Manipulation Monitor

Benchmark Rate Manipulation / Manipulation Monitor

SIBOR Claims Dismissed for Lack of Standing

LAW 360 (subscription required) reports that a suit in the S.D.N.Y. against various banks alleging manipulation of the Singapore Interbank Offered Rate (“SIBOR”) has been dismissed by U.S. District Judge Alvin K. Hellerstein on grounds related to Plaintiff Fund Liquidation Holdings LLC’s standing. Specifically, Judge Hellerstein found that an agreement between the Plaintiff and FrontPoint Asian Event Driven Fund Ltd. and Sonterra Capital Master Fund Ltd. (together, “FrontPoint”) (who originally filed the suit) only assigned claims related to securities-related suits, not antitrust claims like those under the Sherman Act brought by the Plaintiff. The Court also denied a motion to approve a $21 million settlement agreement proposed by CitiGroup and JPMorganChase on the grounds that Plaintiff’s lack of standing meant that the Court did not have subject matter jurisdiction to approve the settlement. Continue reading SIBOR Claims Dismissed for Lack of Standing

Manipulation Monitor / Market Index Manipulation

Chicago Board Options Exchange Dismissed From VIX Manipulation Lawsuit

Wall Street Journal are reporting that an Illinois Federal judge has dismissed claims against Cboe Global Markets Inc. arising out of alleged manipulation of the CBOE’s VIX volatility index. Judge Manish Shah held that common-law negligence claims were preempted by federal law, and that the plaintiffs had failed to plead violations of federal anti-trust and securities laws by the exchange itself. Leave to replead the federal claims was granted. Continue reading Chicago Board Options Exchange Dismissed From VIX Manipulation Lawsuit

Foreign Exchange Market Manipulation / Manipulation Monitor

Four Bank Defendants Dismissed From S.D.N.Y. ForEx Lawsuit

LAW 360 (subscription required) reports that four bank defendants–UBS Group AG, SocGen, RBS PLC, and MUFG Bank, Ltd.–have been dismissed from a pending foreign exchange bid-rigging action in the S.D.N.Y. District Judge Lorna Schofield dismissed UBS Group AG because the complaint did not allege that it had participated in the alleged manipulation activity, and that the plaintiffs had conflated it with other UBS entities. SocGen, RBS, and MUFG Bank were all dismissed for lack of personal jurisdiction, on the grounds that none of their conduct was directed at New York such that they could “reasonably anticipate being haled into court” in New York. The action, Contant v. Bank of America, remains pending against other defendants, including Barclays, BNP Paribas, HSBC, Standard Chartered, and UBS AG. Continue reading Four Bank Defendants Dismissed From S.D.N.Y. ForEx Lawsuit

Foreign Exchange Market Manipulation / Manipulation Monitor

E.U. Hands Down $1.2 Billion Fine For Rigging ForEx Markets

Today, CNBC, Reuters, and the E.U. itself itself are reporting that the European Commission has fined Barclays, Citigroup, J.P. Morgan, MUFG, and Royal Bank of Scotland a total of 1.07 billion Euro ($1.2 billion) for rigging the spot foreign exchange market for 11 currencies. The bid-rigging was carried out by traders from the various banks communicating with each other over Bloomberg terminals. The fines covered two separate schemes, one taking place between 2007 and 2013, and the other between 2009 and 2012. UBS received immunity because it had reported the bid-rigging schemes to the Commission, thereby avoiding a fine of 285 million Euro. Continue reading E.U. Hands Down $1.2 Billion Fine For Rigging ForEx Markets

Manipulation Monitor / Market Index Manipulation

The VIX is Fixed?! Plaintiffs Think Their Charges Should Stick

We’re back for another installment of the most-fun-to-name series of posts the Manipulation Monitor has to offer. Last time around, we reviewed Defendant’s valiant efforts to rid the world – or, at least, the Northern District of Illinois – of the scourge of VIX-related claims. Continue reading The VIX is Fixed?! Plaintiffs Think Their Charges Should Stick

Government Bond Market Manipulation / Manipulation Monitor

Lawsuits Filed Over Eurozone Bond Bid-Ask Rigging

On March 22, 2019, the Ohio Carpenters’ Pension Fund filed a proposed antitrust class action in the Southern District of New York. The complaint alleges that Bank of America and NatWest (f/k/a RBS) conspired to rig the bid-ask spreads of Eurozone government bonds between 2007 and 2012. The complaint specifically alleges that the defendants were (nominally) competing “primary dealers” for the sale of the bonds to investors, but that they colluded to increase their bid-ask spread collectively in order to avoid competitive disadvantage and potential loss of the issuers’ business. Continue reading Lawsuits Filed Over Eurozone Bond Bid-Ask Rigging

Commodities Market Manipulation / Manipulation Monitor

Forthcoming Mandamus Petition in Gold Fixing Antitrust Case Puts Discoverability of Plaintiffs’ Statistical Market Analyses at Center Stage

When the emergence of big data and supercomputing drew complex statistical analyses—event studies, regression analyses, ANOVA methods and the like—out of the classroom and into the marketplace, those paying attention knew that courtrooms would not be far behind. Today, these complex statistical analyses give market-watchers (potential Plaintiffs) unparalleled ability to identify unnatural market movement and ferret out manipulation. When incorporated into a complaint, these analyses—and the reasonable inferences drawn therefrom—allow market manipulation cases to clear the motion to dismiss stage and progress to discovery, where the machinations behind those unnatural movements are (theoretically) laid bare. Continue reading Forthcoming Mandamus Petition in Gold Fixing Antitrust Case Puts Discoverability of Plaintiffs’ Statistical Market Analyses at Center Stage

Government Bond Market Manipulation / Manipulation Monitor

SOS to GSEs: Your Bonds are A Beautiful Mess

You know what else is new to these parts? Government-Sponsored Enterprises! Yes friends, this is the start of a brand-new miniseries here on the Manipulation Monitor. In this series, I’ll be tracking the ins and outs of several new litigations against the “usual customers” (read: the big banks), this time in their roles as horizontal competitors and dominant dealers of bonds issued by Government-Sponsored Enterprises, or GSEs. Complaints to date include the following: Continue reading SOS to GSEs: Your Bonds are A Beautiful Mess

Government Bond Market Manipulation / Manipulation Monitor

Antitrust Suit Alleges That Major Banks Colluded To Manipulate Prices Of Fannie & Freddie Bonds Between 2009 And 2014

On February 22, 2019, the City of Birmingham’s pension fund and various other benefit funds filed a proposed antitrust class action in the Southern District of New York. The complaint alleges that a number of major banks–Bank of America, Barclays, BNP Paribas, Credit Suisse, Merrill Lynch, Citigroup, Goldman Sachs, and Deutsche Bank, among others–conspired to manipulate the secondary market for unsecured bonds issued by Fannie Mae and Freddie Mac between 2009 and 2014. The defendants are the largest dealers in the $550 billion over-the-counter secondary markets, and the complaint alleges that they colluded among themselves to inflate the prices of bonds they sold and to deflate the prices of bonds they repurchased from investors, including the institutional investors who are the lead plaintiffs. Interestingly, the complaint relies on the fact that the bid-ask prices changed dramatically in April 2014 after the banks came under additional scrutiny due to the LIBOR manipulation scandal. The complaint also alleges that this conduct is the subject of an ongoing Department of Justice investigation. The SDNY antitrust action is before Judge Jed Rakoff. Continue reading Antitrust Suit Alleges That Major Banks Colluded To Manipulate Prices Of Fannie & Freddie Bonds Between 2009 And 2014

Government Bond Market Manipulation / Manipulation Monitor

City of Philadelphia Files Anti-Trust Class Action Arising From Whistleblower Allegations That Banks Fixed VRDO Interest Rates

Last week, the City of Philadelphia filed a proposed antitrust class action in the Southern District of New York. The action alleges that a number of major banks–Bank of America, Merrill Lynch, Citibank, Goldman Sachs etc.–conspired to artificially inflate the interest rates for a type of tax-free municipal bonds called Variable Rate Demand Obligations (VRDOs). Continue reading City of Philadelphia Files Anti-Trust Class Action Arising From Whistleblower Allegations That Banks Fixed VRDO Interest Rates

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