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Banks Win US Treasury Rigging Case Dismissal

 |  March 31, 2021

A US judge on Wednesday dismissed litigation accusing 10 large banks of conspiring to suppress competition in the now $21.2 trillion market for US Treasury securities, reported Reuters.

US District Judge Paul Gardephe in Manhattan ruled in long-running antitrust litigation by 21 pension, retirement and benefit funds, as well as unions, banks, individuals, and companies that traded in Treasuries.

The defendants included Bank of America, Barclays, BNP Paribas, Citigroup, Credit Suisse, Goldman Sachs, JPMorgan Chase, Morgan Stanley, NatWest Group and UBS, as well as trading platform operator Tradeweb Markets.

Traders said the banks, which from 2010 to 2014 handled an estimated 75% of Treasury trades through the Federal Reserve Bank of New York, used chat rooms and other means to swap confidential customer orders and coordinate strategies.

Traders alleged manipulation in the so-called “when-issued” market, or the period between when auction dates are announced and securities are delivered.

They also said seven banks conspired to boycott alternative platforms that offered “anonymous” trading and might help level the playing field.

But in a 53-page decision, Gardephe found no plausible direct evidence of an antitrust conspiracy, and said the plaintiffs’ statistical analyses were “no substitute” for evidence of individual or collective wrongdoing.

“Plaintiffs’ statistical analyses are at most a ‘plus factor,’” he wrote. “But plus factors alone are not sufficient; a plaintiff must also adequately allege parallel conduct. That Plaintiffs have not done.”

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