Credit Suisse Class Action Settlements Total $106M in Alleged Stock Loan Conspiracy

Credit Suisse Stock Loan Conspiracy Class Action Settlement Overview:

• Why: The settlements will allow Credit Suisse to mostly exit the class action litigations that allege the bank was part of a multibank conspiracy regarding stock loan trading.
• Who: Credit Suisse reached two separate class action settlements.
• Where: The lawsuits were filed in New York federal court.

By reaching a settlement of $81 million, Credit Suisse will be the first bank to bow out of a class action lawsuit that alleged megabanks conspired to monopolize stock loan trading. The bank also reached a separate $25 million deal to settle multidistrict litigation that consolidated several class action lawsuits with similar antitrust allegations. 

Both “icebreaker” deals will release Credit Suisse from litigation. The deals each require Credit Suisse to continue to cooperate with the class action lawsuits as litigation continues against the other megabanks involved.  

Stock lending is when the owner of shares transfers them temporarily to a borrower, then the borrower pays a borrowing fee and transfers other assets to the lender as collateral. This investment practice can be used to increase fund returns.

Credit Suisse, along with the other banks named in the class action lawsuits, are all major brokers in the stock lending industry and maintain a share of 80% of the business, according to the class action complaint.

$81M Payout an ‘Excellent Result’ for Settlement Class

Credit Suisse’s $81 million class action payout settles litigation brought forth by a group of public pension funds, including the Iowa Public Employees’ Retirement System, in 2017. The funds alleged that Credit Suisse, along with Morgan Stanley & Co. LLC, Goldman Sachs & Co. LLC and JPMorgan Chase Bank NA, conspired to hamstring certain startup competitors in the stock lending industry, such as Quadriserv and SL-x. 

The $81 million figure represents between 8% and 17% of Credit Suisse’s proportional share of the damages the pension fund investors believed they’ve suffered. The investors call this payout an “excellent result for the settlement class.” 

The settlement class includes all persons or entities who, directly or through an agent, entered into stock loan transactions with any relevant Credit Suisse parties or the other prime brokers or their direct or indirect parents, subsidiaries, or divisions in the United States. The class period is from Jan. 7, 2009, through the date of the settlement’s execution. 

Credit Suisse to Pay Additional $25M to Burned Investors

The $25 million will settle multidistrict litigation that in 2016 consolidated several class action lawsuits against Credit Suisse, JPMorgan Chase & Co., Bank of America, Royal Bank of Scotland Group PLC, Goldman Sachs Group Inc. and Deutsche Bank AG. In these cases, investors alleged the banks conspired to keep their own profits high despite investor losses by preventing investors from using newer, anonymous trading platforms. 

The settlement amount will first satisfy taxes, attorney fees, service awards and expenses before distributions are made to the settlement class. The settlement class includes anyone who, directly or through an agent, entered into at least one interest rate swaps transaction with any defendants in the United States. The class period is from Jan. 1, 2008, through Jan. 21, 2022.

Were you affected by Credit Suisse’s conspiracy with other megabanks to prevent stock loan competition? You could be an eligible member of these settlement classes!

The plaintiffs in the $25 million settlement are represented by Cohen Milstein Sellers & Toll PLLC, Quinn Emanuel Urquhart & Sullivan LLP, Susman Godfrey LLP, Jacobs Burns Orlove & Hernandez and Labaton Sucharow LLP.

The Credit Suisse Stock Loan Conspiracy Class Action $25M Settlement is In re: Interest Rate Swaps Antitrust Litigation, Case No. 1:16-md-02704, in the U.S. District Court for the Southern District of New York. 

The plaintiffs in the $81 million settlement are represented by Quinn Emanuel Urquhart & Sullivan LLP, Safirstein Metcalf LLP,and Cohen Milstein Sellers & Toll PLLC.

The Credit Suisse Stock Loan Conspiracy Class Action $81M Settlement is Iowa Public Employees’ Retirement System et al. v. Bank of America Corp. et al., Case No. 1:17-cv-06221, in the U.S. District Court for the Southern District of New York. 

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