BRONX, N.Y. (CN) - Morgan Stanley and KeySpan Corp. conspired to inflate Consolidated Edison customers' electric bills by $160 million, a class action claims in Bronx County Court. The class claims Keyspan and Morgan Stanley used "a complex financial derivative 'swap' transaction" to do so, and that the Department of Justice fined Keyspan $12 million for it. Con Ed is not named as a defendant.
Named plaintiff Liszeida Perez claims that on Jan. 18, 2006, "Keyspan and Morgan executed a complex financial derivative 'swap' transaction, which ensured that KeySpan could continue to big the highest permissible price for its electrical capacity, notwithstanding the fact that additional market capacity being supplied by KeySpan's competitors should have resulted in greater competition and lower prices. ...
"The KeySpan/Morgan Stanley swap increased prices for retail electrical suppliers that purchase electrical generation capacity, which, in turn, led to ConEd customers paying artificially high prices for electricity during the period May 2006 through February 2008," according to the complaint.
Perez says that the Department of Justice's $12 million fine is "only a de minimis amount of the artificially inflated charges and fees that ConEd customers paid for electricity as a result of KeySpan and Morgan Stanley's unfair and deceptive business practices."
The class seeks damages for unjust enrichment, fraud, conspiracy, and business law violations. It is represented by Jeffrey Carton with Meiselman, Denlea, Packman, Carton & Beers of White Plains.
Read the Top 8
Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.