Big US banks paid $500 million in conspiracy lawsuit
Institutions such as Bank of America, Goldman Sachs, JPMorgan and others, had to pay a million-dollar sum due to the lawsuit
In a high-impact legal twist, renowned financial institutions Goldman Sachs, JPMorgan Chase, Morgan Stanley and UBS have agreed to jointly pay out a colossal sum of approximately $500 million, under a settlement aimed at ending a lawsuit brought by shareholders.
The legal complaint alleged that these companies had participated in an anticompetitive conspiracy, according to court documents filed in New York on Wednesday.
Although it is pending approval by a judge, the agreement not only contemplates the financial outlay, but also involves the active collaboration of these four entities with the investors who sued Bank of America, another actor involved in the litigation.
The central accusation raised by investors focuses on the alleged coordination of banks to undermine new entrants in the securities lending market. The agreement, summarized by the plaintiffs, maintains that these entities took advantage of their control over EquiLend to establish an alleged monopoly in the sector, causing harm to emerging “startups” that sought to position themselves in the industry.
As an essential part of this historic agreement, EquiLend has committed to implement a rigorous code of ethics against monopolistic practices. In addition, members of its board of directors will be required to participate in programs designed to prevent such conduct.
It is worth noting that a similar precedent was set in 2022, when the plaintiffs settled with Credit Suisse (now part of UBS), for the sum of $81 million.
With the presentation of this agreement today, the plaintiffs emphasize that the total compensation could amount to 580 million dollars, placing this case as one of the most transcendental litigation of the last decade in relation to monopolistic practices in the financial field.
K. Tovar
Source: Descifrado
(Reference image source: Unsplash+)
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