The Loomis matter is a Best Execution and Broker-Dealer Duty dispute between an institutional investment adviser and its executing broker over the execution of large institutional equity trades. On March 18, 2022—a quarterly “quadruple witching” expiration day of elevated liquidity—Loomis, Sayles & Company, L.P. (“Loomis”), acting for Loomis Sayles Trust Company, LLC (“LSTC”) and affiliated client accounts, engaged Citigroup Global Markets Inc. (“Citigroup”) to execute two waves of equity orders rebalancing its Growth Equity Strategies portfolios. Two orders were at issue (the “Affected Orders”): a sale of more than 5 million shares of Colgate-Palmolive Company (“CL”) and a purchase of more than 750,000 shares of Shopify, Inc. (“SHOP”). On September 2, 2025, the Court denied class certification, and the individual breach-of-contract claim remained set for trial.
Loomis alleged that Citigroup breached contractual and fiduciary duties of best execution by placing the full quantity of the Affected Orders into the New York Stock Exchange closing auction as market-on-close (“MOC”) orders. It alleged that Citigroup performed no meaningful liquidity or order-imbalance analysis, allowed the orders to dominate the auction, and caused artificial price dislocation and substantial aggregate losses, with SHOP shares purchased at inflated prices and CL shares sold at depressed prices. Loomis further alleged that Citigroup retained discretion to pursue lower-impact execution strategies, including limit-on-close (“LOC”) orders, executing a portion of the orders over the trading day, or reducing or cancelling the orders before the 3:50 p.m. deadline.
The principal economic issues involved market microstructure and price impact—specifically, whether the closing auction could absorb the full size of the Affected Orders without materially affecting the execution price in light of the published order imbalances and the securities’ average daily volume. Quantifying damages required isolating the price dislocation attributable to Citigroup’s order placement from contemporaneous market movement on a high-volume expiration day and estimating the counterfactual proceeds the orders would have achieved under an alternative execution strategy.
Professor Mark Zmijewski, supported by Renee McMahon and Zawadi Lemayian, served as Loomis’s damages expert. His assignment was to quantify the loss suffered by plaintiff and the corresponding damages required to restore the plaintiffs to the financial position they would have occupied but-for Citigroup’s alleged breaches. The plaintiffs’ damages equaled the difference between those but-for amounts and the prices actually obtained. The parties settled shortly before trial.