Antitrust Class Actions Allege|Bid Rigging In Municipal Derivatives

      WASHINGTON (CN) – Wachovia Bank conspired with 33 other banks to fix prices, rig bids and allocate customers for municipal derivatives, a school district says in a federal antitrust class action. Lead plaintiff Central Bucks School District sued Bank of America separately, because it is cooperating with the federal investigation.

     “This lawsuit arises out of an illegal agreement, understanding and conspiracy among providers and brokers of municipal derivatives to not compete and to rig bids for municipal derivatives sold to issuers of municipal bonds,” the Wachovia complaint states. “The illegal agreement, understanding and conspiracy is based on per se illegal horizontal communications and conduct among providers of municipal derivatives. These providers have engaged in communications facilitating and conduct restraining competition such as rigging of bids, secret compensation of losing bidders, courtesy bids, deliberately losing bids, and agreements not to bid. Brokers have knowingly participated in this per se illegal conspiracy to limit competition by facilitating indirect communications among providers and have shared the wrongful profits form the illegal agreement to restrain competition.”
     Plaintiffs demand treble damages. Plaintiffs’ lead counsel is Michael Hausfeld with Cohen, Milstein, Hausfeld & Toll.
     Here are the defendants in the Wachovia case: Wachovia Bank NA; AIG Financial Products Corp.; Bear, Stearns & Co., Inc.; Financial Security Assurance Holdings, Ltd.; Financial Security Assurance, Inc.; Financial Guaranty Insurance Co.; Trinity Funding Co. LLC; GE Funding Capital Market Services, Inc.; Genworth Financial Inc.; Natixis SA; JP Morgan Chase & Co.; Piper Jaffrey & Co.; Societe Generale SA; AIG SunAmerica Life Assurance Co.; UBS AG; Security Capital Assurance Inc.; XL Asset Funding Co. I, LLC; XL Life Insurance & Annuity Co.; Lehman Brothers Inc.; Merrill Lynch & Co., Inc.; Morgan Stanley; National Westminster Bank PLC; Natixis Funding Corp.; Investment Management Advisory Group, Inc.; CDR Financial Products; Feld Winters Financial LLC; Winters & Co. Advisors, LLC; First Southwest Co.; George K. Baum & Co.; Kinsell Newcomb & De Dios Inc.; PackerKiss Securities, Inc.; Shockley Financial Corp.; and Sound Capital Management, Inc.

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