Financial Markets Antitrust and Market Manipulation Litigation

A federal court has appointed Gilbert LLP as interim co-lead counsel to represent a class of institutional investors in a major lawsuit against ten global banks accused of colluding to rig a critical financial market benchmark.

Like the antitrust and market manipulation scandals involving the foreign exchange market, the London Interbank Offered Rate (LIBOR), and the ISDAfix rate, this lawsuit alleges that ten global banks have been colluding to manipulate the credit default swap “final auction price,” which is the rate that determines the settlement value for credit default swaps.  Institutional investors use credit default swaps like a form of insurance on bond investments, and the final auction price determines how much “insurance” needs to be paid out on swaps.  Artificially deflated final auction prices increase the amount of “insurance” payments the banks receive from their counterparties, while artificially inflated final auction prices decrease the amount of “insurance” payments the banks are obligated to pay to their counterparties.  The credit default swap market has been valued at $8 trillion (in notional value).

In June 2023, the federal court overwhelmingly rejected the banks’ motion to dismiss the case, handing a major early victory to the class. The case is now in discovery.

Gilbert LLP is interim co-lead counsel for the class with Kirby McInerney LLP.  Berger Montague also represents the class.  The New Mexico Attorney General’s Office is co-counsel to the plaintiffs.