Nine major banks are settling a lawsuit that accuses them of conspiring to rig a $465.9 trillion market.
Attorneys representing investors have filed for preliminary approval of a $46 million cash settlement against JPMorgan Chase, Bank of America, Goldman Sachs, BNP Paribas, Citigroup, Deutsche Bank, Morgan Stanley, NatWest and UBS to end an eight-year-old antitrust suit.
Lawyers Representing the Public School Teachers’ Pension and Retirement Fund of Chicago, the Los Angeles County Employees Retirement Association and other institutional investors, say the banks have been conspiring for years to keep the interest rate swap market inefficient and antiquated in order to extract as much as possible in fees. Interest rate swaps allow two parties to trade interest cashflows for a given period of time.
The plaintiffs say that the interest rate swap market is clearly ready for fast efficient trading on electronic exchanges, but that the defendant banks have gone out of their way to make sure it only exists in an antiquated over-the-counter (OTC) market that they dominate.
According to lawyers, the banks have been using an electronic echange-like platform to trade the intruments themselves, but have barred investors and the public form using it.
If approved by U.S. District Judge Paul Oetken, each bank will settle the litigation for $46 million – though all the banks have denied wrongdoing.
In 2022, Credit Suisse – which has since collapsed and become part of UBS – agreed to pay $25 million to settle their end of the case.
Jeffrey Newman is a whistleblower lawyer, whose firm represents whistleblowers in healthcare fraud cases under the False Claims Act (FCA) and also under the Securities and Exchange, FINCEN and CFTC whistleblower programs. He can be reached at Jeff@JeffNewmanLaw.com or at 617-823-3217
