NOTABLE CASES

16 Financial Firms Settle GSE Bonds Litigation for $386.5 Million

December 30, 2019

CASE SUMMARY

The Complaint alleges that Defendants and their unnamed co-conspirators engaged in a combination and conspiracy in an unreasonable and unlawful restraint of trade. During the Class Period, Defendants controlled the supply of Fannie and Freddie bonds (“FFBs available to investors and were horizontal competitors in the FFB market). The combination and conspiracy consisted of a continuing agreement, understanding and concerted action between and among Defendants and their co-conspirators in furtherance of which Defendants fixed, maintained, and charged artificial prices for FFBs to investors. Defendants’ collusion enabled them to collect supra-competitive profits on every transaction of FFBs with Plaintiffs and the Class. At the same time, it caused Plaintiffs and the Class to pay more (in the case of FFB purchases) and receive less (in the case of FFB sales) on their FFB transactions with Defendants.

CLASS DEFINITION

On behalf of all persons and entities who or which entered into a GSE Bond Transaction with one or more Defendants or a direct or indirect parent, subsidiary, affiliate, or division of a Defendant during the Settlement Class Period.

SETTLEMENT AMOUNT

Defendant Settlement Amount Status
Deutsche Bank $15,000,000 Settled
FTN Financial $14,500,000 Settled
Goldman Sachs $20,000,000 Settled
Barclays $87,000,000 Tentative Settlement
BNP Paribas
Cantor Fitzgerald
Citigroup Global Markets
Credit Suisse Securities
HSBC Securities
JPMorgan Securities
Merrill Lynch, Pierce, Fenner & Smith
Morgan Stanley & Co
Nomura Securities
SG Americas Securities
TD Securities
UBS Securities
$250,000,000 Tentative Settlement
TOTAL AMOUNT $386,500,000

PLAN OF ALLOCATION

The Plan of Distribution categorizes GSE Bond Transactions into 31 categories based on the remaining years until maturity when the bond was purchased, sold, or otherwise transacted. For each maturity category, a “Risk Number,” which is a widely accepted measure of the sensitivity of a bond’s price to changes in yield, and a Multiplier based on the Risk Number has been assigned. ISS SCAS clients can see more details within the RecoverMax platform.

INITIAL FEDERAL FILING DATE

February 22, 2019

CLASS PERIOD

January 1, 2009 to January 1, 2019

CLAIM DEADLINE DATE

February 5, 2020 (Goldman Sachs, Deutsche Bank, FTN Financial)
TBD – Other Defendants

CLAIMS ADMINISTRATOR

A.B. Data, Ltd.

COURT

U.S. District Court – New York (Southern)

SETTLEMENT HEARING

Time: 2:00pm EST
Date: February 28, 2020
Location: Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, New York NY 10007
Judge: Honorable Jed S. Rakoff

LEAD PLAINTIFFS

Treasurer of the Commonwealth of Pennsylvania
City of Birmingham Retirement and Relief System

LEAD COUNSEL FIRMS

Scott + Scott
Lowey Dannenberg

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