August 17, 2017

Iowa's biggest public employee pension plan is among three plaintiffs suing some of the nation's largest investment banks, claiming the Wall Street giants have colluded to maintain exclusive control of the $1-trillion-plus stock loan market.

Together with the Orange County Employees Retirement System and the Sonoma County Employees Retirement Association, the Iowa Public Employees' Retirement System filed a federal class action suit Wednesday in the Southern District of New York.

Known as IPERS, the Iowa fund has more than 350,000 members, including state, city, county and school district employees, plus former Iowa public employees and retirees.

The lawsuit claims that six investment banks ― Bank of America, Credit Suisse, Goldman Sachs, JP Morgan, Morgan Stanley and UBS ― "took collective, illegal action to boycott, attack and acquire multiple entities who tried to increase competition and lower costs in the stock loan market." 

. . .

The suit contends that since at least 2009 the banks violated antitrust laws by conspiring to overcharge investors and obstructing efforts to create competitive electronic exchanges that would benefit stock lenders and borrowers.

. . .

Plaintiff's attorney Michael Eisenkraft said the banks have colluded to pocket higher profits, depriving "investors of money that should flow to retirees, families and other hard-working Americans."

"This retirement fund supports thousands of thousands of retirees. So anything that hurts the fund hurts them," Eisenkraft told the Register. "The pension funds are making money. They’re just not making as much money as they should because of this practice."

The full article can be accessed here.