Case 1:14-cv409438WHP Document 29 Filed 07/08/15 Page...

Case 1:14-cv409438WHP Document 29 Filed 07/08/15 of 50

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

BENJAMIN GROSS, Individually and on Behalf of All Others Similarly Situated,

Plaintiff,

vs.

GFI GROUP, INC., COLIN HEFFRON, and MICHAEL 000CH,

Defendants.

Case No. 1: 14-cv-0943 8-WHP

JURY TRIAL DEMANDED

SECOND AMENDED CLASS ACTION COMPLAINT FOR VIOLATION OF THE FEDERAL SECURITIES LAWS


Lead Plaintiff Benjamin Gross ("Lead Plaintiff'), makes the allegations contained herein

on personal knowledge as to his own actions, and on information and belief as to all other

matters. Lead Plaintiff's information and belief is based on Lead Counsel's investigation, which

included, inter alia, review and analysis of filings by OFT Group, Inc. ("OFT" or the "Company")

and other companies with the United States Securities and Exchange Commission ("SEC"), press

releases, conference calls, news articles, and analyst reports, as well as filings in In re GEl

Group Inc. Stockholder Litigation, C.A. No. 10136-VCL (Del. Chancery Ct.) (the "Delaware

Action"), in which considerable expedited discovery has taken place. A substantial number of

the documents filed with the Court in the Delaware Action were heavily redacted or filed under

seal. Lead Plaintiff successfully challenged the confidential treatment of these highly relevant

documents and they are now available to the public. Based on the foregoing, Lead Plaintiff

believes that substantial, additional evidentiary support will exist for the allegations set forth

herein after a reasonable opportunity for discovery.

1. This is a class action for violations of the anti-fraud provisions of the federal

securities laws on behalf of all sellers of the publicly traded common stock of OFT between July

30, 2014 and September 8, 2014, inclusive (the "Class Period"), who were damaged thereby (the

"Class").

2. This lawsuit arises out of misrepresentations and omissions made by Defendants

Michael "Mickey" Gooch ("Gooch"), OFT's founder and Executive Chairman of OFT's Board of

Directors, and Cohn Heffron ("Heffron"), OFT's Chief Executive Officer and a director

(collectively, the "Individual Defendants"), on behalf of the Company, in their failed attempt to

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take OFT's primary line of business private for a steeply discounted price, at the expense of

shareholders.

3. OFT has two principal business segments: (i) the "inter-dealer-broker" business,

which includes OFT's brokering and clearing operations (the "Brokerage Business" or "TDB

Business"); and (ii) OFT's proprietary software products, Trayport and FENTCS (the "Software

Business").

4. On July 30, 2014, OFT announced that it had entered into a stock-for-stock merger

agreement with CME Group, Tnc. ("CME") (the "CME Deal"). Pursuant to this agreement,

CME would acquire all outstanding shares of OFT, but would immediately turn around and sell

the Brokerage Business to a group headed by Defendants Gooch and Heifron (the "Management

Consortium"). The deal would be worth $4.55 per share to Company stockholders.

5. Commenting on the CME Deal, Defendant Gooch assured the Company's

investors that "[ojptimizing GFI's value for stockholders has been a goal of management since

becoming a public company in 2005 and this transaction represents a singular and unique

opportunity to return value." [Emphasis added].

6. This statement was blatantly false and misleading. As the true facts and

circumstances surrounding the CME Deal and the process leading up to it have come to light, it

is clear that the CME Deal did not seek to optimize stockholder value, and the transaction was

anything but a singular and unique opportunity to return value to shareholders. Rather,

Defendants knowingly or recklessly failed to disclose material, non-public information to

shareholders, including that: (i) a prerequisite of any sale of the Company or its Brokerage

Business was not that it maximize shareholder value, but that it place control of the Brokerage

Business in the hands of the Management Consortium; (ii) at Defendants' direction, the

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Company's bankers had not approached any of the Company's competitors in the brokerage

business concerning a proposed transaction even though the Company's bankers recognized that

its competitors were best-positioned to offer the highest price for OFT and even identified those

competitors; (iii) over the past three years, the Company had received expressions of interest

from BOC Partners, Inc. ("BOC"), a major competitor in the brokerage business, about acquiring

OFT, and that Defendants had chosen not to engage in any discussions with BOC prior to

entering into the CME Deal; (iv) on July 29, 2014 - the day before OFT announced the CME

Deal - BOC sent Defendants Gooch and Heffron a letter expressing BOC's interest in acquiring

all or substantially all of OFT's assets or an acquisition of 100% of OFT's outstanding shares,

stating that BOC was a logical partner for OFT because of the synergies that could be achieved in

the brokerage businesses, and that, as a result, BOC was confident that "it could offer a price per

share substantially in excess of OFT's current trading price" and it would like to "discuss a

possible acquisition of OFT with both management and the OFT board"; (v) Gooch harbored a

personal animosity towards BOC and its management and would not do business with them; (vi)

Gooch, as a representative of Jersey Partners, Inc. ("JPT") - which controlled approximately 38%

of OFT - had told OFT's Board prior to its acceptance of the CME Deal that "JPT intended to vote

against any transaction involving OFT with any party other than CME"; and (vii) the price CME

was paying for the Software Business was artificially low based on the structure of the deal

mandated by Gooch.

7. Despite Defendants' best efforts to keep any of OFT's competitors from

participating in the process and spoiling their efforts to take the Brokerage Business private, on

September 9, 2014, Howard Lutnick ("Lutnick"), BOC's Chairman, went public with his

intentions to acquire OFT. On that day, before the market opened, BOC announced that it would

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make a $675 million all-cash tender offer for OFT ("BOC's September 9 Offer"). BOC's

September 9 Offer, of $5.25 per share, was 15% higher than the $4.55 per share, all-stock CME

Deal. In the press release announcing its offer, BOC noted that OFT's deal with CME and the

Mangement Consortium "deprives OFT shareholders of the appropriate value of their

investment." BOC's press release also disclosed, for the first time, that BOC "has over the

course of several years repeatedly expressed an interest in acquiring GFI, and on July 29,

2014 delivered a letter to Messrs. Michael Gooch and Cohn Heffron detailing its interest in

acquiring 100% of GFI. We had expected to engage in a discussion, and therefore we were

surprised to read the press release announcing your agreement with CME Group Inc"

[Emphasis added].

8. On this news, OFT's stock price jumped 20%, from $5.03 on September 8, 2014 to

$6.02 on September 12, 2014, reflecting the market's recognition that the Company was now in

play, that the CME Deal was the result of a manipulated sales process, that the CME Deal was

not, in fact, "a singular and unique opportunity to return value" to shareholders, and that the

Defendants' had not tried to "[o]ptimiz[e] OFT's value for stockholders." Lead Plaintiff and the

Class, did not, however, get the benefit of this price increase since they sold their stock

throughout the Class Period at prices that had been artificially depressed as a direct and

proximate result of the Defendants' knowingly or recklessly false and misleading statements.

9. Following BOC's all-cash offer for OFT, a bidding war erupted between CME and

the Management Consortium on the one hand, and BOC on the other. In all, between September

9, 2014 and January 20, 2015, eight additional bids were made between the two parties with

CME and the Management Consortium consistently playing catch-up with BOC in order to

salvage their self-serving transaction.

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10. On January 22, 2015, following a January 20, 2015 bid by CME and the

Management Consortium of $5.85 per share (that matched an earlier BGC bid), which was

topped on that same day by a $6.10 bid by BGC, Glass Lewis & Co. ("Glass Lewis"), a leading

independent proxy advisory service, recommended that GFI stockholders vote against the CME

Deal. In its analysis, Glass Lewis noted the following regarding the proposed CME transaction:

"[in hindsight, it seems readily apparent the GEl board's flawed and conflicted process failed to

extract any significant semblance of maximum value or a favorable price, and further failed to

fully incorporate those bidders willing to offer decidedly greater value to GFI investors ....

[Emphasis added].

11. Additionally, Glass Lewis observed: "[w]e believe the sum of these factors

overwhelmingly suggest investors should have little - if, truly, any - confidence the present

arrangement represents, within reasonable doubt, the most attractive value available to GFI and

its shareholders ....(Glass Lewis Quotes from SEC Form 14-A filing related to BGC January

22, 2015 Press Release). Numerous contemporaneous news reports recognized that the process

GFI went about in selling itself was "dysfunctional" and "a mess." These articles further noted

that the "two-member special committee of independent directors at GFI that was responsible for

considering a takeover of [the] company. . . had previously recommended that GFI select BGC's

higher bid. Their recommendation, however, was overridden by the two management directors,

which included [Defendant] Gooch.... 1

http://dealbook.nytimes.com/20 15/02/05/board-strife-compounds-failed-deal-for-

gfi/?r=0; and http://blogs.wsj.com/moneybeat/2015/0 1/27/dealpolitik-divided-board-at-gfi-

group/. (All websites referenced herein were last visited on July 8, 2015).

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12. With BGC plainly offering a more favorable and lucrative deal than CME's, and

the Management Consortium's manipulation of the process leading to the CME Deal having

been disclosed, on January 30, 2015, the Wall Street Journal reported that "Shareholders voted

down OFT Group Inc. 's planned sale to CME Group Tnc."

13. That same day, in a rather remarkable turn of events, Defendant Gooch effectively

admitted that the prior statements concerning the CME Deal were false and misleading.

Specifically, Gooch was quoted in a OFT Press Release as stating that while the Board and

management were disappointed that shareholders had rejected a deal with CME and the

Management Consortium, the Board and management would "now work tirelessly to find a

strategic alternative that offers the Company's shareholders the chance to maximize the value of

their investment." [Emphasis added]. Incredibly, OFT's Special Committee subsequently

disavowed authorizing OFT's management to issue this press release or to make this statement.

See, infra, ¶88, and the Affidavit of Mark Lebovitch in Support of Plaintiffs' Second Motion for

Expedited Proceedings in the Delaware Action, ¶7 ("Lebovitch Affidavit") (attached hereto as

Exhibit 1).

14. Leaving aside the issue of authorization, Defendant Gooch's statement plainly

demonstrates the truth of Plaintiff's allegations, specifically that Defendants knew or were

reckless in not knowing that the $4.55 per share, all-stock CME Deal did not "represent a

singular and unique opportunity to return value" to shareholders. This is because, as discussed in

greater detail below, in 2013, investment bankers from Jefferies advised Defendant Gooch in his

capacity as Executive Chairman of OFT that the Company could achieve maximum value by

selling all of OFT to an TDB competitor (like BOC), because such a sale would unlock as much as

$98 million in synergies that could be used as negotiating leverage for the benefit of OFT's public

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stockholders. Yet, at Defendants' direction, the Company's bankers did not approach any of

OFT's competitors in the brokerage business concerning a proposed transaction, and it was only

after BOC publicly trounced the CME Deal with a far richer premium that Defendant Gooch and

other members of the Board acknowledged that it was now time to attempt to maximize

shareholder value by talking to those bidders willing and able to pay OFT's real value. Of

course, by this time, Defendants had been totally discredited and BOC had succeeded in its

hostile takeover at $6.10 per share.

15. Having failed in their attempts to acquire the Brokerage Business at a substantial

discount, the members of the Management Consortium caved and turned their efforts to

salvaging what they could for themselves.

16. In that regard, on February 19, 2015, BOC and OFT announced that they had

"entered into a tender offer support agreement in which OFT's board of directors unanimously

agreed to support BOC's tender offer for all of the outstanding shares of OFT common stock at

$6.10 per share in cash." As part of that agreement, Defendants Gooch and Heffron "will

continue to have management responsibilities at OFT and will enter into employment agreements

and receive retention and non-competition bonuses based on certain non-OAAP financial results

for OFT."

17. On February 26, 2015, BOC completed its tender offer for OFT for $6.10 a share.

While Lead Plaintiff and the Class were clearly damaged by the aforementioned conduct, the

same cannot be said about Defendants. Even though their scheme to take the Brokerage

Business private failed, Defendants Gooch and Heffron will still receive at least $6.10 for each

share of OFT stock they own, as well as millions of dollars in additional compensation.

Specifically, BOC has entered into three-and-a-half year employment contracts with Gooch and

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Heffron, under which they will receive annual compensation of around $1 million and $2.5

million, respectively. BOC will also set up a bonus pool for employees equal to the average

annual "distributable earnings" of OFT's interdealer brokerage business for the three years

starting July 1, 2015, and Defendants Gooch and Heffron will each be entitled to 35% of this

bonus pool with other employees sharing the remaining 30%.

JURISDICTION AND VENUE

18. The claims asserted herein arise under and pursuant to §10(b) and 20(a) of the

Securities Exchange Act of 1934 (the "Exchange Act") (15 U.S.C. §78j(b) and 78t(a)) and Rule

lob-S promulgated thereunder by the SEC (17 C.F.R. §240. lOb-5).

19. This Court has jurisdiction over the subject matter of this action pursuant to 28

U.S.C. §1331 and §27 of the Exchange Act.

20. Venue is proper in this District pursuant to §27 of the Exchange Act and 28

U.S.C. §1391(b), as the Company is headquartered and conducts substantial business in this

District.

21. In connection with the acts alleged in this Amended Complaint, Defendants,

directly or indirectly, used the means and instrumentalities of interstate commerce, including, but

not limited to, the mails, interstate telephone communications, and the facilities of the New York

Stock Exchange ("NYSE"), a national securities exchange located in this District.

PARTIES

22. Lead Plaintiff Benjamin Gross sold the common stock of OFT at an artificially

deflated price during the Class Period and has been damaged as a result. Specifically, Plaintiff

sold 770 shares on July 31, 2014 at $4.52 each.

Case 1:14cv-09438-WHP Document 29 Filed 07/08/15 of 50

23. Defendant OFT, together with its subsidiaries, is incorporated in Delaware and

headquartered at 55 Water Street, New York, New York 10041.

24. Defendant Heifron has served as a director of OFT since 2001, as the Company's

president since 2004, and as its CEO since 2013. Heifron is also the chairman of Trayport

Limited. He is also a member of the Management Consortium that attempted to acquire OFT's

brokerage business through the proposed CME Deal. During the Class Period, Heifron made or

caused the Company to issue false and misleading statements.

25. Defendant Gooch founded OFT in 1987, and served as the Company's CEO from

1987 to 2013. He also serves on the OFT Board of Directors as its Executive Chairman, and is

the beneficial owner of 37.3% of OFT's outstanding stock. Furthermore, Gooch is a member of

the Management Consortium that attempted to acquire OFT's brokerage business through the

proposed CME Deal. During the Class Period, Gooch made or caused the Company to issue

false and misleading statements.

26. Defendants Heifron and Gooch are collectively referred to herein as the

"Individual Defendants."

27. During the Class Period, the Individual Defendants possessed the power and

authority to control the contents of OFT's annual reports, quarterly reports, press releases, and

presentations to securities analysts, money and portfolio managers, and institutional investors,

i.e., the market. They were provided with copies of the Company's reports and press releases

alleged herein to be false or misleading prior to or shortly after their issuance and had the ability

and opportunity to prevent their issuance or cause them to be corrected. Because of their

positions with the Company, and their access to material, non-public information available to

them but not to the public, the Individual Defendants knew or recklessly disregarded that the

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facts specified herein had not been disclosed to and were being concealed from the public and

that the representations being made were then materially false and misleading. The Individual

Defendants are liable for the false and misleading statements pleaded herein, especially

considering the control they exerted over the sales process.

FRAUDULENT SCHEME AND COURSE OF BUSINESS

28. The Individual Defendants are liable as participants in a fraudulent scheme and

course of conduct that operated as a fraud or deceit on sellers of OFI common stock by making

and/or disseminating materially false and misleading statements and/or concealing material facts.

During the Class Period, Defendants: (i) deceived the investing public regarding OFI's business,

operations, management, and the intrinsic value of OFI common stock; (ii) misrepresented

and/or omitted, among other things, facts crucial to the truth of the statements concerning the

CME Deal and the process leading to it; and (iii) caused Lead Plaintiff and members of the Class

to sell their shares of OFI common stock at artificially deflated prices.

29. During the Class Period, the Individual Defendants had the motive and

opportunity to commit the alleged fraud. The Individual Defendants also had actual knowledge

of the misleading statements they made and/or acted in reckless disregard of the true information

known to them at the time. In doing so, the Individual Defendants participated in a scheme to

defraud and committed acts, practices, and participated in a course of business that operated as a

fraud or deceit on sellers of OFI common stock during the Class Period.

CLASS ACTION ALLEGATIONS

30. Lead Plaintiff brings this action as a class action pursuant to Federal Rule of Civil

Procedure 23(a) and (b)(3) on behalf of a class consisting of all those who sold the common

stock of OFI between July 30, 2014 and September 8, 2014, inclusive, and who were damaged

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thereby. Excluded from the Class are Defendants, the officers and directors of the Company, at

all relevant times, members of their immediate families and their legal representatives, heirs,

successors or assigns, and any entity in which Defendants have or had a controlling interest.

31. The members of the Class are so numerous that joinder of all members is

impracticable. Throughout the Class Period, OFT common stock was actively traded on the

NYSE. While the exact number of Class members is unknown to Lead Plaintiff at this time and

can only be ascertained through appropriate discovery, Lead Plaintiff believes that there are

hundreds or thousands of members in the proposed Class. Record owners and sellers and other

members of the Class may be identified from records maintained by OFT or its transfer agent,

and may be notified of the pendency of this action by mail, using the form of notice similar to

that customarily used in securities class actions.

32. Lead Plaintiff's claims are typical of the claims of the members of the Class as all

members of the Class are similarly affected by Defendants' wrongful conduct in violation of

federal law complained of herein.

33. Lead Plaintiff will fairly and adequately protect the interests of the members of

the Class and has retained counsel competent and experienced in class action and securities

litigation.

34. Common questions of law and fact exist as to all members of the Class and

predominate over any questions solely affecting individual members of the Class. Among the

questions of law and fact common to the Class are:

(a) whether the federal securities laws were violated by Defendants' acts as alleged herein;

(b) whether statements made by Defendants to the investing public during the Class Period misrepresented and/or omitted material facts about the business, operations, and value of OFT and the CME Deal;

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(c) whether the price of OFT common stock was artificially depressed during the Class Period; and

(d) to what extent Lead Plaintiff and the members of the Class have sustained damages and the proper measure of damages.

35. A class action is superior to all other available methods for the fair and efficient

adjudication of this controversy since joinder of all members is impracticable. Furthermore, as

the damages suffered by individual Class members may be relatively small, the expense and

burden of individual litigation make it impossible for members of the Class to individually

redress the wrongs done to them. There will be no difficulty in the management of this action as

a class action.

SUBSTANTIVE ALLEGATIONS

Background - The Company

36. Defendant OFT is a leading intermediary and provider of trading technologies and

support services to global over-the-counter ("OTC") and listed markets. The Company was

founded in 1987 and was incorporated under the laws of the State of Delaware in 2001. OFT

serves as a holding company for its subsidiaries, and provides brokerage and trade execution

services, clearing services, market data and trading platforms, and other software products to

institutional customers in markets for a range of fixed income, financial, equity, and commodity

instruments.

37. OFT was publicly traded on the NYSE under the ticker symbol "OFTO." On

March 20, 2015, OFT filed a press release attached to a Form 8-K, in which it announced its

intention to voluntarily delist and deregister its common stock. This delisting was to occur ten

days after OFT filed the requisite Form 25 with the SEC. The Form 25 was filed on March 30,

2015. Accordingly, OFT's common stock ceased trading on the NYSE on or about April 9, 2015.

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38. OFT can be essentially separated into two businesses. The first is its wholesale

brokerage and clearing business. The second is its software, analytics, and market data business.

The latter business is comprised primarily of (i) the Company's Trayport Limited subsidiary,

which licenses multi-asset class electronic trading and order management software to brokers,

exchanges, and traders in the commodities, fixed income, currencies, and equities markets; and

(ii) its FENTCS division, for foreign exchange option markets, which provides customers with

technology to control and monitor the lifecycle of their foreign exchange options trades.

39. In recent years, OFT has developed other businesses that complement their

brokerage of OTC derivatives, such as cash bond and futures contracts, brokerage services,

clearing services, and analytical and trading software businesses.

40. As of February 13, 2014, the Brokerage Business accounted for substantially all

of OFT's revenues - nearly 90% of OFT's 2013 net revenues. The brokerage segment, alone,

accounted for $645.4 million, or 71.6%, of OFT's total revenues in 2013. The Brokerage

Business is cyclical, and over the last few years, has suffered a downturn. The Individual

Defendants and their advisors, however, anticipated that the downturn would soon end. See

Deposition of Alexander Yavorsky (a Jefferies LLC ("Jefferies") investment banker) (Dec. 10,

2014) ("Yavorsky Deposition"), at 67:9-68:16 (attached hereto as Exhibit 2):

P1 And in that macro context Jefferies is suggesting to OFT that it thinks the market conditions will eventually improve? A. Yeah. Q. And there's a check mark next to it? A. Signifying it's a good thing that conditions improve. Q. Does that mean it's a good thing in terms of doing a transaction, or it's just a good thing in general.? A. It's just a good thing. It's great when things improve. Q. The eventual improvement in market conditions, is that a reason why a potential buyer might want to acquire the TDB, in order to participate in that market improvement?

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A. Certainly any potential buyer of any potential target would prefer that the operating conditions for the target improve rather than stay the same or deteriorate. It's kind of a truism. Q. And if you were acquiring a target that was at the bottom of the cycle, there's an opportunity to participate in synergies on growth side when the market conditions improve? A. I don't know about synergies, because that's a completely different concept from just simply the oscillations in the operating environment, but if you buy low, and sell high -- Q. Right. A. - you know, that is better than vice versa.

See also Deposition of Cohn Heffron (Dec. 8, 2014) ("Heffron Deposition") (attached hereto as

Exhibit 3), at 26:18-27:5 ("Q. And did OFT, after it was negatively impacted by the Enron

situation, recover in terms that its revenues increase at some point after that? . . . A.

[Effectively we have several different businesses within the whole business. And after a year or

two years our commodities energy business began to recover.").

41. In fact, in a series of text messages between Jefferies banker Alexander Yavorsky

and Defendant Gooch, Gooch wrote:

I think it went well with B[ank of Montreal] . . . . They wanted to know my expectations for the future of the brokerage business. And they were like why now with this deal[.] I told them if we don't do it now—we won't be able to do it in the future becusse [sic] the brokerage business will improve so much we won't be able to afford it!!! And I said [obviously I'm bullish or why would I risk my entire investment in taking this position. I'm concentrating my risk on a leveraged basis into the brokerage business. We are fine. The transition is almost done and the pendulum is going to start swinging the other direction.

March 26, 2014 Text Message Exchange Between Defendant Gooch and Alexander Yavorsky

(attached hereto as Exhibit 4). [Emphasis added].

42. Accordingly, the CME Deal was essentially a leveraged buyout designed to allow

the Management Consortium to take the Brokerage Business private on the cheap.

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MATERIALLY FALSE AND MISLEADING STATEMENTS ISSUED DURING THE CLASS PERIOD

A. Summary of the CME Deal

43. On the first day of the Class Period, in a press release dated July 30, 2014 and

filed as an exhibit attached to a Form 8-K filing with the SEC, GFI announced the CME Deal,

pursuant to which GFI shareholders would receive $4.55 per share in CME Group Class A

Common Stock for each share of GFI stock they owned. The acquisition was valued at

approximately $580 million.

44. Pursuant to the acquisition agreement, CME would acquire GFI and then

immediately re-sell the Brokerage Business back to the Management Consortium for $165

million in cash and the assumption, at closing, of approximately $63 million of unvested deferred

compensation and other liabilities.

45. This CME Deal was approved by the Boards of Directors of GFI and CME and

was expected to close in early 2015.

46. The consideration to be paid by CME in the proposed acquisition represented

almost no premium at all to GFI shareholders when compared to GFI's approximately 52-week

closing price high of $4.53.

47. This is not surprising, given that the real impetus for the CME Deal - which was

not disclosed to Lead Plaintiff and the Class - was a desire by the members of the Management

Consortium to take the Brokerage Business private, at a price favorable to them.

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B. Statements Concerning the Acquisition by CME

48. On July 30, 2014, OFT issued a press release attached as an exhibit to a Form 8-K

filed with the SEC, which provided, in relevant part:

CME Group, the world's leading and most diverse derivatives marketplace, and OFT Group Tnc., a leading intermediary and provider of trading technologies and support services to the global OTC and listed markets, today announced that they have entered into definitive agreements to create value for their respective stockholders through a two-step transaction through which:

• CME Group will acquire Trayport and FENTCS. CME Group will purchase these businesses by first acquiring all of the outstanding shares of OFT Group in exchange for $4.55 per share in CME Group Class A Common Stock which represents a 46% premium above yesterday's closing price of $3.11 per share of OFT Group common stock.

• Immediately following the acquisition of OFT Group, a private consortium of OFT Group management, led by current Executive Chairman Michael Gooch, CEO Cohn Heifron and Managing Director Nick Brown, will acquire OFT Group's wholesale brokerage and clearing businesses for $165M in cash and the assumption, at closing, of approximately $63M of unvested deferred compensation and other liabilities. After completion of the transaction, the wholesale brokerage business, including the Kyte Group, will continue as a private company with its management and operations largely unchanged. The continuing OFT Group brokerage business will maintain its commitment to both Trayport and FENTCS by entering into long-term commercial agreements.

This two-step transaction, which has been approved by the Board of Directors of OFT Group upon the unanimous recommendation of a Special Committee comprised solely of independent and disinterested directors, and by the Board of Directors of CME Group, is expected to create significant stockholder value for both OFT Group and CME Group stockholders and to qualify as tax-free exchanges of equity for both groups. The transaction is subject to the approval of the stockholders of OFT Group as well as customary regulatory review and approvals. It is expected that the transaction will close in early 2015.

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49. Defendant Gooch stated in announcing the deal:

We are very pleased to announce this transaction with CME Group and the substantial premium and liquidity it delivers to our stockholders. Optimizing GFI's value for stockholders has been a goal of management since becoming a public company in 2005 and this transaction represents a singular and unique opportunity to return value I am very proud of what our Trayport and FENICS teams have achieved since becoming a part of OFT. We are excited that these businesses will become part of a dynamic and highly-regarded company where their immediate strategic value can be further realized within CME.

[Emphasis added].

50. Defendant Heffron, expressing support for the deal, added:

Over the past few years, the wholesale brokerage industry has faced challenging market conditions along with increased regulatory requirements. Even with those challenges, we continued to invest in technology to better serve our clients and further increase overall market efficiency. This transaction unlocks the substantial value of our Trayport and FENICS technology businesses in a tax efficient manner. Additionally, it will allow our wholesale brokerage and Kyte businesses to continue as a private company, giving them the added flexibility and agility needed to capture future market opportunities. The talents and commitment of our team have made the OFT wholesale brokerage and clearing businesses recognized leaders in their industry. I am proud and excited to continue to work together with them in this next phase of our development.

[Emphasis added].

51. The aforementioned statements were materially false and misleading in that they

failed to disclose material information and misrepresented the truth about the CME Deal.

Specifically, Defendants knowingly or recklessly failed to disclose that: (i) a prerequisite of any

sale of the Company or its Brokerage Business was not that it maximize shareholder value, but

rather, that it place control of the Brokerage Business in the hands of the Management

Consortium; (ii) at the Defendants' direction, the Company's bankers had not approached any of

the Company's competitors in the brokerage business concerning a proposed transaction prior to

entering into the CME Deal, even though the bankers believed that these competitors were best-

positioned to offer the highest price for OFT due to savings from potential synergies; (iii) over the

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past three years, the Company had received expressions of interest from BOC, a major

competitor in the brokerage business, about acquiring OFT, and that it had chosen not to engage

in any discussions with BOC prior to entering into the CME Deal; (iv) on July 29, 2014 - the

day before OFT announced the CME Deal - BOC sent Defendants Gooch and Heffron a letter

expressing BOC's interest in acquiring all or substantially all of OFT's assets or an acquisition of

100% of OFT's outstanding shares, stating that BOC was a logical partner for OFT because of the

synergies that could be achieved in the brokerage businesses, and that, as a result, BOC was

confident that "it could offer a price per share substantially in excess of OFT's current trading

price" and it would like to "discuss a possible acquisition of OFT with both management and the

OFT board"; (v) Gooch harbored a personal animosity towards BOC and its management and

would not do business with them; (vi) Gooch, as a representative of JPT - which controlled

approximately 38% of OFT - had told the OFT's Board prior to its acceptance of the CME Deal

that "JPT intended to vote against any transaction involving OFT with any party other than CME";

(vii) unlike the CME Deal, the sale of OFT as a whole - which had not been properly explored

due to the Management Consortium's desire to take the Brokerage Business private - would

maximize shareholder value, as the Company's bankers had informed Defendants as early as

2013; and (viii) the price CME was paying for the Software Business was artificially low based

on the structure of the deal mandated by Gooch.

52. Moreover, implicit in these aforementioned statements is a representation that the

Company and its management fulfilled their fiduciary duties under applicable law when

negotiating the sale of the Company. Here, however, these duties were breached by a failure to,

among other things: (i) conduct a reasonable market check; and (ii) negotiate with an interested

third party. Thus, Defendants Gooch and Heffron's statements were not only substantively false

18


and misleading, but they also falsely implied that the Company had engaged in the safeguards

necessary to ensure the fairness of the transaction.

THE TRUTH IS REVEALED

53. In a September 9, 2014 press release filed by BOC with the SEC on Form 8-K, it

became public that OFT had in fact received a letter from BOC on July 29, 2014— the day before

OFT announced the acquisition agreement with CME - detailing BOC's interest in acquiring

100% of OFT. Notably, OFT had still failed to disclose this material information to shareholders,

and the public only learned of it through BOC's press release. BOC reprinted in the Form 8-K

the following letter it sent to OFT on September 8, 2014, in which BOC also declared its intent to

take its offer directly to OFT shareholders in the form of a tender offer:

To the Board of Directors of OFT Group Inc. ("OFT"):

As you know, BGC Partners, Inc. ("BGC") has over the course of several years repeatedly expressed an interest in acquiring GFI, and on July 29, 2014 delivered a letter to Messrs. Michael Gooch and Cohn Heffron detailing its interest in acquiring 100% of GFI. We had expected to engage in a discussion, and therefore we were surprised to read the press release announcing your agreement with CME Group Inc. ("CME'). Your agreement provides for a two-step transaction in which CME will acquire all of the outstanding shares of OFT in exchange for $4.55 per share in CME Group Class A Common Stock, and immediately sell OFT's wholesale brokerage and clearing businesses (including net cash, cash equivalents and clearing deposits of $191 million) to a private consortium of OFT's management, including Messrs. Gooch and Heffron, for $165 million in cash and the assumption, at closing, of certain unvested deferred compensation and other liabilities.

BOC owns approximately 13.5% of OFT's common stock. We believe that OFT's customers and brokers would benefit from OFT being part of a larger, better capitalized and more diversified company. We are confident that a combination of OFT and BOC will produce increased productivity per broker, meaningful synergies and significant cost savings. We therefore continue to seek a negotiated merger with OFT that would provide superior value to your shareholders, and we are prepared to begin such negotiations immediately. However, given your lack of response to our offers, and our belief that the pending transaction deprives OFT shareholders of the opportunity to realize appropriate value, particularly given the significant discount agreed to with respect to the purchase of the brokerage and clearing business, we intend to make an offer directly to the OFT shareholders.

19


Our plan is to commence a cash tender offer to purchase 100% of the outstanding shares of common stock of GFI at $5.25 per share in cash, representing a premium of (t) more than 68% to the price of GFI's common stock on July 29, 2014, the day before announcement of the transaction with CME, and (it) more than 15% to the price offered by CME. Our tender offer will be conditioned on the tender of a sufficient number of shares of common stock of OFT such that, when added with the OFT common stock that we own, we would own a majority of the outstanding OFT common stock, on a fully diluted basis. The tender offer will not be subject to any financing contingency. Nor will the offer be subject to the negotiation or execution of any merger agreement or other agreement with OFT or CME.

This all-cash offer will provide the GFI shareholders with immediate, certain and compelling value, without material contingencies.

We believe that there should not be any obstacles to completing our tender offer expeditiously. Our antitrust advisors at Wachtell, Lipton, Rosen & Katz have conducted an analysis of the competitive landscape and, based on their extensive experience and knowledge of the industry, have independently determined that there are no material regulatory obstacles to completing the transaction.

Without material contingencies and at a significant all-cash premium to the pending transaction, we believe that our offer constitutes a superior proposal to the pending transaction, and that your shareholders will find our offer extremely compelling.

By approving the merger agreement with CME, you, OFT's board of directors, have determined to sell the company for $4.55 per share. Therefore, any action that you take, or allow the company or its management to take, to impair the ability of your shareholders to accept our $5.25 per share offer (such as the adoption of a poison pill), or that would negatively affect the value of the company (including actions outside of the ordinary course of business or inconsistent with past practice), either prior to, or after we commence our offer would be a clear breach of the board's fiduciary duties. We will consider any and all options available to us to halt, block or otherwise limit any such inappropriate actions. Our proposal is clearly superior to the existing transaction involving CME and GFI's management, a transaction that we believe reflects deep conflicts of interest

We are prepared to make the offer to the OFT shareholders, but we continue to be willing to negotiate directly with OFT, Messrs. Gooch and Heffron and CME regarding a consensual transaction among the parties. We are open to discussing and addressing social issues such as senior management team composition and other concerns that you may have. We are available to commence such discussions immediately and hope that you accept our invitation to do so.

Sincerely,

20


Shaun D. Lynn President BOC Partners, Inc.

[Emphasis added].

54. Also reprinted in the Form 8-K was BOC's July 29, 2014 letter to Defendants

Gooch and Heffron indicating BOC's interest and ability to acquire OFT at a higher price. This

letter provided, in relevant part:

T have always had tremendous respect for you both, your company and the success of your business. It is this respect that leads us to propose discussions concerning our interest in acquiring OFT Group, Inc. ("OFT") by means of an acquisition of all or substantially all of OFT's assets or an acquisition of 100% of OFT's outstanding shares (the "Transaction").

We believe that OFT and BOC Partners, Inc. ("BOC") are an excellent fit together, and that the combination of our businesses is compelling from both an operating synergy and growth perspective. The combined company would offer a larger platform from which we can together grow our wholesale brokerage and electronic trading businesses, and our experience and strong track record of success with electronic trading and financial services technology provides a compelling rationale for a Transaction.

Based on publicly available information and our knowledge of OFT, we are confident we can offer a price per share substantially in excess of OFT's current trading price, in cash, stock or some combination thereof.

Because we believe we can offer a price per share at a substantial premium to current trading prices, representing an immediate, certain and compelling value to OFT's shareholders, we hope you will share our proposal with your Board of Directors and meet with us to discuss a possible acquisition of OFT by BOC in more detail. If you would like, we would welcome the opportunity to discuss a potential Transaction with you prior to or contemporaneously with your discussions regarding this letter with your Board of Directors. (We would also be willing to discuss an acquisition involving solely the stock or assets of Trayport.)

It is our preference to work together with you both and the OFT Board of Directors to reach a mutually agreeable Transaction. We strongly prefer to conduct our negotiations with you privately and in an expeditious manner. We ask that BOC's interest in OFT and the existence and contents of this letter be kept confidential and not disclosed without our prior written consent.

21


I hope that each of you and the OFT Board of Directors will recognize the outstanding opportunity presented by an acquisition of OFT by BOC. We look forward to discussing a possible transaction with you.

55. BOC's September 9, 2014 offer of $5.25 per share valued OFT at $675 million

and was 15% higher than the proposed all-stock transaction announced between OFT and CME in

July 2014. In its press release announcing this offer, BOC noted that OFT's deal with CME

"deprives OFT shareholders of the appropriate value of their investment."

56. On the disclosure of this news, OFT's stock price jumped 20%, from $5.03 on

September 8, 2014 to $6.02 on September 12, 2014. Plaintiff and the Class did not, however,

receive the benefit of this price increase. Rather, they were damaged by Defendants' prior false

and misleading statements, including the representation that the CME Deal "represent[ed] a

singular and unique opportunity to return value" to OFT shareholders. [Emphasis added].

57. Notably, OFT had never disclosed that BOC had made prior offers to acquire the

Company. Indeed, OFT did not even publicly acknowledge the offer or any communications

from BOC until September 15, 2014, when OFT filed a press release with the SEC on Form 8-K

announcing that it had received the acquisition proposal from BOC.

POST-CLASS PERIOD DEVELOPMENTS AND DISCLOSURES

58. OFT subsequently rebuffed BOC's offer for a negotiated merger, claiming that the

two companies could not reach a confidentiality agreement. In response, BOC CEO Lutnick

lambasted this accusation: "[d]espite our best efforts to engage with OFT regarding a negotiated

transaction, we have been met with only unreasonable demands and delay tactics in connection

with our attempts to execute even a confidentiality agreement covering information on the

Trayport and FENTCS businesses with OFT and its management."

22


59. On October 22, 2014, BOC filed its tender offer materials with the SEC. In its

SEC Form SC TO-T filing, there is a section entitled "Have you discussed this Offer with OFT?,"

which provides:

On July 30, 2014, OFT entered into the CME Merger Agreement. That agreement prohibits OFT from (i) engaging in discussions with third parties (including us) regarding a potential acquisition of Shares unless certain conditions are satisfied or (ii) providing non-public information regarding OFT without the execution of a confidentiality agreement meeting specifications set forth in the CME Merger Agreement. On September 8, 2014, we delivered a letter to the board of directors of OFT indicating our interest in acquiring 100% of the OFT common stock at $5.25 per Share. This letter was made public by BOC on the following morning through a press release announcing its intention to commence an offer for OFT common stock.

Following the delivery of our letter, on September 15, 2014, GFI announced that the board of directors of GFI, upon the recommendation of the special committee of the GFI board (the "GFI Special Committee'), determined that the offer set forth in our September 8 letter to GFI could reasonably be expected to lead to a "Superior Proposal" as defined in the CME Merger Agreement Following such announcement by OFT, counsel for the OFT Special Committee and counsel for BOC negotiated a confidentiality agreement that BOC believed was sufficiently protective of OFT and met the terms of the CME Merger Agreement, and BOC was prepared to execute that agreement. The OFT Special Committee, however, determined that it was unable under the CME Merger Agreement to provide information with respect to its business unless we signed a confidentiality and non-solicitation agreement containing provisions that we found to be unacceptable. As a result, we have not executed a confidentiality agreement, we have not engaged in any significant discussions relating to this Offer, and no agreement has been reached with respect to this Offer. See "The Offer—Section 1 1—Background of the Offer; Other Transactions with OFT".

[Emphasis added].

60. BOC's filing also contains a section entitled "Background of the Offer; Other

Transactions with OFT." It provides, in relevant part:

As part of their ongoing evaluation of BOC's business and strategic alternatives, BOC's board of directors and senior management, on occasion with outside legal and financial advisors, have from time to time evaluated strategic opportunities and prospects for acquisitions across the brokerage industry. In the course of its ongoing evaluation, BOC's management team considered and reviewed an acquisition OFT.

23


Over the past three years, Shaun D. Lynn, President of BGC, expressed interest to GFI in a combination of BGC and GFI, including an acquisition by BGC of GFI. During these conversations, Mr. Lynn and GFI management discussed the possibility of a transaction between the two companies and the potential opportunities that combining the businesses could produce. However, a confidentiality agreement was never executed

On July 29, 2014, Mr. Lynn sent a letter to Michael Gooch, Executive Chairman of GFI, and Cohn Heffron, Chief Executive Officer of GFI. The letter expressed BGC's interest in acquiring GFI by means of an acquisition of all or substantially all of GFI's assets or an acquisition of 100% of GFI's outstanding shares. In the letter, BGC expressed its view that the combination of the two companies was compelling from an operating synergy and growth perspective, and that the combined company would offer a larger platform from which to grow its wholesale brokerage and electronic trading businesses. BGC also expressed its confidence that it could offer a price per share substantially in excess of GFI's current trading price, in cash, stock or some combination thereof and that expressed its desire to discuss a possible acquisition of GFI with both management and the GFI Board BGC received no response to its letter.

[Emphasis added].

61. On November 12, 2014, BOC issued a letter to OFT shareholders clarifying the

terms of its tender offer. In this letter, which was filed with the SEC as an attachment to BOC's

Form SC TO-T/A filing, BOC wrote:

BGC Has Long Desired a Transaction with GFI. Over the course of several years, we have repeatedly expressed an interest in acquiring OFT. We have done this via direct communication with members of OFT's management team, as well as through outside intermediaries. Indeed, on July 29, 2014, the day before the CME transaction was announced, we sent a letter reiterating our interest in a transaction directly to Messrs. Michael Gooch and Cohn Heffron. We began to acquire a significant number of shares of GFI common stock more than a year earlier. Our interest in acquiring GFI is therefore neither recent nor did it begin after the CME announcement.

[Emphasis added].

24


62. On November 20, 2014, as noted in the press release attached as an exhibit to

Form SC TO-T, BOC extended the deadline for its tender offer that was going to expire to

December 9, 2014.

63. On December 2, 2014, as noted in the press release attached as an exhibit to a

Schedule 14D-9 filing, CME increased its offer to $5.25 per share in order to meet the price

BOC was offering in its tender offer.

64. On December 9, 2014, as noted in a Schedule 14D-9 filing, BOC extended the

deadline for its tender offer that was going to expire to January 6, 2015.

65. On December 19, 2014, BOC increased its offer from $5.25 per share to $5.45 per

share, as noted by BOC in a press release attached as an exhibit to a Form SC TO-T. On January

7, 2015, BOC extended the deadline for its tender offer that was going to expire to January 27,

2015.

66. On January 9, 2015, BOC wrote in a press release attached as an exhibit to a Form

Sc TO-T filing: "[t/ recap the situation, over the past three years, we have expressed an

interest in a potential combination of BGC and GFI, and members of our management and

GFI management have had explicit discussions regarding such a potential combination."

[Emphasis added]. Lutnick reiterated, "BGC clearly expressed our interest in acquiring GFI to

GFI's management prior to the announcement of the CME-GFI transaction." [Emphasis

added].

67. On January 14, 2015, BOC increased its tender offer to $5.60 per share, after

CME had increased its offer to match BOC's previous $5.45 offer, as noted by BOC in a press

release attached as an exhibit to a Form SC TO-T filing. The very next day, BC}C again

increased its offer to $5.75 per share on a non-contingent basis, and $5.85 on a contingent basis,

25


again in response to CME increasing its offer to meet BGC's previous tender offer price of $5.60

per share, as noted by BGC in a press release attached as an exhibit to a Form SC TO-T.

68. On January 20, 2015, BGC again increased its offer, this time up to $6.10 per

share, after CME had increased its offer to meet the previous $5.85 offer price, as noted by BGC

in a press release attached as an exhibit to a Form SC TO-T filing.

69. On January 21, 2015, BOC filed a press release as an attachment to a SEC Form

Sc TO-T filing indicating that Institutional Shareholder Services ("ISS"), a leading proxy

advisory service, recommended that OFT shareholders vote against the "economically inferior"

merger with CME. 2

70. On January 22, 2015, BGC filed another press release with the SEC as an

attachment to a Form SC TO-T. This press release stated that Glass Lewis, another leading

independent proxy advisory service, also recommended that OFT shareholders vote against the

merger with CME. 3 According to the press release, Glass Lewis wrote: "In hindsight, it seems

readily apparent the GFI board's flawed and conflicted process failed to extract any significant

semblance of maximum value or a favorable price, and further failed to fully incorporate

those bidders willing to offer decidedly greater value to GFI investors... [Emphasis added].

The press release also stated: "Glass Lewis observed: '...We believe the sum of these factors

overwhelmingly suggest investors should have little - if, truly, any - confidence the present

2 http://www.sec.gov/Archives/edgar/data/109483 1/0001193125150 16200/d856033dex99a

Sn.htm.

http://www.sec.gov/Archives/edgar/data/1094831/0001 193 125 150 17687/d857062ddfan1

4a.htm.

26


arrangement represents, within reasonable doubt, the most attractive value available to OFT and

its shareholders ....

71. On January 27, 2015, Defendant Gooch and JPT, among others, filed a Schedule

14D-9 with the SEC, which is a Solicitation/Recommendation Statement under §14(d)(4) of the

Securities Exchange Act of 1934. 4 hithis SEC filing, OFT laid out its version of the events

leading up to the CME Deal. Among other things, OFT admitted that the Company refused to

contact those entities most likely to buy OFT - i.e., competitors in the Brokerage Business -

ostensibly due to concerns about possible leaks and the belief that such entities might not want to

buy OFT. In other words, OFT did not contact competitors because it thought they would not be

interested. Such rationales ring hollow given the fact that at least one competitor, BOC, had

expressed such interest for years, and that confidentiality agreements are routinely entered into

by companies exploring strategic transactions. Moreover, as detailed below in ¶J76 and 78,

Jefferies, had previously identified OFT's competitors as those entities most likely to pay the

highest price. In pertinent part, OFT's January 27, 2015 Schedule 14D-9 states:

On March 14, 2014, representatives of Greenhill met with the Special Committee and reviewed the meetings Greenhill had held with representatives of OFT management, representatives of Jefferies and representatives of Willkie Far and summarized Oreenhill's understanding of the discussions with third parties regarding potential strategic transactions involving OFT that had occurred prior to the engagement of Greenhill. Representatives of Greenhill then reviewed with the Special Committee a range of potential strategic alternatives and sale processes alternatives. Representatives of Greenhill and the Special Committee discussed the merits and key considerations for each of the different alternatives presented. Greenhill then identified 22 third parties that might be interested in pursuing a strategic transaction involving OFT and discussed the merits and considerations for each, including which of these third parties might have both the financial capability and strategic interest to pursue a potential transaction and which had

http://www.sec.gov/Archives/edgar/data/1292426/000 1047469 15000439/a222 1907zsc14

d9.htm.

27


the ability to use publicly traded stock consideration to maximize the tax benefits to OFT Stockholders. The third parties were split into three groups, "tier one" consisting of nine companies that Greenhill considered most likely to pursue a transaction with GFI, a second group consisting offour companies (including BGC) that compete with the 1DB Business and a third group consisting of nine other third parties that were viewed as less likely to be interested in or capable of completing a transaction with GFI. The Special Committee and representatives of Greenhill discussed the risks and benefits of approaching third parties at this time. The Special Committee instructed representatives of Greenhill to approach the "tier one" parties (other than CME and one other specified company, due to the concerns relating to potential leaks with respect to this company), and to refrain from contacting the competitors of the 1DB Business and the other third parties, believing that approaching the competitors of the 1DB Business would pose a higher risk of information leaks and the third group of companies' interest in a potential transaction was too speculative. The Special Committee noted that, were such discussions to leak, OFT could be damaged through harm to OFT's relationships with customers and employees, including its ability to attract and retain personnel.

Greenhill began to reach out to the seven designated "tier one" parties, and by March 19, 2014 Greenhill had contacted and had exploratory discussions with six of them.

[Emphasis added].

72. Significantly, the January 27, 2015 Schedule 14D-9 also discusses a March 19,

2014 meeting of the Special Committee in which Mr. Gooch asserted the potential leaks

rationale for failing to approach competitors in the Brokerage Business and made clear that JPT

would vote against any transaction other than the CME Deal. Thereafter, the Special Committee

gave up looking at any alternatives to the CME Deal:

At a meeting of the Special Committee held on March 19, 2014, representatives of White & Case again discussed with the members of the Special Committee their fiduciary duties, and representatives of Greenhill provided an update to the Special Committee regarding the third parties it had contacted in connection with a potential transaction involving OFT. Representatives of Greenhill summarized their discussions with six "tier one" parties it had contacted, and indicated that one showed an interest in pursuing a potential transaction, two indicated they might be interested after reviewing additional information regarding a potential transaction and three indicated that they had no interest in such a transaction. At the invitation of the Special Committee, Mr. Gooch and other representatives of OFT management, as well as Willkie Far, joined the meeting with the Special Committee. Mr. Gooch informed the Special Committee that he was speaking

28


solely in his capacity as stockholder and a representative of JPT. Mr. Gooch informed the Special Committee that he would respect any decision made by the Special Committee regarding a potential transaction with CME involving OFT, and would support a stockholder vote requiring a majority of the outstanding Shares excluding Shares owned by JPT voting to approve any transaction with CME. Mr. Gooch also expressed his support of a potential transaction with CME, stating that he believed such a transaction would maximize the value for OFT Stockholders. Mr. Gooch expressed concern that discussing a potential transaction involving GFI with third parties other than CME could result in information leaks that could jeopardize any potential transaction with CME. Mr. Gooch went on to emphasize that while JPI would respect the Special Committee's ability to say "no" to any transaction, the Special Committee should understand that if CME raised its offer price for GFI, JPI, as GFI's largest stockholder, presently intended to vote against any other transaction presented to GFI Stockholders. After Mr. Gooch and the other representatives of GFI left the meeting, the Special Committee discussed the implications of stopping all discussions with third parties (other than CME) regarding a potential transaction involving GFI. The Special Committee then instructed Greenhill to stop all such discussions until otherwise instructed.

[Emphasis added].

73. This January 27, 2015 Schedule 14D-9 further reveals that OFT did not perform a

market check prior to entering into the CME Deal. According to the SEC filing:

On April 10, 2014 . . . [t]he Special Committee discussed the merits and considerations of conducting a market check for other parties interested in a strategic transaction involving OFT and the potential risks of contacting third parties, including the potential risk of competitive harm to OFT if strategic buyers conducted due diligence but a transaction did not occur, and the increased risk of leaks, which could create instability among OFT's employees as well as its customers. The Special Committee also discussed whether a market check would be valuable to the process given Mr. Oooch's ability to block any transaction and his statement that JPT intended to vote against any transaction involving OFT with any party other than CME. Representatives of Greenhill informed the Special Committee that they were working with OFT management to obtain updated financial projections for OFT as a whole and the TDB Business so that Greenhill could further evaluate a potential transaction.

* * *

On April 22, 2014 . . . Mr. Gooch then described why he perceived that the April 17 Proposal was in the best interests of OFT Stockholders and described potential problematic features of potential transactions involving other purchasers, including their ability to fund a transaction, the lack of liquidity in their stock and the diminished strategic benefits these purchasers would be able to derive from

29


the assets, but then indicated to the Special Committee that it should make its own determination. Mr. Gooch, the Special Committee and the advisors to the Special Committee then further discussed the merits and risks of the Special Committee conducting a market check of the April 17 Proposal, and during this discussion Mr. Gooch stated that he had already explored whether other parties might be interested in a strategic transaction and that the party ("Company A") (other than CME) that was mostly likely to be interested in and capable of consummating a transaction was unwilling to pay more than $3.85 per Share, which was far lower than the indications of value from CME. Mr. Gooch then left the meeting.

See also Handwritten Notes from Barclays, CME's financial advisor (attached hereto as Exhibit

5) ("Committee wanted market check but Mickey stopped the process ... [so it] did not

happen[.]").

74. Later, Defendant Gooch testified that BGC was not the only company that was

interested in acquiring all of GFI's business. Defendant Gooch testified that Tradition NA, a

competitor, had stated that they "would be interested in a complete merger of our 1DB business

with their 1DB business." Deposition of Michael Gooch (Dec. 11, 2014) ("Gooch Deposition")

(attached hereto as Exhibit 6) at 145:23-146:7. Defendant Gooch, however, refused Tradition's

approach, and never even gave the Special Committee an opportunity to consider this other offer.

See Ed. at 146:8-14 ("Q. Okay. And you were not interested in that? A....[W]e were just

looking at that point in time to bring a potential minority investor [in] . . . to participate. . . in the

transaction as opposed to a full merger with a competitor.").

75. That other brokerage firms would have been interested in buying the Brokerage

Business is further supported by the fact that even after BGC's offer, which was higher than the

CME Deal, Tradition stated that it was "interested in a complete merger of [GFI's] 1DB business

with [Tradition's] 1DB business." Exhibit 6, Gooch Deposition at 146:6-7.

76. Furthermore, documents and deposition testimony provided in the Delaware

Action demonstrate that in 2013, investment bankers from Jefferies advised Defendant Gooch in

30


his capacity as Executive Chairman of OFT that OFT could achieve maximum value by selling all

of OFT to an TDB competitor (like BOC), because such a sale would unlock as much as $98

million in synergies that could be used as negotiating leverage for the benefit of OFT's public

stockholders. Exhibit 2, Yavorsky Deposition at 90:17-91:14; see also Presentation by Jefferies

to OFT "Transaction Process and Structure" dated July 1, 2013 ("Jefferies Presentation) (attached

hereto as Exhibit 7), at JEFF000 19431. Such synergies would not be achieved if OFT was sold to

a company without an TDB business. Exhibit 2, Yavonsky Deposition at 81:17-82:6.

77. Defendant Heifron later testified at his deposition that it was "not a very complex

thought" that combining two TDBs would create "synergies." Exhibit 3, Heifron Deposition at

48:2-11. Heifron further testified "[s] the idea that if you put two brokerage houses together

that there's synergies. So if you put two TDBs together and you save a lot of money, that there's

synergies, have T ever had that thought or had that sentence or conversation? I'm sure T have."

Id. at 42:15-21.

78. Notably, OFT's new owner, BOC, has confirmed that it too believed that

combining OFT's TDB with its own will result in synergistic saving of $90 million. See BOC

Partners, Inc.: Sandler O'Neill + Partners, L.P. Global Exchange and Brokerage Conference

2015 (June 3-4, 2015), http://www.wsw.com/webcast/sandler5/bgcp/, timestamp 19:27 (free

registration required) ("we're going to take 90 million dollars of costs out of the company. ,).5

Ironically, it appears that Defendants Gooch and Heifron will not only benefit from their

new employment contracts, but they will also reap the benefits of the synergies that will be

achieved by combining BCO's TDB with OFT's TDB. This is because, according to BCO's

Lutnick, the Management Consortium's $6. 10 per share will be paid 80% in stock and 20% in

cash. See Ed.

31


79. Jefferies alternatively proposed marketing the entire company to 1D13 competitors

while exploring the sale of the software business to a different third-party buyer who might be

willing to pay a premium for that business. See Exhibit 2, Yavorsky Deposition at 77:10-17 ("Q.

Okay. The next bullet says, 'Optimal approach may be to engage with an 1D13 . . . to sell the

entire company (cash or stock) while retaining the option to sell Trayport and FENICS for cash

to another strategic buyer.' Was that Jefferies' view at the time this presentation was made? A.

Yes, it was."); see also Exhibit 7, Jefferies Presentation at JEFF000 19420.

80. Yet, as was later disclosed, Gooch rejected any structure that did not result in the

Management Consortium's private ownership of the 1D13. Jefferies even documented that

"Mickey ... [w]ants to keep 1D13, and run it as a debt-free well-capitalized private company."

See Email from Alexander Yavorsky (at Jefferies) to another Jefferies employee dated February

13, 2013 (attached hereto as Exhibit 8). Gooch confirmed the same at his deposition, stating that

"all along, [he] ha[s] been most interested in keeping the broker/dealer business and taking it

private." Exhibit 6, Gooch Deposition at 42:10-15.

81. In sum, months before the CME Deal was announced, Defendants (and the

Special Committee) knew that BGC, and other 1D13 competitors, would potentially be interested

in a deal for GFI, yet the Special Committee decided against approaching every single

competitor in the Brokerage Business because Gooch and the Management Consortium wanted

to keep that part of the business for themselves. Moreover, the Special Committee ultimately

instructed Greenhill, its financial advisor, not to pursue any other deals that would not involve

Defendant Gooch obtaining control of the business. Despite this utter lack of due diligence or

any sort of market check, Defendants nevertheless represented to GFI shareholders that the CME

Deal would: (i) optimize shareholder value; and (ii) represent a "singular and unique"

32


opportunity to return value to shareholders. They further touted - without a meaningful factual

basis - the benefits of the transaction in "unlock[ing] the substantial value of our Trayport and

FENICS technology business." Given Defendants' non-negotiable position regarding the

structure of any potential deal, and the concomitant failure to explore any other options,

Defendants knew or were reckless in not knowing that statements concerning the CME Deal

were false and/or misleading. Moreover, the new owner of OFT believes that the process by

which the CME Deal was negotiated was not designed to, and did not, maximize the value of

OFT's Software Business. On OFT's April 29, 2015 earnings call with analysts, Lutnick had the

following exchange with an analyst:

[Analyst: On [Trayport, the previous sale price that OFT had agreed to assume the group clearly wasn't competitive bidding process. Do you think there is upside for the [Trayport] valuation versus the number that was out there previously? [Sic].

[Lutnick]: Yes. Imagine me speaking in one-word answer. Shocking. Sorry, Patrick, but another point was that they negotiated that on last year's numbers, and the company has done very well this year. So you have newer numbers as well. [Sic].

82. On the same April 29, 2015 call, referring to Trayport, Lutnick also stated that in

order to properly maximize shareholder value, "we are going to explore getting the right price

for this asset." [Emphasis added].

83. Lutnick's statements further demonstrate that Defendant Heifron's statement that

the CME Deal "unlocks the substantial value of our Trayport and FENTCS technology businesses

in a tax efficient manner" was false and misleading. In fact, CME was getting those assets (the

Software Business) at a below-value price as a quid pro quo for participating in Defendant

Oooch's preferred deal structure. Similarly, on June 3, 2015, Lutnick, speaking at a Sandler

O'Neill + Partners Global Exchange and Brokerage Conference 2015, further confirmed that the

33


software business was undervalued in the CME Deal and would likely be sold for far more

money. See BGC Partners, Inc.: Sandler O'Neill + Partners, L.P. Global Exchange and

Brokerage Conference 2015, supra ¶78,

84. Indeed, CME understood that it was purchasing the Software Business at an

inadequate price based on the flawed transaction structure mandated by Gooch and JPI. CME

joked that it could bring the CME Deal to completion by "allow[ing] each SC member to select

one item off the dollar menu at McDonalds to close this out." July 3, 2014 email from John

Pietrowicz of CME to Joel Fleck of Barclays (attached hereto as Exhibit 9).

85. The January 27, 2015 Schedule 14D-9 also reveals that the Special Committee

voted to approve the CME Deal without knowledge of BGC's July 29, 2014 letter expressing

interest in the Company. After learning of BGC's inquiry, the Board - including Defendants

Gooch and Heffron - concluded, without actually speaking with BGC, that it was not worth

pursuing. Specifically, the filing states:

On July 29, 2014, the Special Committee met to discuss the proposed transaction. The Special Committee was informed by representatives of GFI management that articles and rumors around the proposed transaction with CME had been published in certain trade publications.

* * *

Representatives of White & Case also reviewed with the Special Committee the terms of the proposed JPI Merger Agreement, the 1DB Purchase Agreement, the GFI Support Agreement and the financing commitment from Jefferies to 1DB Parent. After considering, among other items, the proposed terms of the GFJICME Merger Agreement, the JPI Merger Agreement, the 1DB Purchase Agreement, the GFI Support Agreement and the Commitment Letter, the various presentations it received from its legal and financial advisors (including Greenhill's opinion dated July 29, 2014), and taking into consideration the factors described the Proxy Statement/Prospectus, the Special Committee determined that the GFI/CME Merger Agreement and the GFI/CME Merger were advisable, fair to and in the best interests of GFI and its stockholders and approved the GFJICME Merger Agreement and the GFJICME Merger and recommended to the GFI Board

34


that it adopt and declare advisable the OFJICME Merger Agreement and the OFI/CME Merger.

* * *

Immediately following the conclusion of the meeting of the Special Committee, the OFT Board met along with certain members of OFT management, financial and legal advisors to the Special Committee and Willkie Far, and the Special Committee reported that it had unanimously recommended that the OFT Board approve, adopt and declare advisable the OFJICME Merger Agreement and the OFJICME Merger and recommend to OFT Stockholders that such stockholders adopt the OFT/CME Merger Agreement and approve the OFT/CME Merger. The GFI Board also discussed a letter emailed to Mr. Gooch and Mr. Heffron earlier that day from BGC. Mr. Gooch read aloud the letter to the other participants at the meeting, who were previously unaware of the letter. In the letter, BGC expressed an interest in initiating discussions regarding a potential strategic transaction involving GFI, but did not set forth any valuation ranges for GFI. The members of the GFI Board, given their prior experiences with representatives of BGC and familiarity with the industry, concluded that BGC's proposal was highly speculative in nature given its lack of any specificity, and did not ensure that discussions with BGC would result in a definitive proposaL Further, the GFI Board concluded in its judgment, that BGC was unlikely to pay a higher premium for GFI than CME. In addition, Mr. Gooch, in his capacity as a representative of JPT, noted that JPT intended to vote against any transaction involving OFT with any party other than CME. After further discussion, the OFT Board moved to vote on the OFJICME Merger Agreement. Messrs. Gooch and Heifron abstained from the vote, and the remaining members of the OFT Board (which consisted of the members of the Special Committee), acting on behalf of the entire OFT Board unanimously voted to approve, adopt and declare advisable the OFT/CME Merger Agreement and the OFT/CME Merger and further to recommend that OFT Stockholders adopt the OFT/CME Merger Agreement and approve the OFT/CME Merger, and that the approval of the OFJICME Merger be submitted for consideration of OFT Stockholders at a special meeting of such stockholders.

[Emphasis added].

86. There is a factual dispute regarding whether the Special Committee was aware of

the BOC letter of interest at the time it approved the CME Deal. While the Schedule 14D-9

quoted above says that it was not, the Special Committee filed papers in the Delaware Action

claiming, without citation to any evidence, that it was. This is clearly an issue of fact. Questions

also exist as to the veracity of other facts set forth by Gooch and JPT in the Schedule 14D-9. For

35


example, the Schedule 14D-9 expressly states:

On June 6, 2013, representatives of Jefferies and Wachtell, Lipton, Rosen & Katz LLP ("Wachtell") provided and discussed with representatives of OFT management various potential transaction structures, pursuant to which the TDB Business would be separated from the remainder of OFT in an acquisition. Also on June 6, during a regularly scheduled meeting of the OFT Board, OFT management discussed with the OFT Board potential strategic alternatives that OFT could consider. 6

Yet, the minutes of GFT's June 6, 2013 Board of Directors Meeting states that "Mr. Oooch

updated the Board on corporate strategy and state that the Company was not considering any

merger opportunities and had no current plans to dispose of any assets." Minutes from the

Meeting of the OFT Board of Directors (Oct. 17, 2013) at 4 (attached hereto as Exhibit 10).

87. OFT then proceeded to issue the statements that are the subject of this action. See

supra at ¶J48-50.

88. On January 30, 2015, OFT shareholders rejected CME's offer. On the same day,

OFT issued a press release in which it announced "that the Company's Board of Directors will

explore strategic alternatives with any and all interested parties to maximize shareholder value

for all shareholders. "7 Shortly thereafter, on February 2, 2015, OFT issued a press release in

which it urged shareholders to reject BGC's tender offer of $6.10 per share, which was over 34%

higher than the $4.55 per share CME Deal. 8 Gooch was quoted in this press release as stating

6 http://www.sec.gov/Archives/edgar/data/1292426/000104746915000499/a22229

00z425.htm at 21

http://gfigroup.investorroom.com/20 15-0 1-30-OFT-Oroup-Board-Announces-

Exploration-of-Strategic-Alternatives

8 http://gfigroup.investorroom.com/201 5-02-02-OFT-Oroup-Board-Comments-on-BOC-

Tender-Offer

36


that, while the Board and management were disappointed that shareholders had rejected the deal

with CME and the Management Consortium, the Board and management would now "work

tirelessly to find a strategic alternative that offers the Company's shareholders the chance to

maximize the value of their investment." Incredibly, Defendant Gooch had previously

characterized the CME Deal, in which he and Defendant Heffron would personally benefit, as a

"singular and unique opportunity to return value" to shareholders.

89. Notably, the Special Committee specifically disavowed that OFT was authorized

to issue the January 30 and February 2, 2015 statements. On February 3, 2015, Glenn Kurtz, a

partner at White & Case LLP, and attorney-of-record for the Special Committee, sent an email to

plaintiffs' counsel in the Delaware Action stating:

The Special Committee members have authorized me to respond to your inquiry as follows: (i) they did not vote to issue the February 2 [P]ress [R]elease, (ii) they never saw a draft of the February 2 [P]ress [R]elease, (iii) they did not know that OFT intended to issue the February 2 [P]ress [R]elease, (iv) they did not vote to urge stockholders to not tender into the BOC tender offer or to not take any action on the BOC tender offer after the CME merger agreement was terminated, and (v) they did not vote last Friday[, January 30, 2015] to explore new strategic alternatives as described in the January 30 and February 2 [P]ress [R]eleases.

Exhibit 1, Lebovitch Affidavit, ¶7.

90. Then, on February 18, 2015, as noted in a Schedule 14D-9 SEC filing, OFT's

Special Committee issued its own press release stating that Gooch's letter "did not . . . represent

the positions of the Board or the Special Committee, but rather the views of Messrs. Gooch and

Heffron and JPI."

91. By February 27, 2015, BOC's tender offer was complete. 9

http://www.sec.gov/Archives/edgar/data/109483 1/0001193 125 1 5070179/d882393dex

99a5w.htm.

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SPECIFIC OMISSIONS BY DEFENDANTS

92. As set forth in ¶J6, 51-52 supra and 97 infra, Defendants' statements were

materially false and misleading in that they failed to disclose material information and

misrepresented the truth about the CME Deal. Post-Class Period disclosures, including those

obtained through discovery in the Delaware Action, provide additional support for these

allegations:

GFI Failed to Disclose Post-Class Period Revelations Demonstrating the Omitted Facts

Defendant Gooch personally moved to block Gooch told the Special Committee "that he any other business combination other than the wasn't interested in doing another deal with CME Deal. anybody else but the CME... [and didn't

want us to do any more negotiating." Deposition of Richard W.P. Magee (Special Committee member) (Dec. 9, 2014), at 102:22-103:4 (attached hereto as Exhibit 11).

"Mr. Gooch disclosed that. . . he was not willing, at that time, to support of the sale of the GFI brokerage businesses unless it involved a potential investor group comprising of Messers. Heifron and Brown." Minutes from the Meeting of the GFI Board of Directors (Oct. 17, 2013) at 4 (attached hereto as Exhibit 10).

Before the July 30, 2014 announcement of the "The BGC entities have over the course of CME Deal, BGC had contacted Defendants several years repeatedly expressed an interest and notified them of their interest in acquiring in acquiring GFI. On July 29, 2014, BGC 100% of GFI. Partners, Inc. delivered a letter to Messrs.

Michael Gooch. . . and Cohn Heifron. detailing its interest in acquiring 100% of GFI and its entire business." September 15, 2014 Form SC 13D filing by BGC at 11.

"BGC Has Long Desired a Transaction with GFI. Over the course of several years, we have repeatedly expressed an interest in acquiring GFI. We have done this via direct communication with members of GFI's management team, as well as through outside intermediaries. Indeed, on July 29, 2014, the

38


day before the CME transaction was announced, we sent a letter reiterating our interest in a transaction directly to Messrs. Michael Gooch and Cohn Heffron. We began to acquire a significant number of shares of OFT common stock more than a year earlier. Our interest in acquiring OFT is therefore neither recent nor did it begin after the CME announcement." November 12, 2014 Press Release by BOC filed with the SEC as an exhibit attached to a Form SC TO-T on November 12, 2014, at 3 (emphasis in original).

Defendant Gooch had personal animosity Gooch admitted in deposition testimony in the towards BOC and Lutnick and would not do Delaware Litigation that he "wouldn't do business with them. business with" BOC. See Exhibit 6, Gooch

Deposition at 106:6-107:13.

As part of any transaction, the Individual Gooch confirmed at his deposition that "all Defendants, and JPT specifically, wanted to along, T have been most interested in keeping keep the Brokerage Business and take it the broker/dealer business and taking it private, private." Id. at 42:13-15.

An internal CME email stated that "if Mickey can't get the price that he wants at a structure that works for him, they will most likely keep the Trayport asset, maintain status quo as opposed to spinning off the asset separately." Internal email from CME employee Maya Rao to several other individuals at CME including John W. Pietrowicz (CME CFO), dated October 18, 2013 (attached hereto as Exhibit 12).

"It was a requirement in order to do the transaction, that we do the structure." Deposition of John W. Pietrowicz (of CME) (Dec. 12, 2014), at 41:22-42:4 (attached hereto as Exhibit 13).

"[Tin these particular set of circumstances we had two choices; to recommend the CME transaction which had the Executive Chairman's [Gooch] backing, and he was putting his shares behind that theory, that transaction, or to say no and he knew that."

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Deposition of Special Committee Member Marisa Cassoni at 156:9-13 (attached hereto as Exhibit 14).

ADDITIONAL SCIENTER ALLEGATIONS

93. As alleged herein, Defendants acted with scienter in that Defendants knew, or

recklessly disregarded, that the public documents and statements they issued and disseminated to

the investing public in the name of the Company or in their own name during the Class Period

were materially false and misleading. Defendants knowingly and substantially participated or

acquiesced in the issuance or dissemination of such statements and documents as primary

violations of the federal securities laws. Defendants, by virtue of their receipt of information

reflecting the true facts regarding GFI, their control over, and/or receipt and/or modification of

GFI's allegedly materially misleading misstatements, were active and culpable participants in the

fraudulent scheme alleged herein.

94. Defendants knew and/or recklessly disregarded the falsity and misleading nature

of the information that they caused to be disseminated to the investing public. The fraudulent

scheme described herein could not have been perpetrated during the Class Period without the

knowledge and complicity or, at least, the reckless disregard of the personnel at the highest

levels of the Company, including the Individual Defendants.

95. The Individual Defendants had the motive and opportunity to commit fraud. With

respect to opportunity, because of their positions with GFI, the Individual Defendants controlled

the contents of the Company's public statements during the Class Period. Each of the Individual

Defendants was provided with or had access to copies of the documents alleged herein to be false

and/or misleading prior to or shortly after their issuance and had the ability and opportunity to

prevent their issuance or cause them to be corrected. Given their positions and access to material

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non-public information, these Defendants knew or recklessly disregarded that the facts specified

herein had not been disclosed to, and were being concealed from, the public and that the

representations that were being made were false and misleading. As a result, the Individual

Defendants were responsible for the accuracy of OFT's corporate statements and are therefore

responsible and liable for the representations contained therein.

96. The scienter of Defendants is underscored by the Sarbanes-Oxley mandated

certifications of Defendant Heffron, which acknowledged his responsibility to investors for

establishing and maintaining controls to ensure that material information about OFT was made

known to them and that the Company's disclosure related controls were operating efficiently.

97. The Individual Defendants also possessed a motive to commit fraud. As detailed

herein, Defendants Gooch and Heffron wanted the Company to consummate the CME Deal to

allow them to take OFT's Brokerage Business private at a discounted price. In an effort to push

through their preferred transaction with CME, Defendants issued false and misleading statements

and failed to disclose other material information. Had the CME Deal gone through, Defendants

would have received a concrete and personal benefit in the form of the acquisition of the

Brokerage Business at a discounted price. This is not a motive common to all corporate insiders,

but, rather, a goal specific to these Individual Defendants, who sought to protect the CME Deal

that dramatically favored themselves, to the detriment of Lead Plaintiff and the proposed Class.

98. Furthermore, strong circumstantial evidence exists that the Individual Defendants

acted with conscious disregard or recklessness in their issuance of the false and misleading

misstatements and omissions identified herein. Indeed, Defendants knew, inter al/a, that: (i) OFT

had received offers or inquiries from third parties, other than CME, who were interested in

acquiring OFT, including, but not limited to, BOC; (ii) the bankers had been instructed to avoid

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certain competitors even though they were likely to offer a higher price; (iii) OFT had not

performed a market check; (iv) BOC had specifically contacted OFT on July 29, 2014, and over

the course of the several years prior, to express its interest in acquiring 100% of OFT; (v)

Defendant Gooch had personal animosity towards BOC and Lutnick; (vi) Defendants wanted to

keep the Brokerage Business for themselves by taking it private at a discount; (vii) Defendants

were predisposed to vote against any non-CME transaction; and (viii) CME's offer was

categorically not a "singular and unique opportunity to return value" to OFT shareholders.

Accordingly, Defendants engaged in deliberate illegal behavior and/or knew or should have

known that they were misrepresenting and omitting material facts.

LOSS CAUSATION/ECONOMIC LOSS

99. At all times relevant hereto, OFT traded on the NYSE, an open and efficient

market.

100. During the Class Period, as detailed herein, Defendants engaged in a scheme to

deceive the market and a course of conduct that artificially deflated the price of OFT common

stock and operated as a fraud or deceit on Class Period sellers of OFT common stock by failing to

disclose and misrepresenting the facts detailed herein.

101. As a result of their sales of OFT common stock during the Class Period, Lead

Plaintiff and the other Class members suffered economic loss, i.e., damages, under the federal

securities laws. Defendants' false and misleading statements caused OFT common stock to trade

at artificially low levels during the Class Period.

102. By misrepresenting and failing to disclose to investors the facts detailed herein,

Defendants presented a misleading picture of the value of OFT's common stock. When the truth

about the Company was revealed to the market, it became obvious that OFT was being sold to

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CME for far less money than the Company could have obtained for its shareholders.

Accordingly, Defendants' misconduct caused real economic loss to investors who had sold OFT

common stock during the Class Period.

103. The revelations regarding the price that OFT could have and should have obtained

for all of its shareholders made in the wake of OFT's decision to accept CME's inferior offer

demonstrated that as a direct result of the nature and extent of Defendants' fraudulent

misrepresentations, Lead Plaintiff and the other members of the Class sold their shares at a

substantial discount. The timing and magnitude of the price that OFT accepted for its

shareholders negate any inference that the loss suffered by Lead Plaintiff and the other Class

members was caused by changed market conditions, macroeconomic or industry factors, or

Company-specific facts unrelated to Defendants' fraudulent conduct. The economic loss, i.e.,

damages, suffered by Lead Plaintiff and the other Class members was a direct and proximate

result of Defendants' fraudulent scheme.

APPLICABILITY OF PRESUMPTION OF RELIANCE: FRAUD-ON-THE-MARKET DOCTRINE

104. At all relevant times, the market for OFT common stock was an efficient market

for the following reasons, among others:

(a) OFT's stock met the requirements for listing on, and was listed and

actively traded on the NYSE, a highly efficient, open, and automated market;

(b) as a regulated issuer, OFT filed periodic public reports with the SEC and

the NYSE;

(c) OFT regularly communicated with public investors via established market

communication mechanisms, including through regular disseminations of press releases

on the national circuits of major newswire services and through other wide-ranging

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public disclosures, such as communications with the financial press and other similar

reporting services; and

(d) OFT was followed by several securities analysts employed by major

brokerage firm(s) who wrote reports that were distributed to the sales force and certain

customers of their respective brokerage firm(s). Each of these reports was publicly

available and entered the public marketplace.

105. As a result of the foregoing, the market for OFT common stock promptly digested

current information regarding OFT from all publicly available sources and reflected such

information in the price of OFT common stock. Under these circumstances, all sellers of OFT

common stock during the Class Period suffered similar injury through their sales of OFT common

stock at artificially deflated prices, and a presumption of reliance applies.

NO SAFE HARBOR

106. The statutory safe harbor provided for forward-looking statements under certain

circumstances does not apply to any of the allegedly false statements pleaded in this Complaint.

Many of the specific statements pleaded herein were not identified as "forward-looking

statements" when made. To the extent there were any forward-looking statements, there were no

meaningful cautionary statements identifying important factors that could cause actual results to

differ materially from those in the purportedly forward-looking statements. Alternatively, to the

extent that the statutory safe harbor does apply to any forward-looking statements pleaded

herein, Defendants are liable for those false forward-looking statements because, at the time each

of those forward-looking statements was made, the particular speaker knew that the particular

forward-looking statement was false, and/or the forward-looking statement was authorized

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and/or approved by an executive officer of OFT who knew that the statement was false when

made.

COUNT T

Violation of §10(b) of the Exchange Act and Rule lOb-S

Promulgated Thereunder Against All Defendants

107. Lead Plaintiff repeats and realleges each and every allegation contained above as

if fully set forth herein.

108. During the Class Period, Defendants disseminated or approved the materially

false and misleading statements specified above, which they deliberately disregarded or knew

were misleading in that they contained misrepresentations and failed to disclose material facts

necessary in order to make the statements made, in light of the circumstances under which they

were made, not misleading.

109. Defendants: (a) employed devices, schemes, and artifices to defraud; (b) made

untrue statements of material fact and/or failed to state material facts necessary to make the

statements not misleading; and (c) engaged in acts, practices, and a course of business which

operated as a fraud and deceit upon the sellers of the Company's common stock during the Class

Period.

110. Lead Plaintiff and the Class have suffered damages in that, in reliance on the

integrity of the market, they sold their shares of OFT common stock at artificially low prices.

Lead Plaintiff and the Class would not have sold OFT common stock at the prices they did, if

they had been aware that the market prices had been artificially and falsely deflated by

Defendants' misleading statements, made to protect the deal Defendants personally favored.

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111. As a direct and proximate result of Defendants' wrongful conduct, Lead Plaintiff

and the other members of the Class suffered damages in connection with their sales of OFT

common stock during the Class Period.

COUNT TT

Violation of §20(a) of the Exchange Act the Individual Defendants

112. Lead Plaintiff repeats and realleges each and every allegation contained above as

if fully set forth herein.

113. The Individual Defendants acted as controlling persons of OFT within the

meaning of §20(a) of the Exchange Act as alleged herein. By virtue of their high-level positions,

and their ownership and contractual rights, participation in, and/or awareness of the Company's

operations and/or intimate knowledge of the discussions concerning the sale of the Company and

financial statements filed by the Company with the SEC and disseminated to the investing

public, the Individual Defendants had the power to influence and control and did influence and

control, directly or indirectly, the decision-making of the Company, including the content and

dissemination of the various statements that Lead Plaintiff contends are false and misleading.

The Individual Defendants were provided with, or had unlimited access to, copies of the

Company's reports, press releases, public filings, and other statements alleged by Lead Plaintiff

to be false or misleading prior to and/or shortly after these statements were issued and had the

ability to prevent the issuance of the statements or cause the statements to be corrected.

114. In particular, each of the Individual Defendants had direct and supervisory

involvement in the day-to-day operations of the Company and, therefore, is presumed to have

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had the power to control or influence the particular transactions giving rise to the securities

violations as alleged herein, and exercised the same.

115. As set forth above, OFT and the Individual Defendants each violated §10(b) and

Rule lob-S by their acts, statements, and omissions as alleged in this Complaint. By virtue of

their positions as controlling persons, the Individual Defendants are liable pursuant to §20(a) of

the Exchange Act. As a direct and proximate result of Defendants' wrongful conduct, Lead

Plaintiff and other members of the Class suffered damages in connection with their sales of OFT

common stock during the Class Period and revelation of the truth as alleged herein.

WHEREFORE, Lead Plaintiff prays for relief and judgment, as follows:

A. Determining that this action is a proper class action under Rule 23 of the Federal

Rules of Civil Procedure with Lead Plaintiff serving as class representative;

B. Awarding compensatory damages in favor of Lead Plaintiff and the other Class

members against all Defendants for all damages sustained as a result of Defendants' wrongdoing,

in an amount to be proven at trial, including pre- and post-judgment interest thereon;

C. Awarding Lead Plaintiff and the Class their reasonable costs and expenses

incurred in this action, including counsel fees and expert fees; and

D. Such other and further relief as the Court may deem just and proper.

JURY TRIAL DEMANDED

Lead Plaintiff hereby demands a trial by jury.

Dated: July 8, 2015 Respectfully submitted, SCOTT+SCOTT, ATTORNEYS AT LAW, LLP

/s/ Stephen I Teti David R. Scott Stephen J. Teti 156 South Main Street P.O. Box 192

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Colchester, CT 06415 Telephone: (860) 537-5537 Facsimile: (860) 537-4432 david.scott@scott -scott.com steti@scott-scott. com

Joseph P. Guglielmo SCOTT+SCOTT, ATTORNEYS AT LAW, LLP The Chrysler Building 405 Lexington Avenue, 40th Floor New York, New York 10174 Telephone: (212) 223-6444 Facsimile: (212) 223-6334 jguglielmoscott-scott.com

jcohen@scott- scott.com

Jack I. Zwick (JZ-2514) 100 Church Street, Suite 850 New York, New York 10007 Telephone: (212) 385-1900 Facsimile: (212) 385-1911

[email protected]

Lead Counsel for Lead Plaintiff

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CERTIFICATE OF SERVICE

I hereby certify that on July 8, 2015, I caused the foregoing to be electronically filed with

the Clerk of the Court using the CM/ECF system which will send notification of such filing to

the email addresses denoted on the Electronic Mail Notice List, and I hereby certify that I caused

the foregoing document or paper to be mailed via the United States Postal Service to the non-

CM/ECF participants indicated on the Manual Notice List.

/s/ Stephen J. Teti Stephen J. Teti 156 South Main Street P.O. Box 192 Colchester, Connecticut 06415 Telephone: (860) 537-5537 Facsimile: (860) 537-4432

steti@scott-scott. com

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Case 1:14-cv409438WHP Document 29 Filed 07/08/15 Page...

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