August 01, 2017

A US District Court judge has given the go-ahead for investors to pursue partial claims against some of Wall Street's largest banks over allegations they conspired to limit competition in the US$368trn over-the-counter interest rate derivatives market. 

In the class action lawsuit originally brought by the Public School Teachers’ Pension and Retirement Fund of Chicago, Judge Paul Engelmayer, for the US District Court in Manhattan, upheld antitrust claims relating to events between 2013 and 2016, while claims relating to the period 2007 to 2012 were dismissed against all defendants. 

The suit alleges that investors were subject to unfavourable pricing in the interest rate swap market as a result of dealers conspiring to block the development of electronic exchange-based platforms. A second group of plaintiffs led by start-up platform providers Javelin Capital Markets and Tera Group, allege that dealers conspired to boycott and undermine platforms that would have supplied investors with more competitive IRS prices. 

“For far too long, the world’s banking giants have shut investors out of electronic trading, and the ruling is a critical victory in levelling the playing field,” said Carol Gilden, a partner at Cohen Milstein Sellers & Toll, representing the Chicago Teachers Pension Fund. 

“We will fight to ensure investors have access to the transparency, competitive pricing, and faster execution denied to them by the defendant banks.” 

Cohen Milstein is co-lead counsel for the plaintiffs alongside Quinn Emanuel Urquhart & Sullivan.

The full article can be viewed here.