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Monday, December 9, 2019

Financial institutions accused of collusion, manipulation

By Robbie Hargett | Aug 14, 2015


Representatives of a Michigan public pension fund are suing several financial services companies, alleging collusive manipulation of the market for treasury bills, notes, bonds and other derivative financial products.

The city of Pontiac Police and Fire Retirement System, individually and for all others similarly situated, filed a class action lawsuit Aug. 3 in U.S. District Court Southern District of New York against Merrill Lynch, Pierce, Fenner & Smith Inc., Morgan Stanley & Co., BNP Paribas Securities Corp., Barclays Captial Inc., and other financial services corporations, alleging restraint of trade, price manipulation, principal-agent liability, aiding and abetting liability and unjust enrichment.

According to the complaint, from Jan. 1, 2007 to Dec. 31, 2012, the defendants used their position as "primary dealers" in the market for U.S. treasuries to subvert market operations by manipulating U.S. Treasury Department auctions and treasuries prices. This manipulation, the suit says, maximized defendants' profits at the expense of their customers.

The lawsuit states Pontiac suffered injuries in its business as a result of the defendants' collusive and manipulative activities.

The plaintiff and others in the class seek an order restraining the defendants from continuing to maintain the alleged conspiracy, plus damages and court costs.

The plaintiff is represented by attorneys Jason A. Zweig, Steve W. Berman, Elizabeth A. Fegan, Peter E. Borkon, Jeff Friedman, and Shana E. Scarlett of Hagens Berman Sobol Shapiro in New York, Seattle, Chicago and Berkeley, Calif.

U.S. District Court Southern District of New York case number: 1:15-cv-06072-PGG.

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Morgan Stanley