Big banks defeat antitrust lawsuit in US over bond – Business News
A federal choose on Tuesday dismissed an antitrust lawsuit accusing 10 giant banks of conspiring to rig company bond costs on the expense of atypical traders, after the unique choose recused himself as a result of his spouse owned stock in one of the banks.
Investors accused Bank of America, Barclays, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan Chase, Morgan Stanley, NatWest, and Wells Fargo of overcharging them by billions of {dollars} since 2006 on “odd-lot” trades.
Such trades contain fewer than 1,000 bonds or are value much less than $1 million, and comprise most company bond trades. Investors stated the banks illegally charged spreads 25% to 300% larger than on bigger “round-lot” trades, inflating earnings.
JPMorgan Chase was one of 10 banks that had been accused of overcharging traders by billions of {dollars} since 2006 on “odd-lot” trades. Christopher Sadowski
US District Judge Valerie Caproni in Manhattan stated the traders did not show the banks conspired to operate the Bond Desk, Trading Edge and Trade Web platforms as a “catch-and-kill” operation to thwart honest costs, whereas boycotting rival platforms that promoted honest costs.
Though the banks managed an estimated 65% of U.S. underwriting and 90% of US trading quantity in company bonds, “it does not follow that defendants have the power to control pricing of the bonds in the secondary market,” Caproni stated.
The choose additionally discovered no overt acts by the banks to advance the alleged conspiracy in the 4 years earlier than the lawsuit was filed in April 2020, dooming the Sherman Act case.
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Lawyers for the traders didn’t instantly reply to requests for remark. Caproni’s dismissal is with prejudice, that means the case can’t be introduced again.
A federal choose additionally discovered no overt acts by banks, together with Barclays, to advance the alleged conspiracy in the 4 years earlier than the lawsuit was filed in 2020, dooming the Sherman Act case. REUTERS
The case was initially dismissed by US District Judge Lewis Liman in October 2021.
Four months later, Liman’s clerk disclosed that the choose’s spouse owned Bank of America stock whereas the case was pending, however it didn’t have an effect on the choose’s determination making.
In July 2024, the federal appeals court docket in Manhattan revived the case, saying Liman’s battle was “almost certainly” unknowing however might call his impartiality into query.
Liman was not accused of wrongdoing.
The case is Litovich v Bank of America Corp et al, U.S. District Court, Southern District of New York, No. 20-03154.
