Current Cases

In re Interest Rate Swaps Antitrust Litigation

Status Current Case

Practice area Securities Litigation & Investor Protection Antitrust

Court U.S. District Court, Southern District of New York

Case number 1:16-md-02704


On February 11, 2022, Cohen Milstein and Quinn Emanuel Urquhart & Sullivan filed a motion for preliminary approval of a $25 million cash settlement against Credit Suisse, one of 12 defendants, in In re Interest Rate Swaps Antitrust Litigation, before the Honorable J. Paul Oetken of the United States District Court for the Southern District of New York. Co-counsel are still awaiting the court’s decision on class certification, which was filed in February 2019 and briefed in January 2020.

Cohen Milstein, as Interim Co-Lead Counsel, represents the Public School Teachers’ Pension and Retirement Fund of Chicago, the Los Angeles County Employees Retirement Association, and other institutional investors in this groundbreaking anticompetitive market manipulation class action, in which plaintiffs allege that 12 Wall Street banks, including J.P. Morgan Chase & Co, Citigroup, Goldman Sachs, Credit Suisse, Bank of America, with conspiring to engineer and maintain a collusive and anti-competitive stranglehold over the interest rate swaps (IRS) market – one of the world’s biggest financial markets – in violation of federal antitrust laws.

On August 3, 2016, Cohen Milstein Sellers & Toll PLLC was court appointed Interim Co-Lead Counsel.

This case was developed by Cohen Milstein and co-counsel independently, without the assistance or benefit of any preceding government investigation or enforcement action.

Case Background

The Public School Teachers’ Pension and Retirement Fund of Chicago filed a lawsuit in federal court, represented by Cohen Milstein Sellers & Toll PLLC and Quinn Emanuel Urquhart & Sullivan, LLP, to seek an injunction to put an end to this anti-competitive arrangement, and damages to compensate them for the injuries they suffered.

The “Dealer Defendant” banks include Bank of America, Barclays, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan, the Royal Bank of Scotland, and UBS.

Interest rate swaps, which are regularly used by a broad spectrum of investors, including pension funds, university endowment funds, hedge funds, and municipalities, allow an entity to swap its fixed interest-rate payments for the floating interest-rate payments of a benchmark, or vice-versa. Given their daily use across the financial industry, interest rates swaps are a critical, multi-trillion dollar market which investors depend upon.

According to the complaint filed on November 25, 2015 before the Honorable Paul Engelmayer of the United States District Court for the Southern District of New York, interest rate swaps have been standardized and ripe for exchange trading for years. Exchange trading brings transparent and competitive pricing and faster execution to a market, thus bringing significant benefits to investors. For instance, when foreign exchange trading started to move to electronic trading platforms recently, the bid/offer spread for certain currency transactions declined by over 50 percent.

As alleged in the complaint, despite the market for interest rate swaps being economically ready for standardized exchange trading, investors remain stuck trading IRS in an inefficient and antiquated market dominated by the Dealer Defendants. By blocking the entry of exchanges into the IRS market, the Dealer Defendants Dealers force investors to trade with them in an opaque and inefficient over-the-counter market which allows the Dealer Defendants to extract billions of dollars in higher fees and costs, year after year, from the class members in this case. The Dealer Defendants maintained this profit center by conspiring to squash every potential market entrant that threatened to bring competition and transparency to the buy-side in the IRS market. Since at least 2007, as detailed in the complaint, the Dealer Defendants have jointly threatened, boycotted, coerced, and otherwise eliminated any entity or practice that had the potential to bring exchange trading to investors in the IRS market.

Ironically, the Dealer Defendants themselves trade IRS with each other on electronic, exchange-like platforms, but they bar investors from these platforms. According to Carol V. Gilden, a Partner at Cohen Milstein, “These banks have used strong-arm tactics to stifle competition to the detriment of interest rate swaps investors, such as the Chicago Teachers Pension Fund. It is time to stand up to these tactics and put a stop to them.”

Cohen Milstein is no stranger to protecting investors in the financial industry, having recovered well over a $1.5 billion for investors over the last few years in lawsuits against major banks for securities violations with respect to mortgage-backed securities.

Key Dates:

  • November 25, 2015, Cohen Milstein Sellers & Toll PLLC and Quinn Emanuel Urquhart & Sullivan, LLP filed this groundbreaking putative class action lawsuit.
  • August 3, 2016, Cohen Milstein Sellers & Toll PLLC and Quinn Emanuel Urquhart & Sullivan were appointed Interim Co-Lead Counsel.
  • July 28, 2017, U.S. District Judge Paul Engelmayer issued a ruling allowing a majority of the plaintiffs’ claims to proceed against 11 ‘dealer defendant’ banks.
  • February 21, 2019, Plaintiffs filed for class certification.
  • February 11, 2022, Plaintiffs filed a motion for preliminary settlement.