A New York federal judge has dismissed a revived proposed antitrust class action against major Wall Street banks, including Bank of America Corp., Wells Fargo & Co., and others, clearing the financial institutions of allegations of conspiring to rig corporate bonds and boycott rival bond-trading platforms.
In a 42-page ruling issued Tuesday, U.S. District Judge Valerie E. Caproni granted the banks’ joint motion to dismiss the case without leave to amend. The judge found that the allegations were vague, conclusory, and time-barred, citing precedent from the Second Circuit, which previously rejected similar boycott antitrust claims in In re Treasury Securities Auction Antitrust Litigation.
The lawsuit, originally filed in 2020 by investors led by Isabel Litovich of San Juan, Puerto Rico, alleged that the banks violated the Sherman Act as early as 2006 by overcharging investors in odd-lot corporate bond trades and suppressing rival trading platforms, including TradingEdge, TradeWeb, and BondDesk. Plaintiffs also claimed that the banks adopted a “catch and kill” strategy to acquire or stifle startup platforms aimed at increasing pre-trade pricing transparency.
Judge Caproni determined that the complaint failed to identify specific actions by the defendants that could support a viable collusion claim. Furthermore, she noted that even if the allegations were more detailed, the banks’ conduct could be explained by rational economic self-interest rather than a conspiracy. The judge emphasized that many of the claims spanned nearly 30 years and were barred by the four-year statute of limitations under the Sherman Act.
The ruling marks a definitive end to the litigation, with Judge Caproni dismissing the case with prejudice. “Despite several opportunities to amend, plaintiffs are still asserting the same disparate allegations without pleading facts sufficient from which the court can infer a conspiracy. For those reasons, leave to amend is denied,” the order states.
The named defendants collectively control more than 65% of the bond underwriting market and account for 90% of corporate bond trading volume. Other banks named in the suit include JPMorgan Chase & Co., Merrill Lynch, Citigroup, Morgan Stanley, Credit Suisse, Deutsche Bank, Barclays, NatWest Markets Securities Inc., and Goldman Sachs.
Representatives for Bank of America, Citigroup, Credit Suisse, Morgan Stanley, Wells Fargo, and Goldman Sachs declined to comment. Plaintiffs were represented by Scott + Scott Attorneys at Law LLP, Burke LLP, Criden & Love PA, Erez Law PLLC, and multiple other firms. The banks were represented by Sullivan & Cromwell LLP, Allen Overy Shearman Sterling, Katten Muchin Rosenman LLP, Cahill Gordon & Reindel LLP, Covington & Burling LLP, and several additional firms.
