Council of Institutional Investors

Litigation over Treasury Securities Expands
Thursday, December 3, 2015

Section: CII Governance Alert

Litigation involving price manipulations of U.S. Treasury securities and related derivative financial products is continuing to spread nationwide, reports Michael Stocker, an attorney with Labaton Sucharow.

To date, 40 cases have been filed in four jurisdictions: Southern District of New York (33 cases); Northern District of Illinois (five cases); Southern District of Alabama (one case); and District of Virgin Islands (one case). A December 3 hearing will help decide where these cases should be transferred and consolidated to be heard before a single judge. Once the panel decides on a venue, the litigation will begin.

While the private litigation is just getting started, regulators are forging ahead with their investigations. The DOJ, Commodity Futures Trading Commission, and New York Department of Financial Services sent requests for information to several primary dealers of U.S. Treasury securities. Recent reports suggest that the focus of the investigations is potentially anticompetitive and manipulative trading in the pre-auction market.
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