Cate Stetson, Katie Wellington named AmLaw ‘Litigators of the Week’ in key victory for market fairness

Cate Stetson, Katie Wellington named AmLaw 'Litigators of the Week' in key victory for market fairness

Awards & rankings | 16 August 2022

Washington, D.C. partner Cate Stetson and Boston-based senior associate Katie Wellington were named Litigators of the Week by The AmLaw Litigation Daily for securing an appellate victory on behalf of Investors Exchange LLC (IEX) that is also an important win for market fairness.

On 29 July, the D.C. Circuit unanimously upheld IEX’s “D-Limit” order type, which is designed to thwart latency arbitrage engaged in by certain high-frequency trading firms. Stetson, who co-heads the firm’s nationally recognized Appellate Practice, argued the case on behalf of IEX – made famous by Michael Lewis’s book Flash Boys – with Katie Wellington supporting on the brief.

In Citadel Securities LLC v. Securities and Exchange Commission, high-frequency trading firm Citadel Securities asked the D.C. Circuit to vacate an SEC order permitting IEX’s discretionary limit, or "D-Limit," orders. IEX, which began operating in 2016, has sought from the beginning to combat latency arbitrage, and its D-Limit order is an important component of that effort. IEX intervened to support the SEC and to defend the IEX D-Limit order.

In a lengthy argument before the D.C. Circuit in October 2021, Stetson explained that the SEC’s order would help the market. IEX’s D-Limit order was designed to keep the market healthy and functioning despite the presence of highly resourced high-speed traders who siphon profits off the market at other investors’ expense. “The people [the D-Limit] doesn't help are the people who are trying to essentially skim that predatory tax off of a changing price” of stock – latency arbitrageurs, she explained.

Stetson’s D.C. Circuit argument was viewed on YouTube over 100,000 times, and Twitter and Reddit exploded with commentary during and after the argument. Wellington told the AmLaw Litigation Daily: “I opened up Twitter, and there were memes about Cate Stetson. It was pretty incredible. It showed how important this case is for ordinary investors—and the amazing job Cate did at argument.”

Stetson added: “To me, this case was Hogan Lovells’ appellate practice at its best: A close team working shoulder to shoulder on an appeal of immense significance to an important client.”

Read more in The AmLaw Litigation Daily.

The D.C. Circuit ruling can be found here.

The intervenor’s brief can be found here.