Judge Dismisses Antitrust Case Against Major Banks Over Bond Pricing

The case, filed by investors, alleged that Bank of America, Barclays, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan Chase, Morgan Stanley, NatWest and Wells Fargo colluded to overcharge clients on so-called “odd-lot” bond trades, which typically involve fewer than 1,000 bonds or transactions valued at under $1 million. These trades make up the majority of corporate bond activity. Investors claimed the banks charged spreads up to 300% higher than those applied to larger transactions, per Reuters.

U.S. District Judge Valerie Caproni in Manhattan ruled that the plaintiffs had not proven that the banks worked together to manipulate trading platforms or to shut out competitors offering fairer pricing. She noted that although the institutions accounted for roughly 65% of underwriting and 90% of trading in corporate bonds, this alone did not establish control over secondary market pricing. Caproni also found no evidence of illegal activity in the four years preceding the April 2020 filing, a gap that undermined the case under the Sherman Antitrust Act.

Read more: Benefits and Challenges of Open Banking

The dismissal was issued with prejudice, meaning the lawsuit cannot be refiled. Attorneys representing the investors did not immediately comment on the ruling, according to Reuters.

The case had a complicated history. It was first dismissed in October 2021 by Judge Lewis Liman. Months later, his clerk revealed that Liman’s wife owned shares in Bank of America while the case was pending. Though the appeals court later found the conflict likely unintentional, it revived the lawsuit in July 2024, saying the judge’s impartiality could reasonably be questioned. Liman was never accused of misconduct.

The case is titled Litovich v. Bank of America Corp. et al., in the Southern District of New York, No. 20-03154.

Source: Reuters