S&P Global, CUSIP Global Class Action Claims Companies Conspired To Eliminate Competition

S&P Global, CUSIP Global CUSIP Monopoly Class Action Lawsuit Overview: 

• Who: Dinosaur Financial Group and Swiss Life Investment Management Holding filed a class action lawsuit against S&P Global, CUSIP Global Services, the American Bankers Association and FactSet Research Systems. 
• Why: Dinosaur Financial and Swiss Life claim S&P Global and CUSIP Global have attempted to monopolize the market for the Committee on Uniform Securities Identification Procedures (CUSIP).
• Where: The class action lawsuit was filed in New York federal court.

Antitrust claims have been lobbied against S&P Global and CUSIP Global Services by two investment management firms earlier this month.

Plaintiffs Dinosaur Financial Group and Swiss Life Investment Management Holding claim S&P Global and CUSIP Global conspired to eliminate competition for the Committee on Uniform Securities Identification Procedures (CUSIP), which are used to identify financial instruments. 

Dinosaur Financial and Swiss Life claim banks have used CUSIPs for years to identify and settle certain financial instruments and, prior to the 1980s, would historically work with S&P Global and CUSIP Global in doing so. 

In the 1980s however, Dinosaur Financial and Swiss Life say competition for CUSIPs arose from data vendors such as Bloomberg LP, which began offering “rich sets” of value-added data services which included CUSIPs. 

“As a result, S&P and CGS lost their contractual relationships with Financial Case Institutions and therefore could no longer control the Financial Institutions’ use of the CUSIPs they received from their Data Vendors,” the class action lawsuit states. 

Dinosaur Financial and Swiss Life claim this new competition “threatened S&P’s monopoly power over the CUSIP Use Market.”

S&P Global, CUSIP Global Begin Putting Clauses In Contracts

In response to this threat, S&P Global and CUSIP Global started putting clauses in their contract agreements with data vendors that “purported to give S&P and CGS control anew over the use of CUSIPs by the financial institutions.” 

Dinosaur Financial and Swiss Life say these clauses purported to bar data vendors from offering CUSIPs to any financial institution which did not sign a licensing agreement directly with S&P Global.

The revised agreements also required financial institutions to pay S&P Global “hefty” license fees that were based on “bogus and malleable claims that a copyright owned by the (American Bankers Association) allowed them to impose these restrictions.” 

The American Bankers Association is also named as a defendant in the class action lawsuit, along with FactSet Research Systems, which, Bloomberg reports, agreed to purchase CUSIP Global from S&P Global for nearly $2 billion in December.

“None of S&P, CGS or the ABA had the legal right, and FactSet does not have the legal right, to control the use of CUSIPs by financial institutions, and therefore had and have no legal basis to impose either the ‘license agreements’ or the ‘license fees’ on financial institutions,” the class action lawsuit states.

Dinosaur Financial and Swiss Life want to represent a nationwide class of all persons or entities that directly paid a so-called “license fee” to S&P Global or FactSet within the last four years. 

Dinosaur Financial and Swiss Life claim S&P Global and CUSIP Global are in violation of the Sherman Act. The investment management firms are demanding a jury trial and requesting declaratory and injunctive relief along with damages for themselves and all class members. 

The class action lawsuit was proceeded by one filed against S&P Global, CUSIP Global, the ABA and FactSet by Hildene Capital Management LLC, which similarly alleges they conspired to eliminate competition for CUSIPs, the National Association of Plan Advisors reports. 

A separate class action lawsuit revolving around Sherman Act claims targeted Align Technology for allegedly monopolizing the market for invisible plastic aligners with its Invisalign product. 

Have you paid a license fee to S&P Global or FactSet? Let us know in the comments! 

The investment management firms are represented by Leiv Blad and Jeffrey Blumenfeld of Competition Law Partners PLLC; Robert N. Kaplan, Frederic S. Fox, Gregory K. Arenson and Donald R. Hall of Kaplan Fox & Kilsheimer LLP; and David Nimmer and Joseph Mantegani of Irell & Manella LLP.

The S&P Global, CUSIP Global CUSIP Monopoly Class Action Lawsuit is Dinosaur Financial Group LLC, et al. v. CUSIP Global Services, et al., Case No. 1:22-cv-01860, in the U.S. District Court for the Southern District of New York.

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