Labaton Sucharow and Hausfeld File First Nationwide Class Action Alleging Global Conspiracy in $9 Trillion SSA Bond Market
Wrongdoing unearthed involving collusion among same prominent financial institutions tied to numerous other commodities and financial benchmark manipulation scandals
NEW YORK (May 18, 2016) – Labaton Sucharow LLP and Hausfeld LLP, on behalf of Boston Retirement System, jointly filed today the first nationwide class action alleging a global conspiracy between 2005 and 2014 to manipulate trading in supranational, sub-sovereign, and agency bonds (SSA bonds). Named defendants include some of the world’s largest dealer banks—Bank of America, Deutsche Bank, Credit Suisse, Crédit Agricole, and Nomura International. SSA bonds are debt instruments issued by a sovereign country’s political subdivisions and administrative bodies used to fund critical government operations.
Gregory Asciolla, Co-Chair of Labaton Sucharow’s Antitrust and Competition Litigation Practice, remarked, “Once again many of the same global banks implicated in numerous other price-fixing conspiracies of complex financial products are up to their same old tricks in the $9 trillion SSA bond market. Similar to allegations in the LIBOR and foreign exchange antitrust price-fixing cases, the banks agreed to fix prices for SSA bonds by various means, including exchanging confidential customer information, trading habits, and order sizes via electronic chatrooms, where traders were able to both hide and police their conspiracy.”
The plaintiff alleges that traders at the dealer banks exchanged confidential information about their customers’ identities, trading habits, and order sizes, which enabled them to collude to fix bid and ask spreads offered to customers in the secondary market—most of which are state and local governments, institutional and individual investors, pension funds, mutual funds, hedge funds, and insurance companies.
The defendants’ conduct in the SSA bond market has also caught the attention of antitrust enforcement agencies worldwide. In December 2015, the U.S. Department of Justice launched an investigation into London-based traders of SSA bonds. Additional probes by the UK’s Financial Conduct Authority and the European Commission soon followed.