Fannie Mae Bond-Fixing Suit To Proceed Against Goldman Sachs And Others

The New York Times is reporting (via Reuters) that Judge Jed Rakoff of the United States District Court for the Southern District of New York has ruled that an anti-trust action alleging price-fixing of Fannie Mae and Freddie Mac bonds can proceed against Goldman Sachs, Deutsche Bank, BNP Paribas, Morgan Stanley, and Merrill Lynch. Judge Rakoff’s decision was based upon chat-room evidence of coordination he described as “direct” and “smoking gun.” Eleven other banks that were not implicated in the chats were dismissed, including TD Bank, Barclays, and Citigroup, but the plaintiffs have been given an opportunity to plead additional facts to bring them back into the action.