Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Banks that purchased or sold credit default swaps hit with Sherman Act class action, (Jul 18, 2013)
Law Firms Mentioned:Entwistle & Cappucci LLP
Organizations Mentioned:Bank of America | Bank of America Corporation | Citigroup | Citigroup, Inc. | Entwistle & Cappucci, LLP | Goldman Sachs Group, Inc. | HSBC Bank USA, N.A. | HSBC Bank USA, NA | HSBC Holdings PLC | HSBC Holdings Plc. | JPMorgan Chase | JPMorgan Chase & Co. | Markit Group, Ltd. | The Goldman Sachs Group, Inc. | Value Recovery Fund LLC
By Peter Reap, J.D., LL.M.
Value Recovery Fund LLC, individually and on behalf of a class, has filed a lawsuit in the federal district court in New York City against several “dealer Banks” on behalf of all persons and entities who purchased or sold credit default swaps (“CDS”) directly from or to the Dealer Bank defendants in the United States, or for delivery in the United States, from January 1, 2008, until such time as the alleged illegal conduct ceased. The complaint charges that the Dealer Banks violated Section 1 of the Sherman Act by virtue of a continuing agreement by the Dealer Banks to fix, raise, maintain, or stabilize the spreads of CDS traded on the over-the-counter market.
The Dealer Banks named as defendants in the action are JPMorgan Chase & Co., Citigroup, Inc., The Goldman Sachs Group, Inc., HSBC Holdings Plc., HSBC Bank USA, N.A., Bank of America Corporation, and Markit Group, Ltd.
According to the complaint, the defendant Dealer Banks were the dominant dealers of CDS in the United States during the class period. Their share of CDS trading conducted within the United States ranged from approximately 97% in 2008 to over 99.6% by the first quarter of 2013.
The Dealer Bank defendants held and continue to hold monopoly power over the trading of CDS in the United States, the suit alleges. Moreover, the defendants agreed among themselves to restrain trade and preserve their collusive control over CDS trading in the United States for the purpose of maintaining artificially wide spreads between purchase and sale prices for CDS and ensuring their continued control over the U.S. CDS trading market.
The complaint requests permanent injunctive relief restraining the defendants from continuing their illegal conduct, damages, and attorney fees.
The complaint in Value Recovery Fund LLC v. JPMorgan Chase & Co., Case No. 13 CIV 4928, was filed July 16, 2013.
Attorneys: Vincent R. Cappucci (Entwistle & Cappucci LLP) for Value Recovery Fund LLC.
Companies: Value Recovery Fund LLC; JPMorgan Chase & Co.; Citigroup, Inc.; The Goldman Sachs Group, Inc.; HSBC Holdings Plc.; HSBC Bank USA, N.A.; Bank of America Corporation; Markit Group, Ltd.
News: Antitrust NewYorkNews