In re Treasury Securities Auction Antitrust Litigation

Judicial Panel on Multidistrict Litigation

In re Treasury Securities Auction Antitrust Litigation

148 F. Supp. 3d 1360, 2015 U.S. Dist. LEXIS 166046, 2015 WL 8542505

CourtUnited States Judicial Panel on Multidistrict Litigation

DecidedDecember 8, 2015

DocketMDL No. 2673

StatusPublished

This text of 148 F. Supp. 3d 1360 (In re Treasury Securities Auction Antitrust Litigation) is published on Counsel Stack Legal Research, covering United States Judicial Panel on Multidistrict Litigation primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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In re Treasury Securities Auction Antitrust Litigation, 148 F. Supp. 3d 1360, 2015 U.S. Dist. LEXIS 166046, 2015 WL 8542505 (jpml 2015).

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Opinion

TRANSFER ORDER

Sarah S. Vance, Chair

Before the Panel:

* Plaintiffs in two actions in the Southern District of New York move under 28 U.S.C. § 1407 to centralize this litigation in that district. This litigation currently consists of 25 actions pending in three districts, as listed on Schedule A. Since the filing of the motion, the Panel has been notified of 14 related actions.¹ The actions allege that over 20 defendant banks conspired to manipulate Treasury securities auctions overseen by the Federal Reserve Bank of New York, as well as the market for derivative financial products.²

All responding plaintiffs and defendants support centralization, but they disagree [1362]*1362on the transferee district. Plaintiffs in 23 actions on the motion and four potential tag-along actions support centralization in the Southern District of New York. This district also has the unanimous support of the defendants. Plaintiffs in the Northern District of Illinois action- on the motion, one Southern District of New York action (Varner), and three potential tag-along actions request the Northern District of Illinois.

On the basis of the papers filed and the hearing session held, we find that these actions involve common questions of fact, and that centralization will serve the convenience of the parties and witnesses and promote the just and efficient conduct of this litigation. These actions share common factual questions arising out of allegations that over 20 financial institutions, referred to as primary dealers,- conspired to manipulate the pricing of (1) U.S. Treasury securities (Treasury bills, notes, bonds, and related debt instruments) at Treasury auctions overseen by the Federal Reserve Bank of New York; and (2) derivative financial products, such as Treasury futures and options, that are based on or otherwise tied to the price of Treasury securities. In particular, all actions allege that the manipulation of pricing information by defendants'occurred in the “when issued” market — the pre-auction period between, the date the Federal Reserve Bank of New York announces the details of an upcoming auction and the date the new securities are issued. Discovery is likely to involve numerous third parties, including the Federal Reserve Bank of New York, the New York Department of Financial Services, and former primary dealers of Treasury securities and their employees. Additionally, all actions are on behalf of overlapping putative nationwide classes of persons and entities who transacted in Treasury' securities, derivatives, and financial products linked to the interest rates of Treasury securities, and assert claims under the' Sherman Act and the Commodity Exchange Act. Centralization will eliminate duplicative discovery; prevent inconsistent pretrial rulings, including with respect to class certification; and conserve the resources of the parties, their counsel and the judiciary.

We conclude that the Southern District of New York is the appropriate transferee district for this litigation. Nearly all defendants have their U.S. headquarters in or near New York or conduct their operations concerning Treasury securities there. The Federal Reserve Bank of New York, which oversees the Treasury auctions at issue, also is located in this district. Moreover, the vast majority of actions are pending in this district. Judge Paul G. Gar-dephe, who presides over 30 actions in that district, is an experienced transferee judge. We are confident he will steer this litigation on a prudent course.

IT IS THEREFORE ORDERED that the actions listed on Schedule A and pending outside the Southern District of New York are transferred to the Southern District of New York and, with the consent of that court, assigned to the Honorable Paul G. Gardephe for coordinated or consolidated pretrial proceedings.

SCHEDULE A

MDL No. 2673 — IN RE: TREASURY SECURITIES AUCTION ANTITRUST LITIGATION

Northern District of Illinois

THE POLICE RETIREMENT SYSTEM OF ST. LOUIS v. BANK OF [1363]*1363NOVA SCOTIA, NEW YORK AGENCY, ET AL., C.A. No. 1:15-08417

Southern District of New York

STATE-BOSTON RETIREMENT SYSTEM v. BANK OF NOVA SCOTIA, NEW YORK AGENCY, ET AL., C.A. No. 1:15-05794

BEAVER COUNTY EMPLOYEES’ RETIREMENT FUND, ET AL. v. BANK OF NOVA SCOTIA, NEW YORK AGENCY, ET AL., C.A. No. 1:15-05807

ARKANSAS TEACHER RETIREMENT SYSTEM v. BANK OF NOVA SCOTIA, NEW YORK AGENCY, ET AL., C.A. No. 1:15-05830

FEDERIGHI v. BANK OF NOVA SCOTIA, NEW YORK AGENCY, ET AL., C.A. No. 1:15-05843

UNITED FOOD AND COMMERCIAL WORKERS UNION AND PARTICIPATING FOOD INDUSTRY EMPLOYERS TRI-STATE PENSION FUND v. BANK OF NOVA SCOTIA, NEW YORK AGENCY, ET AL., C.A. No. 1:15-05931

INTER-LOCAL PENSION FUND GRAPHIC COMMUNICATIONS CONFERENCE OF THE INTERNATIONAL BROTHERHOOD OF TEAMSTERS v. BANK OF NOVA SCOTIA, NEW YORK AGENCY, ET AL., C.A. No. 1:15-05939

UNITED INTERNATIONAL INSURANCE COMPANY v. BANK OF NOVA SCOTIA, NEW YORK AGENCY, ET AL., C.A. No. 1:15-05957

IBEW LOCAL 640 ARIZONA CHAPTER NECA PENSION TRUST FUND v. BMO CAPITAL MARKETS CORP., ET AL., C.A. No. 1:15-06003

CITY OF PONTIAC POLICE AND FIRE RETIREMENT SYSTEM, ET AL. v. BANK OF NOVA SCOTIA, NEW YORK AGENCY, ET AL., C.A. No. 1:15-06072

RUTGERS ENHANCED INSURANCE COMPANY v. BANK OF'NOVA SCOTIA, NEW YORK AGENCY, ET AL., C.A. No. 1:15-06129

ST. JOHN v. BANK OF NOVA SCO-TIA, NEW YORK AGENCY, ET AL., C.A. No. 1:15-06139

OKLAHOMA FIREFIGHTERS PENSION AND RETIREMENT SYSTEM v. BANK OF NOVA SCOTIA, NEW YORK AGENCY, ET AL., C.A. No. 1:15-06474

CLEVELAND BAKERS AND TEAMSTERS PENSION FUND, ET AL. v. BANK OF NOVA SCOTIA, NEW YORK AGENCY, ET AL., C.A. No. 1:15-06782

UNITED FOOD AND COMMERCIAL WORKERS LOCAL 1776 & PARTICIPATING EMPLOYERS PENSION FUND v. BANK OF NOVA SCOTIA, NEW YORK AGENCY, ET AL., C.A. No. 1:15-06853

FOUTS v. BANK OF NOVA SCOTIA, NEW YORK AGENCY, ET AL., C.A. No. 1:15-06892

EMPLOYEES RETIREMENT SYSTEM OF RHODE ISLAND, ET AL. v. BANK OF NOVA SCOTIA, NEW YORK AGENCY, ET AL., C.A. No. 1:15-07006

CITY OF ATLANTA 'FIREFIGHTERS’ PENSION FUND v. BANK OF OVA SCOTIA, NEW YORK AGENCY, ETAL., C.A. No. 1:15-07111

VARNER v. BANK OF’ NOVA SCO-TIA, NEW YORK AGENCY, ET AL., C.A. No. 1:15-07325

[1364]*1364FRANKLIN, ET AL. v. BANK OF NOVA SCOTIA, NEW YORK AGENCY, ET AL., C A. No. 1:15-07329

LABORERS LOCAL 100 AND 397 HEALTH AND WELFARE FUND, ET AL. v. BANK OF NOVA SCOTIA, NEW YORK AGENCY, ET AL., C.A. No. 1:15-07385

BANK OF JERUSALEM, LTD. v. BANK OF NOVA SCOTIA, NEW YORK AGENCY, ET AL., C.A. No. 1:15-07390

ALASKA ELECTRICAL PENSION FUND v.

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TRANSFER ORDER

Sarah S. Vance, Chair

Before the Panel:

* Plaintiffs in two actions in the Southern District of New York move under 28 U.S.C. § 1407 to centralize this litigation in that district. This litigation currently consists of 25 actions pending in three districts, as listed on Schedule A. Since the filing of the motion, the Panel has been notified of 14 related actions.¹ The actions allege that over 20 defendant banks conspired to manipulate Treasury securities auctions overseen by the Federal Reserve Bank of New York, as well as the market for derivative financial products.²

All responding plaintiffs and defendants support centralization, but they disagree [1362]*1362on the transferee district. Plaintiffs in 23 actions on the motion and four potential tag-along actions support centralization in the Southern District of New York. This district also has the unanimous support of the defendants. Plaintiffs in the Northern District of Illinois action- on the motion, one Southern District of New York action (Varner), and three potential tag-along actions request the Northern District of Illinois.

On the basis of the papers filed and the hearing session held, we find that these actions involve common questions of fact, and that centralization will serve the convenience of the parties and witnesses and promote the just and efficient conduct of this litigation. These actions share common factual questions arising out of allegations that over 20 financial institutions, referred to as primary dealers,- conspired to manipulate the pricing of (1) U.S. Treasury securities (Treasury bills, notes, bonds, and related debt instruments) at Treasury auctions overseen by the Federal Reserve Bank of New York; and (2) derivative financial products, such as Treasury futures and options, that are based on or otherwise tied to the price of Treasury securities. In particular, all actions allege that the manipulation of pricing information by defendants'occurred in the “when issued” market — the pre-auction period between, the date the Federal Reserve Bank of New York announces the details of an upcoming auction and the date the new securities are issued. Discovery is likely to involve numerous third parties, including the Federal Reserve Bank of New York, the New York Department of Financial Services, and former primary dealers of Treasury securities and their employees. Additionally, all actions are on behalf of overlapping putative nationwide classes of persons and entities who transacted in Treasury' securities, derivatives, and financial products linked to the interest rates of Treasury securities, and assert claims under the' Sherman Act and the Commodity Exchange Act. Centralization will eliminate duplicative discovery; prevent inconsistent pretrial rulings, including with respect to class certification; and conserve the resources of the parties, their counsel and the judiciary.

We conclude that the Southern District of New York is the appropriate transferee district for this litigation. Nearly all defendants have their U.S. headquarters in or near New York or conduct their operations concerning Treasury securities there. The Federal Reserve Bank of New York, which oversees the Treasury auctions at issue, also is located in this district. Moreover, the vast majority of actions are pending in this district. Judge Paul G. Gar-dephe, who presides over 30 actions in that district, is an experienced transferee judge. We are confident he will steer this litigation on a prudent course.

IT IS THEREFORE ORDERED that the actions listed on Schedule A and pending outside the Southern District of New York are transferred to the Southern District of New York and, with the consent of that court, assigned to the Honorable Paul G. Gardephe for coordinated or consolidated pretrial proceedings.

SCHEDULE A

MDL No. 2673 — IN RE: TREASURY SECURITIES AUCTION ANTITRUST LITIGATION

Northern District of Illinois

THE POLICE RETIREMENT SYSTEM OF ST. LOUIS v. BANK OF [1363]*1363NOVA SCOTIA, NEW YORK AGENCY, ET AL., C.A. No. 1:15-08417

Southern District of New York

STATE-BOSTON RETIREMENT SYSTEM v. BANK OF NOVA SCOTIA, NEW YORK AGENCY, ET AL., C.A. No. 1:15-05794

BEAVER COUNTY EMPLOYEES’ RETIREMENT FUND, ET AL. v. BANK OF NOVA SCOTIA, NEW YORK AGENCY, ET AL., C.A. No. 1:15-05807

ARKANSAS TEACHER RETIREMENT SYSTEM v. BANK OF NOVA SCOTIA, NEW YORK AGENCY, ET AL., C.A. No. 1:15-05830

FEDERIGHI v. BANK OF NOVA SCOTIA, NEW YORK AGENCY, ET AL., C.A. No. 1:15-05843

UNITED FOOD AND COMMERCIAL WORKERS UNION AND PARTICIPATING FOOD INDUSTRY EMPLOYERS TRI-STATE PENSION FUND v. BANK OF NOVA SCOTIA, NEW YORK AGENCY, ET AL., C.A. No. 1:15-05931

INTER-LOCAL PENSION FUND GRAPHIC COMMUNICATIONS CONFERENCE OF THE INTERNATIONAL BROTHERHOOD OF TEAMSTERS v. BANK OF NOVA SCOTIA, NEW YORK AGENCY, ET AL., C.A. No. 1:15-05939

UNITED INTERNATIONAL INSURANCE COMPANY v. BANK OF NOVA SCOTIA, NEW YORK AGENCY, ET AL., C.A. No. 1:15-05957

IBEW LOCAL 640 ARIZONA CHAPTER NECA PENSION TRUST FUND v. BMO CAPITAL MARKETS CORP., ET AL., C.A. No. 1:15-06003

CITY OF PONTIAC POLICE AND FIRE RETIREMENT SYSTEM, ET AL. v. BANK OF NOVA SCOTIA, NEW YORK AGENCY, ET AL., C.A. No. 1:15-06072

RUTGERS ENHANCED INSURANCE COMPANY v. BANK OF'NOVA SCOTIA, NEW YORK AGENCY, ET AL., C.A. No. 1:15-06129

ST. JOHN v. BANK OF NOVA SCO-TIA, NEW YORK AGENCY, ET AL., C.A. No. 1:15-06139

OKLAHOMA FIREFIGHTERS PENSION AND RETIREMENT SYSTEM v. BANK OF NOVA SCOTIA, NEW YORK AGENCY, ET AL., C.A. No. 1:15-06474

CLEVELAND BAKERS AND TEAMSTERS PENSION FUND, ET AL. v. BANK OF NOVA SCOTIA, NEW YORK AGENCY, ET AL., C.A. No. 1:15-06782

UNITED FOOD AND COMMERCIAL WORKERS LOCAL 1776 & PARTICIPATING EMPLOYERS PENSION FUND v. BANK OF NOVA SCOTIA, NEW YORK AGENCY, ET AL., C.A. No. 1:15-06853

FOUTS v. BANK OF NOVA SCOTIA, NEW YORK AGENCY, ET AL., C.A. No. 1:15-06892

EMPLOYEES RETIREMENT SYSTEM OF RHODE ISLAND, ET AL. v. BANK OF NOVA SCOTIA, NEW YORK AGENCY, ET AL., C.A. No. 1:15-07006

CITY OF ATLANTA 'FIREFIGHTERS’ PENSION FUND v. BANK OF OVA SCOTIA, NEW YORK AGENCY, ETAL., C.A. No. 1:15-07111

VARNER v. BANK OF’ NOVA SCO-TIA, NEW YORK AGENCY, ET AL., C.A. No. 1:15-07325

[1364]*1364FRANKLIN, ET AL. v. BANK OF NOVA SCOTIA, NEW YORK AGENCY, ET AL., C A. No. 1:15-07329

LABORERS LOCAL 100 AND 397 HEALTH AND WELFARE FUND, ET AL. v. BANK OF NOVA SCOTIA, NEW YORK AGENCY, ET AL., C.A. No. 1:15-07385

BANK OF JERUSALEM, LTD. v. BANK OF NOVA SCOTIA, NEW YORK AGENCY, ET AL., C.A. No. 1:15-07390

ALASKA ELECTRICAL PENSION FUND v. BANK OF NOVA SCOTIA, NEW YORK AGENCY, ET AL., C.A. No. 1:15-07420

ENDEAVOR TRADING, LLC v. BANK OF NOVA SCOTIA, NEW YORK AGENCY, ET AL., C.A. No. 1:15-07481

District of Virgin Islands

EMPLOYEES’ RETIREMENT SYSTEM OF THE GOVERNMENT OF THE VIRGIN ISLANDS v. BANK OF NOVA SCOTIA, NEW YORK AGENCY, ET AL., C.A. No. 1:15-00055

Judge Marjorie O. Rendell, Judge Lewis A. Kaplan, and Judge Ellen Segal Huvelle took no part in the decision of this matter. Additionally, certain Panel members who could be members of the putative classes in this litigation have renounced their participation in these clásses and have participated in this decision.

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148 F. Supp. 3d 1360, 2015 U.S. Dist. LEXIS 166046, 2015 WL 8542505, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-treasury-securities-auction-antitrust-litigation-jpml-2015.

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