NEW YORK CITY (Alliance News) - Twelve of the biggest players in interest-rate swap trading were sued for allegedly conspiring to block fund managers from entering the exchange market, according to reports.
The reports indicated that the antitrust complaint filed in New York federal court by a public pension fund names most of the biggest US and European investment banks among the defendants as well as trading platforms ICAP Capital Markets LLC and Tradeweb Markets LLC.
Big banks have been accused of colluding in other areas of trading such as interbank rates, currencies and credit default swaps. Financial institutions have paid billions of dollars to settle some of the cases brought by investors and governments.
The banks are Bank of America Corp, Citigroup Inc, Goldman Sachs Group Inc, JPMorgan Chase & Co, Bank of America Merrill Lynch, BNP Paribas, Royal Bank of Scotland, UBS Group AG, Barclays PLC, Credit Suisse Group AG, Deutsche Bank AG.
In their role as interest rate swap market-makers, the banks have prevented buy-side investors from trading the swaps on exchanges, according to the complaint. The total notional value of interest-rate swaps outstanding was about USD320 trillion in the first half of 2015, according to a report this month by the Bank for International Settlements.
The fund seeks class-action status and triple damages, as allowed under federal law.
The swaps, a type of derivative that can swing in value when central banks raise or lower rates, help pension funds, companies and municipalities manage risk and insulate themselves from changes in monetary policy.
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Barclays (BARC)