Settled: Pending Court Approval
Labaton Sucharow serves on the Executive Committee in this lawsuit filed on behalf of a proposed class of plaintiffs that purchased municipal derivatives directly from defendants, 37 leading banks, insurance companies, and brokers.
Plaintiffs allege that, between January 1, 1992, and August 18, 2011, defendants engaged in a widespread price-fixing and bid-rigging conspiracy in the multibillion dollar municipal derivatives industry. The case is pending before the Honorable Victor Marrero in the Southern District of New York.
The lawsuit follows an unprecedented investigation by the United States Department of Justice's Antitrust Division, the Internal Revenue Service, the Securities and Exchange Commission, and various State Attorneys Generals into industry-wide collusive practices in the municipal bond industry. The Antitrust Division has convened a grand jury in the United States District Court for the Southern District of New York. One defendant, Bank of America, has already applied for acceptance into the Antitrust Division's amnesty program. In connection with this program, Bank of America has agreed to provide information regarding the conspiracy and to provide full and complete cooperation.
The court denied defendants' motion to dismiss plaintiffs' Consolidated Amended Complaint on March 25, 2010.
The class has entered into a number of settlements. So far the class has settled with Morgan Stanley, Wachovia Bank, N.A., n/k/a Wells Fargo Bank, N.A., Wells Fargo & Company, and JPMorgan Securities. The Morgan Stanley ($6.5 million), Wachovia/Wells Fargo ($37 million), JPMorgan ($44.57 million), Bank of America ($20.5 million), and Trinity Funding Co., LLC, Trinity Plus Funding Co., LLC, and GE Funding Capital Market Services, Inc. (collectively "GE" for $18.05 million) settlements were granted final approval by the court.
For the remaining defendants, discovery is ongoing.