10 Biggest Wall St. Banks Now Facing Legal Action for Price Fixing $320 Trillion Derivative Market

Market

By Jay Syrmopoulos

New York, NY – A class action lawsuit, filed last week, accuses two trading platforms and ten of Wall Street’s largest megabanks of conspiring to stifle competition in the $320 trillion dollar derivatives market for interest rate swaps.

The lawsuit claims the banks “have been able to extract billions of dollars in monopoly rents, year after year, from the class members in this case.”

According to a report by Reuters:

The class action lawsuit, filed in U.S. District Court in Manhattan, accuses Goldman Sachs Group (GS.N), Bank of America Merrill Lynch (BAC.N), JPMorgan Chase(JPM.N), Citigroup(C.N), Credit Suisse Group (CSGN.VX), Barclays Plc (BARC.L), BNP Paribas SA (BNPP.PA), UBS (UBSG.VX), Deutsche Bank AG (DBKGn.DE), and the Royal Bank of Scotland (RBS.L) of colluding to prevent the trading of interest rate swaps on electronic exchanges, like the ones on which stocks are traded.

As a result, the lawsuit alleges, banks have successfully prevented new competition from non-banks in the lucrative market for dealing interest rate swaps, the world’s most commonly traded derivative.

The Public School Teachers’ Pension and Retirement Fund of Chicago brought the suit against the elite global financial powerhouses, after purchasing interest rate swaps from numerous banks as a means of assisting the fund in hedging against interest rate risk on debt. Those purchases led to the Chicago Teachers’ Pension and Retirement Fund vastly overpaying for those swaps, according to the suit.


The suit alleged that the banks “have jointly threatened, boycotted, coerced, and otherwise eliminated any entity or practice that had the potential to bring exchange trading to buyside investors,” since at least 2007.

“Defendants did this for one simple reason: to preserve an extraordinary profit center,” the lawsuit said.

The lawsuit goes on to claim that the banks masked their collusion by using code-names for joint projects such as “Lily, Fusion, and Valkyrie.”

Out of the ten banks named in the lawsuit, nine of the banks own equity stakes in Tradeweb and hold positions on the company’s board and governance committees. The banking consortium used those positions to effectively control Tradeweb and collectively blocked the development of more investor-friendly swaps exchanges by firms such as the CME Group, TrueEX, Javelin Capital Markets, and TeraExchange, according to the suit.

According to the lawsuit:

“During the time period relevant here, Tradeweb board and governance committees… were organized specifically for the purpose of protecting the ‘dealer community’ from the growth of exchange trading.”

Similar allegations of bank collusion in the market for another type of derivative, known as credit default swaps, have been the subject of investigations by the United States Department of Justice and the European Commission, as well as a separate class-action lawsuit brought by investors, according to Reuters.

In September, twelve banks and two industry groups settled that lawsuit by agreeing to pay $1.87 billion, making it one of the largest antitrust class action lawsuits in U.S. history, according to the Wall Street Journal.

The scale of alleged theft is almost unimaginable. If you want to understand who/what controls governments, you have found the industry that stands above all others in its ability to bend the will of states and from which all other industries bow at the alter of; the true ‘Masters of the Universe.’


Jay Syrmopoulos is an investigative journalist, free thinker, researcher, and ardent opponent of authoritarianism. He is currently a graduate student at University of Denver pursuing a masters in Global Affairs. Jay’s work has been published on Ben Swann’s Truth in Media, Truth-Out, AlterNet, InfoWars, MintPress News, as well as many other sites. You can follow him on Twitter @sirmetropolis, on Facebook at Sir Metropolis and now on tsu.

  • Mick McNulty

    When the markets crash it will be the end of the west as a political power. It will be the end of an epoch. The third world awaits, and already we’ve reached the banana republic stage on our way through.

    • Karll

      They’ve done nothing to prevent another crash like 2008. The next one will be worse.

      • Abe

        1929 will be a picnic compared to what’s coming.

  • Invierno

    Theatre designed to give vent to the People’s rage. Watch where this goes….ultimately, a fine will be imposed…the ‘biggest’ in ‘history’…balance is restored….go back to sleep.

  • gawain

    banks are another tool of the scum that have robbed humanity for centuries.
    No usury fees or taxes ever again.
    End the Fed – end all zentral banks and replace with a true humanitarian bank.
    Between taxes and bank usury – it’s a wonder anyone (at least here in the several states) can put any type of savings away.
    of course agenda 2030 – no commoner will own anything – get in the rail car and goto work come home – rinse (so long as you are cleared for rinse on any particular day) and repeat.
    Let’s see – I’m real sure over the past 40 years I have put well over $200k for a $75K mortgage.

    I have recently coughed up around $40K to the beast for it’s never ending death machine.
    Taxes and usury fees are a one two punch in the jaw.
    Abolish the banks and thievery will be eliminated.
    the gold collar scum might even have to get a job – oooops.

  • omni

    so unions are betting on the riskiest of investments to guarantee their member’s pension payments? hahahahahahahaha!!!!!!!

  • Howlingmad

    Now, we’ll see how far “This Goes” ! . . . but I’m NOT HOLDING MY BREATH !.

  • garysco

    And not a single one will wear an orange jump suit or lose his Lamborghini for fear they will rat off all our tax masters in DC.

  • littljo

    Kudos to Iceland – bankers every where should be slapped in jail and the entire system needs to crumble.

  • John Fitzgerald

    If they’re doing gods work send the bill to him.

  • yEshUA ImmAnUEl * ben-‘Adam

    Revelation 12:
    9 And the great dragon was cast out, that old serpent, called the Devil, and Satan, which deceiveth the whole world: he was cast out into the earth, and his angels were cast out with him.
    10 And I heard a loud voice saying in heaven, Now is come salvation, and strength, and the kingdom of our God, and the power of his Christ: for the accuser of our brethren is cast down, which accused them before our God day and night.

  • yEshUA ImmAnUEl * ben-‘Adam

    Isaiah 19:
    20 It will be a sign and witness to the Lord Almighty in the land of Egypt. When they cry out to the Lord because of their oppressors, he will send them a savior and defender, and he will rescue them.

  • yEshUA ImmAnUEl * ben-‘Adam

    Matthew 7:
    9 “Which of you, if your son asks for bread, will give him a stone? 10 Or if he asks for a fish, will give him a snake? 11 If you, then, though you are evil, know how to give good gifts to your children, how much more will your Father in heaven give good gifts to those who ask him! 12 So in everything, do to others what you would have them do to you, for this sums up the Law and the Prophets.”

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