August 17, 2017

A group of public pension funds on Thursday sued Bank of America Corp., JPMorgan Chase & Co., Goldman Sachs Group Inc. and two other big banks alleging that they colluded to prevent modernization of the $1.7 trillion stock loan market to prevent losing out on massive fees.

The Iowa Public Employees’ Retirement System and two California public pension funds — the Orange County Employees Retirement System and Sonoma County Employees Retirement Association — allege in a complaint filed in federal district court in Manhattan that the six banks and a trading platform they control moved to block several market entrants that would have made changes to stock lending that would have lowered costs and potentially cut the banks out of the market.

“Major investment banks are conspiring to preserve their profits at the expense of everyday investors,” Michael B. Eisenkraft, a partner at Cohen Milstein Sellers & Toll PLLC who is representing the plaintiffs, said in a statement.

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