A New York federal judge on Wednesday appointed three BigLaw firms to serve as lead counsel in multitrillion-dollar litigation accusing Goldman Sachs Group Inc., Barclays Capital Inc. and 18 other financial giants of rigging the $13 trillion market for securities sold by the U.S. Department of the Treasury.
Quinn Emanuel Urquhart & Sullivan LLP, Cohen Milstein Sellers & Toll PLLC and Labaton Sucharow LLP will lead class actions that have been centralized in New York's Southern District before U.S. District Judge Paul G. Gardephe. To date, more than 48 putative class action complaints have been filed that allege banks conspired to manipulate auction prices in order to boost their own profits, according to a statement from the law firms.
Quinn Emanuel partner Faith Gay said Wednesday the firm is honored that it's been selected to co-lead the litigation.
Labaton Sucharow partner Jay Himes added that it's important that Treasury securities are priced fairly for both pension funds who invest in them and the Treasury Department, which uses the proceeds to finance government operations.
Cohen Milstein Sellers & Toll managing partner Steven J. Toll also said Wednesday that the American Treasury market is one of the deepest and most trusted securities markets in the world.
"No institution should be in a position to rig the system in order to increase profits," Toll said in a statement.
The counsel appointment is the latest development in a string of class action lawsuits brought by pension funds and other institutional investors alleging misconduct in Treasury bond auctions.
The U.S. Treasury borrows money by selling various debt instruments, known as Treasury bonds or Treasury securities. These sales take place in market auctions conducted throughout the year, and a select group of banks — known as primary dealers — bids in the auctions.
But the cases accuse Goldman, Barclays and other financial players of conspiring to buy securities from the Treasury Department at artificially low prices and then selling them at artificially high prices, according to the judge's order. The class period generally begins in 2007 or 2008 and ends in 2012, the order says.
Treasury bonds, which are backed by the federal government, are considered by many as the world's safest investment, according to the statement from the firms.
Faith Gay, Daniel Brockett, Steig Olson, Sascha Rand and Christine Chung are handling the case for Quinn Emanuel Urquhart & Sullivan LLP. J. Douglas Richards, Steven J. Toll, Michael B. Eisenkraft and Carol V. Gilden are handling it for Cohen Milstein Sellers & Toll PLLC. Jay Himes and Greg Asciolla are working the case for Labaton Sucharow LLP.
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