The American Securities Association filed a motion and proposed friend-of-the-court brief on November 10, asking a federal court to consider potential retail-investor harm and halt US single-stock perpetuals while a challenge to their approval proceeds. ASA announced the filing on November 12. Its warnings about losses from leverage, forced liquidation and trading in thinner sessions are arguments, not findings that such harm has occurred. The filing does not grant a halt or settle the contracts’ legal status.
In a November 3 ruling, Judge Valerie Caproni denied emergency relief because the plaintiff had not shown imminent, irreparable harm, although she considered its statutory-authority argument likely to succeed at that stage. The CFTC, by contrast, has argued that the products offer a regulated domestic alternative to offshore trading. The court has yet to decide what weight to give ASA’s submission or whether to grant interim relief.
