National investment loss lawyers KlaymanToskes reports Morgan Stanley, Goldman Sachs, JPMorgan Chase, and UBS have agreed to pay a sum of $499 million to settle a long-standing legal dispute. The allegations revolved around their violation of antitrust laws by hampering initiatives aimed at modernizing the opaque $2.7 trillion stock lending market.
The settlement, announced on August 23rd, 2023, will see the financial institutions disburse $499 million to a group of investors primarily composed of US pension funds from Iowa, Los Angeles, Orange County, and Sonoma County. Notably, the resolution also includes EquiLend, an industry-owned platform that facilitates electronic securities lending and borrowing.
The case was initiated in 2017 when the plaintiffs filed a lawsuit alleging that the banks conspired to hinder the development of exchanges like AQS in the US and SL-x in Europe. Such exchanges could have potentially have mitigated the expense of borrowing stocks for lenders and borrowers. Securities lending entails institutional investors lending assets to one another for a fee, and borrowers generally include hedge funds, investment banks, and broker-dealers.
EquiLend was introduced in 2002 and was co-founded by several banks including Goldman Sachs, JPMorgan, Morgan Stanley, UBS, Lehman Brothers, and Merrill Lynch. EquiLend is currently owned by BofA. In 2022, Credit Suisse committed to paying $81 million to resolve the lawsuit. Proceedings against Bank of America, another defendant in this case, are still ongoing.
The complainants asserted that the banks boycotted investors who borrowed from different platforms, while simultaneously striving to stifle the advancement of emerging exchanges by procuring their fundamental intellectual property and placing it aside. The plaintiffs claimed that this left them ensnared in an archaic market structure and compelled them to remit excessively competitive ‘spreads’ to the defendant banks for their role as intermediaries in the stock loan market.
KlaymanToskes is a leading national securities law firm which practices exclusively in the field of securities arbitration on behalf of retail and institutional investors throughout the world in large and complex securities matters. The firm has recovered over $250 million in FINRA arbitrations and over $350 million in other securities litigation matters. KlaymanToskes has office locations in California, Florida, New York, and Puerto Rico.
KlaymanToskes, P.A.
Lawrence L. Klayman, Esq.
888-997-9956
lawrence@klaymantoskes.com
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