Type of Claim: Competition under article 101 Treaty on the Functioning of the European Union (TFEU)/US Opt-Out
Claim Period: 7January 2009 – 17 November 2017
Defendants: Bank of America; Credit Suisse; Goldman Sachs; JP Morgan; Morgan Stanley; UBS; EquiLend LLC; EquiLend Europe Limited
Jurisdiction: England / Southern District New York
Governing Law: English law / US federal laws
Limitation: To be determined
Opt-out Date: No opt-out deadline date has been set
The claim concerns the stock loan market. The allegations are that the six prime brokers (comprising some of defendants) conspired to keep technology out of the stock loan market to preserve its inefficient state. This allowed the six prime brokers collective market control dominance and to enjoy supra-competitive pricing. Several different technology companies developed and introduced technology to create a centrally cleared trading market for stock loan transactions. However, on each occasion, the prime brokers used their market dominance to boycott these companies, ultimately leading to these companies shutting down.
A lawsuit was filed in the Southern District of New York court in August 2017 (17-CV-06221) with an amended class action complaint filed on 17 November 2017. The defendants filed motions to dismiss, which were denied by the court on 27 September 2018. The claim has now moved to the discovery stage.
US anti-trust laws have jurisdictional restrictions. Therefore, for a client to be a member of the US class action, the client needs to have entered a stock loan transaction with one of the prime brokers in the United States.
Stewarts is continuing to investigate whether it is viable to bring an English claim on behalf of clients that transacted stock loan transactions outside the United States. Also, whether some clients might be better opting-out of the US class action in order to maximise their recovery.
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