital LLC’s (“AMA”) late Option
Two claim. AMA contests the Claims Administrator’s August 13, 2021 assessment (“Claim
Assessment’) (Ex. A) denying transactions with

. As discussed, AMA’s late claim should be denied in full or the
disputed denials should be upheld because it was months late, and, despite several revisions, AMA
did not submit the required documentation to validate the denied transactions which, regardless,
do not meet the Settlement Class Definitions and the late claim materially delayed distribution of
the Settlement Proceeds to valid claimants. Of the 11,311 claims received, the only dispute is as
to AMA’s late claim which is the only impediment to distribution of the settlement funds.
Background of AMA’s Late Claim
After missing the March 19, 2021 claim submission deadline, on May 12, 2021, AMA
asked to submit a late claim because it did not receive direct notice of the Settlement. AMA did
not receive direct notice because its transactions do not appear in the transactional data that Class
Counsel obtained from retail foreign exchange dealers (“RFEDs”) in the litigation. Given AMA’s
representations and because timely claims were still being processed and it was not apparent that
the settlement distribution would be materially delayed, on May 14, 2021, Class Counsel exercised
their discretion to allow AMA to submit a late claim offering no “guarantee that [AMA] can
participate in the distribution” and required the submission within seven (7) days. (Ex. B).
On May 20, AMA submitted an Option Two Claim Spreadsheet with millions of
transactions but no “detailed transactional records (e.g., account statements and transaction
confirmations)” as required by the Court-approved Claim Form. (ECF 467 at 3). On May 24, Class
Counsel informed AMA that supporting documentation was required and requested it by May 28.
(Ex. C). On May 26, AMA responded, but did not supply supporting documentation. (Ex. D).
On June 2, Class Counsel asked AMA to identify transactions on its spreadsheet for which
it had also made a claim in FOREX and reiterated that the Claim Form stated AMA “must submit
detailed transactional records (e.g., account statements and transaction confirmations) and fill out
and submit the ‘Option Two Claim Form Spreadsheet.’” (Ex. E emphasis added). On June 4, in
response to AMA’s request to accept exemplar trading records in lieu of a complete set of the
required transactional records, Class Counsel’s experts randomly selected 300 transactions in
AMA’s spreadsheet and requested supporting detailed transactional records. AMA was told this

| 1818 MARKET STREET, SUITE 3600

was needed to decide if “the submission of complete transaction data supporting all approximately
submitted trades is needed” and that “submission of additional (or potentially complete)
data supporting AMA’s claim” may still be required. On June 6, AMA was asked again to submit
the detailed transactional records to consider whether the “claim could be validated without all
detailed transactional data” and informed “no decision has been made about whether less than all
transactional data will suffice to support a claim.” (Ex. F). AMA did not do so. On June 7, AMA
submitted “cut and paste” copies of Fix messages that it created for three transactions. (Ex. G). On
June 9, stated that this was insufficient to validate the late claim and lacked counterparty and
location information and requested the required documentation. (Ex. H). AMA never produced it.
On June 11, AMA’s counsel and Class Counsel engaged in a telephonic discussion.
AMA’s counsel stated that he had reviewed the Court’s Orders regarding the award of attorneys’
fees and understood Class Counsel should be “motivated” to resolve AMA’s late claim because
Class Counsel would not receive 75% of their attorneys’ fee award until all claims were resolved.
Class Counsel took considerable exception to that statement and told AMA’s counsel that it was
their obligation to recommend the payment of valid claims and the denial of invalid claims.
On June 25, AMA provided original copies of some Fix messages and a few account
statements but not a complete set of detailed transactional records that correspond to its
spreadsheet or even the requested exemplars. On July 1, Class Counsel responded that those
materials were still insufficient to validate the submitted transactions and that detailed
transactional records must correspond to the transactions on its Option Two Spreadsheet. (Ex. I).
On July 4, AMA responded that it lacked detailed transactional records to validate every
transaction on its spreadsheet and proposed an audit of “probably a few random months” and proof
that a trading relationship existed. (Ex. J). On July 8, the proposal was rejected because it is
inconsistent with the Court approved Claim Form and Class Counsel and their experts had
identified inconsistencies in the limited documentation that AMA had submitted such that they did
not believe that an “audit” would be a reliable method of validation of AMA’s claim. (Ex. K).
On July 16, AMA further revised its late claim stating: “The total number of trades is
somewhat under one half and the volume is approximately one third the original submission.” (Ex.
L at 1). It consisted of “Category A” transactions with “certain FIX messages and statements [that]
specifically disclose that the intermediary traded with a Defendant” and “Category B” transactions
that “do not have documentation specifically identifying the Defendant at the other end of the
trade.” (Id. at 4). Without specification, AMA also acknowledged it was seeking compensation for
duplicate transactions in Contant, an indirect purchaser action, and In re Foreign Exch. Benchmark
Rates Antitrust Litig., No. 13-cv-7789-LGS (“FOREX”), a direct purchaser action. (Id. at 2). To
date, despite repeated requests, AMA has not identified the duplicate transactions.
AMA’s submitted materials were extensively analyzed by Class Counsel’s subject matter
experts to assess the completeness and accuracy of submitted materials, attempt to link transactions
in statements and Fix messages to transactions in AMA’s spreadsheet and to determine the
mechanics of and parties to the transactions, and whether each identified transaction was directly
with one of the in the spreadsheets and in turn that venue was trading with a FOREX
Defendant. They also provided insights and explanations as to information contained in the Fix
messages and statements and the purpose and role of primary brokers and electronic trading
platforms in FX transactions and who are the parties to FX transactions when using prime brokers
and/or electronic trading platforms. The Claim Assessment was based, in part, upon extensive
analysis by Class Counsel and its subject matter experts, and approved in part and denied in part
the millions of transactions with identified in AMA’s Option Two Spreadsheet, as
follows: iii’

|

On August 26, AMA sent “several additional documents” and requested an audit in lieu of
compliance with the requirement to submit detailed transactional records. Class Counsel did not
agree to an audit, supplementation of the late claim or to a further extension of time. (Ex. M)
On September 2, AMA sent a lengthy response to the Claim Assessment with additional
materials. (“Assessment Response”) (Ex. N). AMA stated it was not contesting the denial of its
transactions through ‘ .” Ud.
at 11). AMA also stated: “the FOREX claim administrator has preliminarily accepted
claims in that case.” (/d. at 2). Despite that, AMA contests the denial of
transactions here but has not identified any duplicate transactions. Later that day, AMA’s counsel
called Class Counsel stating AMA was “determined to take [AMA’s claim assessment] to the
Court” but acknowledged the Settlement Agreement provided for this resolution process. (ECF
483). Class Counsel later wrote to AMA’s counsel to address the truth of certain representations
AMA’s counsel made to the Claims Administrator regarding the claims process. (Ex. O).
On September 13, Class Counsel, its experts, and the Claims Administrator, had a lengthy
call with AMA and its counsel to attempt to resolve the dispute. The discussion focused on the
role prime brokers played in AMA’s transactions. Among other things, AMA stated (1) AMA does
not have prime brokerage statements for a significant number of the transactions on its Claim Two
Spreadsheet; (11) the statements it does have lack details about the underlying FX transactions; and
it did not submit those it has because it “didn’t think they would be helpful.”
On September 15, Class Counsel and AMA’s counsel again discussed why AMA’s prime
broker transactions do not satisfy the Settlement Class Definitions. AMA’s counsel disagreed and
referenced unspecified CFTC materials without elaboration. Class Counsel advised that AMA had
not articulated a basis to reverse the Claim Assessment and AMA had not provided detailed
transactional records with its late claim for most denied transactions. Class Counsel later requested
the CFTC materials AMA referenced on the call, but AMA has not supplied it or a citation.
The Court Should Exercise Its Discretion to Deny AMA’s Late Claim
This Court may deny AMA’s claim in full for failure to meet the filing deadline. /n re
Oxford Health Plans, Inc., 383 Fed. Appx. 43, 45 (2d Cir. 2010). “Excusable neglect” sufficient
to submit a late-filed claim, is based on: “(1) the danger of prejudice to the non-movant; (2)
whether the movant acted in good faith; (3) the length of the delay and its potential effect on

judicial proceedings; and (4) the reason for the delay.” In re VISA Check/Mastermoney Litig., No.
96-cv-2538, 2009 U.S. Dist. LEXIS 130182 *7 (E.D.N.Y. Nov. 19, 2009) (citing Pioneer
Investment Serv. Co. v. Brunswick Assocs. Ltd. Partnership, 507 U.S. 380, 391 (1993)). The
Second Circuit “take[s] a ‘hard line’ when applying the Pioneer factors” because “the legal system
relies on deadlines to function, and [] ‘every missed deadline’ should not become ‘the occasion for
the embarkation on extensive trial and appellate litigation to determine the equities of enforcing
the bar.’” In re Oxford Health Plans, Inc., 383 Fed. Appx. At 45 (quoting Silivanich v. Celebrity
Cruises, Inc., 333 F.3d 355, 367-68 (2d Cir. 2003)).
Courts assess whether accepting the late-filed claim will materially reduce recoveries to
other timely claimants or otherwise impair the timely administration of the settlement. Id. at 46
(affirming exclusion of late-filed claims where “at least some prejudice to claimants who had
timely filed [would result] by diminishing those claimants’ pro rata share of the settlement funds);
Black v. Diamond, 163 Fed. Appx. 58, 61(2d. Cir. 2006). AMA’s late claim would prejudice other
claimants because it would substantially reduce their pro-rata recoveries. Thus, AMA’s claim is
not the “ordinary case” where there is “little prejudice or disruption caused by allowing a late-
submitted claim.” Id. at 45. Compare Zients v. La Morte, 459 F.2d 628, 630-31 (2d Cir. 1972)
(accepting late-filed claims “would result in only a miniscule reduction in recovery by timely
claimants”); Cassese v. Wash. Mut., Inc., No. 05-cv-2724, 2013 U.S. Dist. LEXIS 142120, *5
(E.D.N.Y. Oct. 1, 2013) (accepting certain late claims resulting in less than a 5% difference in
payouts to timely claims). AMA cannot justify missing the deadline given the extensive
publication notice, failure to submit the required documentation for months and refusal to identify
potentially duplicative transactions in FOREX – all of which indicate AMA has not acted in good
faith. The timing of AMA’s submission and the manner in which it was made unnecessarily
delayed the final distribution motion thereby delaying payments to settlement class members.
AMA Did Not Timely Submit the Required Detailed Transactional Records
AMA did not submit the required “detailed transactional records” to corroborate the denied
transactions self-identified on its Option Two Spreadsheet for
. Those records enable verification of the
transactions claimants self-identify on the spreadsheet were, in fact, made and meet the Settlement
Class Definitions. Accordingly, the denial of AMA’s undocumented transactions should be upheld
regardless of whether they meet the Settlement Class Definition; however, most, if not all, do not.
The Transactions AMA Disputes Do Not Meet the Settlement Class Definition
AMA’s denied transactions made with a prime broker do not meet the Court-approved
Settlement Class Definitions which state valid claimants are those who:
indirectly purchased an FX Instrument from a Defendant or co-conspirator and were
thereby injured in California by entering into an FX Instrument with a member of the Direct
Settlement Class, where the Direct Settlement Class member entered into the FX
Instrument directly with a Defendant or co-conspirator. Excluded from the California Class
are Defendants and their co-conspirators….
(ECF 460, ¶10). A “Direct Settlement Class” member is as a member of the FOREX class of direct
purchasers. (Id. ¶13). A valid claimant must enter into an FX transaction directly with a member
of the FOREX Class who, in turn, entered into an FX Instrument with a Defendant.
As the Complaint alleges:
When retail FX customers … purchase an FX Instrument from a Direct Settlement Class
member, such as an RFED, where the RFED is their counterparty for purposes of the
transaction, no other person or entity stands between the retail FX customer, such as
Plaintiffs, and the RFED. For each retail FX Instrument purchase, for which Plaintiffs
alleges damages, there is a principal-to-principal transaction between the retail FX
customer (Plaintiff) and the RFED, and a matching principal-to-principal transaction
between the RFED and the liquidity provider-Defendant.
(ECF 183, ¶159) (emphasis added). When AMA instructed a prime broker to facilitate an FX
Transaction, the prime broker (not AMA) entered into it on AMA’s behalf. Sophisticated entities
such as AMA use a prime broker’s name and credit to instruct and conduct FX transactions.1 Thus,
AMA agrees with its prime broker that the “prime broker, rather than [AMA], will become the
party to these transactions” when the prime broker accepts the transaction and likewise the prime
broker has a written agreement with the dealer in which they agree that the prime broker will be
“the counterparty to each transaction executed by the client [AMA]” and the dealer. Id. at 39.2
AMA did not provide prime broker agreements but its agreement with requires that
AMA is not a party to the FX Transaction. (Ex. Q, at Section 1.2) (
”). AMA’s instructions to its prime broker
resulted in a two-step process: 1) FX transaction entered between the prime broker (which, in some
instances, was a Defendant or co-conspirator) and an unidentified counterparty (that may or may
not be member of the FOREX class); and 2) the financial reconciliation of the FX transaction
between the prime broker and AMA. See Ex. R (FTC Staff Letter No. 13-11, April 30, 2013).3
AMA may be the ultimate economic beneficiary of the FX transaction that it instructed its
prime broker to enter into, but AMA itself did not enter into nor is it a party to an FX Transaction
and undertakes no credit risk to that transaction. (Ex. P at 39). AMA is neither buyer nor seller in
these transactions. Thus, all FX transactions AMA conducted through a prime broker do not satisfy
the Settlement Class Definitions and cannot be compensated from the Settlement Funds.
Regardless, because documents AMA supplied suggest its prime brokers include Defendants,
despite who “entered into” those transactions they cannot meet the Settlement Class Definition.
And, absent the required documentation, it is impossible to verify that an entity in the prime broker
transactions was a Settlement Class Member in FOREX, as required.
AMA’s Failed to Identify Duplicate Transactions Submitted in FOREX
Denial of AMA’s denied transactions should be upheld because they may
be duplicative of direct transactions for which payment has been approved in FOREX and they are
not supported with the required records and do not meet the Settlement Class Definition.
1 Ex. P (Foreign Exchange Prime Brokerage: Product Overview and Best Practice Recommendations, published
December 19, 2005 at 36-37 (available at
https://www.newyorkfed.org/medialibrary/microsites/fxc/files/annualreports/ar2005/fxar05PB.pdf).
2 See also Foreign Exchange Prime Brokerage Reverse Give-Up Relationships: Overview of Key Issues and
Analysis of Legal Framework published November 20, 2009, at 11 (available at
https://www.newyorkfed.org/medialibrary/microsites/fxc/files/annualreports/ar2009/11-20_fx09.pdf) (“…the prime
broker—rather than the client—becomes the party to the transaction.”).
3 http://www.cftc.gov/ucm/groups/public/@lrlettergeneral/documents/letter/13-11.pdf. at 4 (recognizing use of
prime broker to conduct FX transaction results in two transactions, one between the client and prime broker and a
second between the prime broker and the dealer).
Respectfully submitted,
/s/ Michael Dell’ Angelo
Michael Dell’ Angelo
BERGER MONTAGUE PC
1818 Market St, Suite 3600
Philadelphia, PA 19103
Tel: (215) 875-3000
mdellangelo@bm.net

AMA's application to seal the documents at Dkt. No 490 is GRANTED for substantially the reasons
stated in AMA's letter at Dkt. No. 500.
The Clerk of Court is respectfully directed to (1) maintain all of the documents at Dkt. Nos. 490 and
507 under seal with access limited to the parties listed in the appendix at Dkt. No 496 and (2) close
the motion at Dkt. No. 489.
Dated: October 25, 2021
New York, New York

LORNA G. SCHOFIEL
UNITED STATES DISTRICT JUDGE

Exhibits A-R

Filed under Seal

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10336136. Public record. Not legal advice.