New Mexico State Investment Council Files Antitrust Lawsuit on Alleged Rigging of CDS Market Against Global Banks
Posted on 07/02/2021
The New Mexico State Investment Council filed a antitrust lawsuit claiming Bank of America Corporation, Citigroup Inc., Goldman Sachs Group Inc., and other top financial institutions rigged the credit default swap market by manipulating a key benchmark. The complaint was filed in the U.S. District Court for the District of New Mexico. In the proposed class action other targeted banks include Barclays Plc, BNP Paribas SA, Credit Suisse Group AG, Deutsche Bank AG, JPMorgan Chase & Co., Morgan Stanley, Natwest Group Plc, and three industry groups.
The New Mexico sovereign wealth fund claims the banks rigged Barclays Plc, BNP Paribas SA, Credit Suisse Group AG, Deutsche Bank AG, JPMorgan Chase & Co., Morgan Stanley, Natwest Group Plc, and three industry groups. The plaintiff contends the banks have made “billions of dollars in cartel profits at the expense of non-dealer market participants.”
The case circles around a major concern that a system was allegedly orchestrated by the banks starting in 2005 for pricing credit default swaps (CDS) through auctions rather than bilateral negotiations between investors standing on both sides. NMSIC claims it suffered losses from trading at artificial prices caused by a conspiracy to manipulate the auction price of the complex financial instruments in violation of the Sherman Anti-Trust Act.
New Mexico State Investment Council is represented by the New Mexico attorney general’s office and New York law firm Kirby McInerney LLP.
New Mexico Attorney General Hector Balderas said, “New Mexican families should not be harmed by Wall Street greed, and we will enforce the rule of law against anyone who exploits our state.”
The case is New Mexico State Investment Council v. Bank of America Corp., D.N.M., No. 21-cv-606, complaint filed 7/1/21.