Pension plans accuse banks of anti-competitive behaviour
18 August 2017 New York
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Three US pension plans have accused six of securities lending鈥檚 biggest banks of blocking nascent platforms and keeping the market for themselves.
The Iowa Public Employees鈥� Retirement System, Orange County Employees Retirement System and Sonoma County Employees鈥� Retirement Association filed an anti-trust class action in the US Southern District Court of New York on 16 August and called for treble damages and injunctive relief.
The pension plans alleged that 鈥渉aving formed EquiLend, the prime broker defendants made it clear to market participants that all new entrants into the market would need to go through EquiLend鈥�.
Alleged systematic suppression of free market development by the defendants, which include Morgan Stanley, J.P. Morgan, Bank of America, Credit Suisse, and UBS, occurred between 2009 and 2016.
According to the complaint, the defendants aimed to maintain high fees for their stock loan services by boycotting start-up lending platforms and threatening clients to do the same.
The complaint continued: 鈥淩ecognising the nascent threat posed by all-to-all electronic trading, the prime broker defendants took steps to organise themselves into a working cartel. Their first step was to form a 鈥榙ealer consortium鈥� to protect their mutual interests.鈥�
One such platform was Quadriserv鈥檚 Automated Equity 麻豆影视传媒 Markets, commonly known as AQS, according to the pension plans.
EquiLend, which launched in 2002 as a joint venture to provide post-trade and trading services in securities lending, acquired AQS last year for an undisclosed sum.
The pension plans also alleged that the defendants targeted securities lending platform SL-x, which was 鈥渇orced鈥� to shut down in 2014.
EquiLend, Bank of American, J.P. Morgan and UBS declined to comment. The other defendants did not immediately respond to requests for comment.
The Iowa Public Employees鈥� Retirement System, Orange County Employees Retirement System and Sonoma County Employees鈥� Retirement Association filed an anti-trust class action in the US Southern District Court of New York on 16 August and called for treble damages and injunctive relief.
The pension plans alleged that 鈥渉aving formed EquiLend, the prime broker defendants made it clear to market participants that all new entrants into the market would need to go through EquiLend鈥�.
Alleged systematic suppression of free market development by the defendants, which include Morgan Stanley, J.P. Morgan, Bank of America, Credit Suisse, and UBS, occurred between 2009 and 2016.
According to the complaint, the defendants aimed to maintain high fees for their stock loan services by boycotting start-up lending platforms and threatening clients to do the same.
The complaint continued: 鈥淩ecognising the nascent threat posed by all-to-all electronic trading, the prime broker defendants took steps to organise themselves into a working cartel. Their first step was to form a 鈥榙ealer consortium鈥� to protect their mutual interests.鈥�
One such platform was Quadriserv鈥檚 Automated Equity 麻豆影视传媒 Markets, commonly known as AQS, according to the pension plans.
EquiLend, which launched in 2002 as a joint venture to provide post-trade and trading services in securities lending, acquired AQS last year for an undisclosed sum.
The pension plans also alleged that the defendants targeted securities lending platform SL-x, which was 鈥渇orced鈥� to shut down in 2014.
EquiLend, Bank of American, J.P. Morgan and UBS declined to comment. The other defendants did not immediately respond to requests for comment.
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