U.S. District Judge Paul Engelmayer of Manhattan ruled that 11 banks, including Bank of America Corp. (BAC) and JPMorgan Chase & Co. (JPM) must stand trial over investor claims that they colluded to rig the $275 trillion interest rate swap market.
A nationwide class action group was looking to be able to sue up to 12 banks for the alleged infraction. Investors seeking damages accuse the banks of colluding in order to maintain their 70% market share and boost profits by making trades more costly.
The complaint was led by the Public School Teachers' Pension and Retirement Fund of Chicago and the City of Baltimore.
“For far too long, the world's banking giants have shut investors out of electronic trading, and today's ruling is a critical victory in leveling the playing field. Interest rate swaps represent a multi-trillion-dollar market that traders across the world depend upon, and we will fight to ensure investors have access to the transparency, competitive pricing, and faster execution denied to them by the Defendant Banks,” Carol Gilden, a partner at Cohen Milstein, the law firm representing the plaintiffs, said in a statement.
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