Three major public pension funds, including the Orange County Employees Retirement System, have sued a half-dozen Wall Street banks, alleging they illegally conspired to control a corner of the stock market, leading to higher charges for the funds and thus less money for retirees.
In a lawsuit filed Wednesday in U.S. District Court in New York, the funds allege Bank of America, Goldman Sachs, Credit Suisse, JPMorgan Chase, Morgan Stanley and UBS worked together since at least 2009 to “boycott, attack and acquire multiple entities” that tried to lower costs in the stock loan market.
That market is composed of institutions that lend stock to one another, a practice frequently employed by pension funds that allows for complicated financial transactions such as short selling and hedging.
Plaintiffs’ attorney Michael B. Eisenkraft, a partner at Cohen Milstein Sellers & Toll, said the banks for years have colluded to maintain “their power over this little-known-but-lucrative corner of Wall Street.”
“In doing so, they deprive investors of money that should flow to retirees, families and other hard-working Americans,” he said in a statement.
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