Genius Group investors face Aug 28 deadline in spoofing lawsuit

Investors in Genius Group face an Aug. 28 deadline to seek lead-plaintiff status in a securities class action accusing Citadel Securities and Virtu Americas of spoofing the education company's stock over a three-year period.

"Investors who purchased or sold Genius securities during the class period may be entitled to compensation without payment of any out-of-pocket fees through a contingency fee arrangement," Phillip Kim, an attorney at Rosen Law Firm, said.

The class period runs from April 12, 2022 to May 30, 2025. The lawsuit alleges defendants engaged in spoofing — submitting and cancelling buy or sell orders without genuine intent to execute them — to mislead other market participants about the true level of supply and demand for Genius securities, or about the stock's price volatility. The alleged manipulation also increased transaction costs by inflating the bid-ask spread. Defendants entered thousands of these baiting orders on U.S. stock exchanges, according to the complaint.

Investors who wish to serve as lead plaintiff must move the court no later than Aug. 28, 2026. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. Investors who do not seek lead-plaintiff status can remain absent class members and still share in any potential recovery.

The lawsuit, filed under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5, targets two of the largest U.S. market makers. Citadel Securities and Virtu Americas are among the biggest liquidity providers on U.S. exchanges, executing a substantial share of retail order flow. The complaint alleges the firms profited by absorbing and reselling customers' order flow at prices favorable to themselves while creating a false impression of genuine supply-and-demand dynamics.

Spoofing Scrutiny Extends to Equities Market Makers

Spoofing has been a focus of U.S. enforcement since the Dodd-Frank Act of 2010 made the practice explicitly illegal. The Commodity Futures Trading Commission has collected hundreds of millions of dollars in penalties from firms and traders accused of spoofing in futures markets, including a record $920 million settlement with JPMorgan Chase in 2020 over manipulative trading practices. The Genius Group case extends that scrutiny to equities market makers, a shift that could reshape how regulators police order flow in the cash equity market.

Multiple law firms are competing to represent investors. Rosen Law Firm, which says it has recovered billions of dollars for investors and was ranked No. 1 by ISS Securities Class Action Services for the number of securities class action settlements in 2017, is among those soliciting clients. Pomerantz LLP and Schall, Brown & Schwartz LLP have also announced involvement. The firms note that many notices issued in such cases come from middlemen that refer clients to other law firms rather than litigating the cases themselves.

The case carries implications beyond Genius Group. If the spoofing allegations are proven, they could pressure the market-making model that underpins U.S. equity trading, where firms like Citadel and Virtu pay brokers for retail order flow and profit from the spread. Regulators have scrutinized this payment-for-order-flow structure for years, and a finding of manipulation could accelerate calls for reform. For Genius Group, a Singapore-based education technology company listed on the NYSE American exchange, the litigation adds legal overhang to a stock that has already drawn attention from short sellers and retail traders.

The deadline for lead-plaintiff applications is Aug. 28, 2026. Until a class is certified, investors are not represented by counsel unless they retain a firm. The court will select a lead plaintiff to direct the litigation on behalf of the class.

This article is for informational purposes only and does not constitute investment advice.