In a significant development, JPMorgan Chase & Co. (JPM), Morgan Stanley (MS), Goldman Sachs Group Inc. (GS), UBS Group AG (UBS), and EquiLend have agreed to pay a combined sum of $500 million to settle a long-standing antitrust suit. The lawsuit, which was led by four pension funds and advisory firm Torus Capital LLC, accused the banks and their joint venture, EquiLend, of impeding the modernization of the over-the-counter stock loan market.
The plaintifs alleged that the banks sought to maintain their market dominance and privileged position as intermediaries between stock borrowers and lenders by obstructing efforts to modernize and streamline the stock loan market. EquiLend has also committed to implement reforms and work in collaboration with the ongoing lawsuit against Bank of America Corp. Negotiations with Bank of America are currently underway.
The lawsuit, which dates back six years, has seen Credit Suisse settle for $81 million. The remaining defendants have now reached a settlement agreement, subject to court approval. Notably, the plaintiffs in the lawsuit comprise reputable entities such as the Iowa Public Employees’ Retirement System, the Los Angeles County Employees Retirement System, the Orange County Employees Retirement System, and the Sonoma County Employees Retirement Association.
This settlement is expected to have a considerable impact on the future dynamics of the over-the-counter stock loan market. The plaintiffs’ allegations shed light on concerning practices that hindered innovation and market efficiency. With major financial institutions agreeing to compensate for their actions, it marks an important step towards greater transparency and fairness within the industry.
While this settlement brings some closure to the long-standing antitrust suit, negotiations with Bank of America remain ongoing. Further updates on the matter are expected in due course, and stakeholders will closely monitor the resolution of this important case.
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