Major Banks to Settle Anti-Competitive Allegations for $499 Million: JPMorgan Chase, Goldman Sachs, UBS, and Morgan Stanley

JPMorgan Chase, Goldman Sachs, UBS, and Morgan Stanley Settle Anti-Competitive Lawsuit for $499 Million

Four major banks, JPMorgan, Goldman Sachs, UBS, and Morgan Stanley, have agreed to pay a total of $499 million to settle a class action lawsuit accusing them of attempting to stifle competition in the stock-lending market. The lawsuit was filed in 2017 by US pension funds, led by the Iowa Public Employees’ Retirement System.

The banks allegedly tried to dominate the market with their own system called EquiLend while impeding the growth of new platforms for electronic securities lending. EquiLend was established in 2001 and is now owned by Bank of America.

Credit Suisse has already paid an $81 million fine to settle its part of the lawsuit, leaving Bank of America as the only remaining defendant. EquiLend denies any wrongdoing and settled to maintain its day-to-day business operations.

Key Points

JPMorgan, Goldman Sachs, UBS, and Morgan Stanley are collectively paying $499 million to settle an anti-competitive lawsuit filed by US pension funds.
The banks are accused of attempting to monopolize the stock-lending market with their own system, EquiLend, while obstructing the development of other platforms.
EquiLend, now owned by Bank of America, denies any wrongdoing and settled to ensure the continuation of its business operations.

Hot Take: Banks Paying Hefty Settlement to Avoid Anti-Competitive Accusations

The settlement amount of nearly half a billion dollars reflects the seriousness of the allegations against JPMorgan Chase, Goldman Sachs, UBS, and Morgan Stanley. By paying this substantial sum, the banks aim to put an end to the class action lawsuit and prevent similar anti-competitive practices in the future. While EquiLend denies any wrongdoing, the settlement allows the company to maintain its everyday operations. This case highlights the importance of fair competition in the financial industry and the potential consequences for those who attempt to impede it. The outcome of this lawsuit could have a significant impact on the stock-lending market and the development of new platforms for electronic securities lending in the future.