Antitrust Law Daily Wrap Up, ANTITRUST NEWS: GE offers $18.25 million to settle municipal bond bid rigging suit, (Dec 9, 2013)

By Jeffrey May, J.D.

General Electric Co. affiliates (GE) are the latest financial institutions to offer to settle a putative antitrust class action lawsuit brought on behalf of municipalities and other purchasers of municipal derivatives. The complaining purchasers allege that GE and more than 40 other corporate defendants illegally rigged bids and fixed prices in the municipal derivatives market. The private suits track federal and state investigations into anticompetitive conduct in the industry (In re: Municipal Derivatives Antitrust Litigation, Case No. 08-02516).

GE agreed to pay a settlement amount of up to approximately $18.25 million in exchange for dismissal of claims by the class against GE in the litigation, according to December 6 court filing. The plaintiffs and GE have moved for the federal district court in New York City to grant preliminary approval of the settlement and to certify a settlement class. This settlement would be in addition to GE’s $30 million settlement with state attorneys general for the same alleged conduct.

Days earlier, Bank of America agreed to pay approximately $20 million to settle the five-year-old private litigation. Bank of America has cooperated with the government in the investigation and provided assistance to the proposed class. It does not face the same risk of treble damages and joint and several liability as other defendants, according to a December 4 court filing. Bank of America has, however, agreed to a separate settlement with state attorneys general valued at approximately $62.5 million.

These latest proposed settlements in the private action follow earlier settlements with Morgan Stanley, JPMorgan, and Wachovia/Wells Fargo. To settle the class action, Morgan Stanley agreed to pay $6.5 million, Wachovia agreed to pay $37 million, and JPMorgan agreed to pay $44.575 million. Morgan Stanley’s settlement was approved in 2011. The settlements with JPMorgan and Wachovia were approved by the court in 2012.

The case is Case 1:08-cv-02516-VM-GWG.

Attorneys: Michael D. Hausfeld (Hausfeld LLP) for plaintiffs.

Companies: Bank of America, N.A.; GE Funding Capital Market Services, Inc.

News: Antitrust