Goldman, JPMorgan, four others must face stock lending antitrust case
- US Market
- 7 months ago
NEW YORK (Reuters) - A U.S. judge on Thursday ordered Goldman Sachs Group Inc (GS.N), JPMorgan Chase & Co (JPM.N) and four other large banks to face an antitrust lawsuit by investors who said they conspired to stifle competition in the nearly $2 trillion stock lending market.
U.S. District Judge Katherine Polk Failla in Manhattan rejected the banks’ arguments that the investors, led by several pension funds, made implausible allegations and sued too late, and that the defendants’ activity was reasonable.
The banks countered that the plaintiffs merely alleged that “continuing to execute stock loans under existing standards and rules” somehow amounted to an illegal conspiracy.
But in her 93-page decision, Failla found sufficient “direct evidence” from the plaintiffs to suggest an illegal conspiracy and let them continue their proposed class-action case.
“This dispute boils down to whether the allegations concern conduct by EquiLend alone, or conduct undertaken by the prime broker defendants using EquiLend,” Failla wrote. “The amended complaint adequately pleads that defendants’ concerted actions amounted to an unreasonable restraint on trade.”
Michael Eisenkraft, a lawyer for the plaintiffs, said in an email: “We are pleased with the judge’s ruling and look forward to prosecuting the case.”
The banks have four weeks to formally answer the complaint by the Iowa Public Employees’ Retirement System; California’s Los Angeles County Employees Retirement Association, Orange County Employees Retirement System and Sonoma County Employees’ Retirement Association; and Torus Capital LLC.
The case is Iowa Public Employees’ Retirement System v. Merrill Lynch, Pierce, Fenner & Smith Inc et al, U.S. District Court, Southern District of New York, No. 17-06221.
Source : Reuters