August 17, 2017

Three U.S. pension funds sued six of the world's largest banks on Thursday, including Goldman Sachs Group Inc (GS.N) and JP Morgan Chase & Co (JPM.N), accusing them of conspiring to stifle competition in the more than $1 trillion stock lending market.

In the lawsuit filed in a Manhattan federal court, the funds accused the banks of boycotting start-up lending platforms by threatening and intimidating their potential clients. The defendants include Bank of America Corp (BAC.N), Credit Suisse AG CSAG.UL, Morgan Stanley (MS.N), UBS AG (UBSG.S), Goldman and JP Morgan.

The Iowa Public Employees' Retirement System, Orange County Employees' Retirement System and Sonoma County Employees' Retirement Association said in the lawsuit that the banks have cornered the market on stock lending in violation of federal antitrust law. 

“Through various improper means, the likes of Goldman Sachs and Morgan Stanley have for years colluded to maintain their power over this little-known-but-lucrative corner of Wall Street," said Michael Eisenkraft, a lawyer for the funds and partner with Cohen Milstein.

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