Deutsche, BofA settle rigging lawsuit, Goldman, JPMorgan, others accused over stock lending


Deutsche Bank and Bank of America have agreed to pay a combined $65.5 million to settle investor litigation accusing large banks of rigging the roughly $9 trillion government agency bond market over a decade.

Reuters reports that preliminary settlements totaling $48.5 million for Deutsche Bank and $17 million for Bank of America were filed on Thursday with the U.S. District Court in Manhattan, and require a judge's approval. Both banks denied wrongdoing.

The settlements were the first in litigation accusing 10 banks of engaging in a "brazen conspiracy" to rig the market for U.S. dollar-denominated supranational, sub-sovereign and agency (SSA) bonds, court papers show.

In the meantime, Bloomberg News reports that Goldman Sachs, JPMorgan Chase and four other investment banks are conspiring to control the more than $1 trillion market for lending stocks, according to a federal lawsuit.

The complaint by the Iowa Public Employees Retirement System and two other pension plans claims the banks are blocking a shift to all-electronic system for matching lenders and borrowers of shares, so they can continue to profit from each transaction. In a short sale, traders sell borrowed stock, anticipating the price will drop so they can profit by buying back the shares at a lower price.

“Major investment banks are conspiring to preserve their profits at the expense of everyday investors,” plaintiffs’ attorney Michael Eisenkraft of Washington-based Cohen Milstein Sellers & Toll said in a statement Thursday. The investors are seeking unspecified damages in the class-action antitrust case, which could be tripled under federal law.

Deutsche Bank, Bank of America settle agency bond rigging lawsuits

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