This case was last updated from PACER on 09/08/2021 at 18:45:40 (UTC).

Cook et al v. Coinsquare Ltd.

Case Summary

On April 9, 2021, Victor J. Cook, individually and as the Current Members’ Representative of AltPay Holdings, LLC (as defined herein) (“Plaintiffs”), represented by Gavin Cunningham Gaukroger of Berger Singerman LLP, filed a civil action complaint against Coinsquare Ltd. (“Coinsquare''), seeking actual and consequential damages along with prejudgment and post-judgment interest, for allegedly making fraudulent misrepresentations to the Plaintiffs. This case was filed in the U.S. District Court for the Southern District of Florida with Judges William Matthewman and Donald M. Middlebrooks presiding. 

 

In their complaint, the Plaintiffs alleged that “On July 2, 2019, Coinsquare entered into a complex transaction with AltPay and Plaintiffs whereby, among other things, AltPay issued 136,183 new Class A Units in AltPay to Coinsquare, and converted Plaintiffs’ membership interests in AltPay to non-voting Class B Units,” and “As part of its due diligence in connection with this transaction, AltPay and Plaintiffs requested certain information from Coinsquare. Coinsquare provided certain information that, as explained below, failed to disclose that it was engaging in illegal manipulation of trading volume on the Coinsquare platform. Coinsquare also otherwise disclosed trading volume data that it knew was false or did not accurately represent the true trading volume on the Coinsquare platform.” 

 

Plaintiffs further alleged that “At no time during the discussions that led up to the transaction did Coinsquare or any of its representatives disclose that Coinsquare was engaged in illegal and other wrongful conduct that either was or would soon become the subject of an investigation by the Ontario Securities Commission. In fact, Coinsquare made numerous representations and warranties to the contrary.” Furthermore, “The OSC Settlement includes the following admissions of wrongful conduct: (a) Coinsquare admits that it engaged in market manipulation through the reporting of inflated trading volumes; (b) Coinsquare admits that it misled its clients about trading volumes and Diamond and Rostand admit to authorizing, permitting or acquiescing in this conduct; and (c) Coinsquare admits to taking a reprisal against an internal whistleblower and Diamond admits to authorizing, permitting or acquiescing in this conduct. The OSC Settlement states that “[b]etween July 2018 and December 2019, Coinsquare inflated its trading volumes by reporting fake or ‘wash’ trades representing over 90% of its reported trading volume.” 

 

Plaintiffs also alleged that “The false representations or omissions described above were materially false and misleading, and relied on by Plaintiffs in deciding to obtain the Exchange Rights to common shares of Coinsquare. The facts that Coinsquare should have disclosed, but failed to disclose, to Plaintiffs prior to entering into the Transaction Documents were not publicly available or otherwise reasonably ascertainable by Plaintiffs,” and that “Coinsquare made these false representations or omissions during the same time Coinsquare was knowingly engaged in illegal market manipulation and wash trading. Coinsquare had the motive and opportunity to commit fraud, as confirmed by the OSC Settlement. Coinsquare was of course aware of its wrongful conduct detailed and admitted in the OSC Settlement, and in failing to disclose this information, acted with the intent to deceive, manipulate, or defraud, or alternatively with severe recklessness.”

 

In the only claim for relief laid down by the Plaintiffs, it has been claimed that the defendant has allegedly violated § 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder.

 

In their prayer for relief, Plaintiffs have requested the court to award the Plaintiffs actual and consequential damages in an amount to be proven at trial; award prejudgment and post-judgment interest, attorney’s fees, and costs of suit as permitted by law; and award all further relief the Court deems just.

 

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Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    9:21-CV-80692

  • Filing Date:

    04/09/2021

  • Case Status:

    Disposed - Other Disposed

  • Case Type:

    Finance - Security/Commodity/Exchange

Judge Details

Presiding Judge

Donald M. Middlebrooks

Referral Judge

William Matthewman

 

Party Details

Plaintiffs

Victor J. Cook

Fort Lauderdale, FL 33301

AltPay Holdings, LLC

501 East Las Olas Blvd., Suite 300

Fort Lauderdale, FL 33301

Defendant

Coinsquare Ltd.

Attorney/Law Firm Details

Plaintiff Attorneys

Gavin Cunningham Gaukroger

Attorney at Berger Singerman LLP

350 East Las Olas Blvd., Suite 1000

Fort Lauderdale, FL 33301

Charles Howard Lichtman

Attorney at Berger Singerman

350 E Las Olas Boulevard, Suite 1000

Fort Lauderdale, FL 33301

Jason M. Rosenthal

Attorney at Much Shelist PC

191 N. Wacker Drive, Suite 1800

Chicago, IL 60606

Steven P. Blonder

Attorney at Much Shelist PC

191 N. Wacker Drive, Suite 1800

Chicago, IL 60606

 

Court Documents

#3

#4

#5

#8

#9

#11

#12

 

Docket Entries

  • 08/11/2021
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  • Docket(#12) ORDER CLOSING CASE. This case is DISMISSED WITH PREJUDICE. The Clerk of Court shall CLOSE THIS CASE. All pending motions are DENIED AS MOOT. Signed by Judge Donald M. Middlebrooks on 8/11/2021. See attached document for full details. (ebz) (Entered: 08/11/2021)

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  • 08/10/2021
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  • Docket(#11) NOTICE of Voluntary Dismissal with Prejudice by AltPay Holdings, LLC, Victor J. Cook (Gaukroger, Gavin) (Entered: 08/10/2021)

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  • 05/21/2021
  • Docket(#10) Case Reassignment of Paired Magistrate Judge to Magistrate Judge William Matthewman. Magistrate Judge Dave Lee Brannon no longer assigned to case. (yar) (Entered: 05/21/2021)

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  • 05/11/2021
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  • Docket(#9) PRETRIAL SCHEDULING ORDER: ( Amended Pleadings due by 7/12/2021., ALL Discovery due by 11/1/2021., Joinder of Parties due by 7/12/2021., In Limine Motions due by 11/15/2021., Dispositive Motions due by 11/15/2021., Pretrial Motions due by 11/15/2021., Joint Pretrial Stipulation due by 12/20/2021., Jury Trial set for 1/18/2022 09:00 AM in West Palm Beach Division before Judge Donald M. Middlebrooks., Calendar Call set for 1/12/2022 01:15 PM in West Palm Beach Division before Judge Donald M. Middlebrooks.), ORDER REFERRING CASE to Mediation. Signed by Magistrate Judge Dave Lee Brannon on 5/11/2021. See attached document for full details. (lk) #Pattern Jury Instruction Builder - To access the latest, up to date changes to the 11th Circuit Pattern Jury Instructions go to https://pji.ca11.uscourts.gov or click here. (Entered: 05/11/2021)

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  • 05/05/2021
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  • Docket(#8) ORDER REFERRING CASE AND SETTING TRIAL DATE (Jury Trial set for 1/18/2022 09:00 AM in West Palm Beach Division before Judge Donald M. Middlebrooks., Calendar Call set for 1/12/2022 01:15 PM before Judge Donald M. Middlebrooks), ORDER REFERRING CASE to Magistrate Judge Dave Lee Brannon to enter a Scheduling Order. Signed by Judge Donald M. Middlebrooks on 5/5/2021. See attached document for full details. (ebz) #Pattern Jury Instruction Builder - To access the latest, up to date changes to the 11th Circuit Pattern Jury Instructions go to https://pji.ca11.uscourts.gov or click here. (Entered: 05/05/2021)

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  • 04/14/2021
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  • Docket(#7) PAPERLESS ORDER granting #6 Motion to Appear Pro Hac Vice, Consent to Designation, and Request to Electronically Receive Notices of Electronic Filing for Attorney Jason M. Rosenthal. Signed by Judge Donald M. Middlebrooks on 4/14/2021. (apo) (Entered: 04/14/2021)

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  • 04/14/2021
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  • Docket(#6) MOTION to Appear Pro Hac Vice, Consent to Designation, and Request to Electronically Receive Notices of Electronic Filing for Jason M. Rosenthal. Filing Fee $ 200.00 Receipt # AFLSDC-14604864 by AltPay Holdings, LLC, Victor J. Cook. Responses due by 4/28/2021 (Attachments: #1 Text of Proposed Order Proposed Order)(Gaukroger, Gavin) (Entered: 04/14/2021)

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  • 04/12/2021
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  • Docket(#5) CORRECTED - Bar Letter (corrected Firm listing) re: Admissions sent to attorney Steven P. Blonder, mailing date Jason M. Rosenthal, (pt) (Entered: 04/12/2021)

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  • 04/12/2021
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  • Docket(#4) Bar Letter re: Admissions sent to attorney Steven P. Blonder and Jason M. Rosenthal, mailing date April 12, 2021, (pt) (Entered: 04/12/2021)

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  • 04/12/2021
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  • Docket(#3) Summons Issued as to Coinsquare Ltd.. (ebz) (Entered: 04/12/2021)

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  • 04/09/2021
  • Docket(#2) Clerks Notice of Judge Assignment to Judge Donald M. Middlebrooks and Magistrate Judge Dave Lee Brannon. Pursuant to 28 USC 636(c), the parties are hereby notified that the U.S. Magistrate Judge Dave Lee Brannon is available to handle any or all proceedings in this case. If agreed, parties should complete and file the Consent form found on our website. It is not necessary to file a document indicating lack of consent. Pro se (NON-PRISONER) litigants may receive Notices of Electronic Filings (NEFS) via email after filing a Consent by Pro Se Litigant (NON-PRISONER) to Receive Notices of Electronic Filing. The consent form is available under the forms section of our website. (ebz) (Entered: 04/12/2021)

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  • 04/09/2021
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  • Docket(#1) COMPLAINT against Coinsquare Ltd.. Filing fees $ 402.00 receipt number AFLSDC-14595323, filed by Victor J. Cook, AltPay Holdings, LLC. (Attachments: #1 Exhibit "A" Settlement Agreement, #2 Civil Cover Sheet, #3 Summon(s))(Gaukroger, Gavin) (Entered: 04/09/2021)

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