Six banks, including Citi, JPMorgan, RBS, have market manipulation claims against them dismissed

Maria Nikolova

Citi, Credit Suisse, JPM, Goldman Sachs, Morgan Stanley and RBS are no longer defendants in a market manipulation case targeting primary dealers of US Treasuries.

About a week after the plaintiffs in a market manipulation case targeting primary dealers of US Treasuries dismissed their claims against 15 defendants, more top banks are no longer on the defendants’ list.

As per an order signed today by Judge Paul G Gardephe of the New York Southern District Court, Citigroup Inc (NYSE:C), Credit Suisse Group AG (VTX:CSGN), JPMorgan Chase & Co. (NYSE:JPM), Goldman Sachs Group Inc (NYSE:GS), Morgan Stanley (NYSE:MS), and Royal Bank of Scotland Group PLC (NYSE:RBS) are no longer parties in a market manipulation case captioned “In re: Treasury Securities Auction Antitrust Litigation” (1:15-md-02673).

The order, seen by FinanceFeeds, states that the plaintiffs voluntarily dismiss all claims against Defendants Citigroup Inc.; Credit Suisse Group AG; The Goldman Sachs Group, Inc.; JP Morgan Chase & Co.; Morgan Stanley; and The Royal Bank of Scotland Group plc without prejudice to reassert such claims against such Defendants at a later time should evidence arise in discovery.

In particular, the document states that:

  • Citigroup Inc is a holding company and does not transact in treasuries securities at auction or in the secondary market.
  • Credit Suisse Group AG is a holding company and does not transact in treasuries securities at auction or in the secondary market.
  • The Goldman Sachs Group, Inc is a holding company is not a primary dealer or market maker in treasury securities.
  • JP Morgan Chase & Co. is a holding company and is not a primary dealer or market maker in treasury securities.
  • Morgan Stanley is a holding company and is not a primary dealer or market maker in treasury securities.
  • The Royal Bank of Scotland Group Plc is a holding company and is not a primary dealer or market maker in treasury securities.

The document has also been filed in an associated case, captioned Breakwater Trading LLC et al v. Bank of America Corporation et al (1:17-cv-06497). The plaintiffs in both cases overlap – Breakwater Trading LLC, BWT Professional Trading, LLC, and Endeavor Trading, LLC.

They accuse the defendants, all of which are or were Primary Dealers of Treasuries, of taking part in a conspiracy, starting at least as early as January 1, 2007 and thereafter continuing, to fix and otherwise manipulate marketable US Treasury Bills, Notes, Bonds, Floating Rate Notes (FRNs), and Treasury Inflation-Protected Securities (TIPS) markets and related Auctions and derivative financial products, including Treasury-predicated futures and options traded on the Chicago Mercantile Exchange (CME).

The Defendants are alleged to have violated their market integrity obligations and otherwise abused their positions of trust to their own ends. They are accused to have conspired by, among other things, sharing confidential and competitively sensitive client order information to fix and otherwise manipulate the Treasuries and Treasuries-Predicated Instruments markets before, during, and after Treasuries Auctions.

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