What is the settlement class period for a GSE bond transaction?
If you entered into a GSE Bond Transaction with one or more Defendants from January 1, 2009 through and including January 1, 2019 ("Settlement Class Period"), you may be eligible to receive a payment from $29.5 million in settlements reached in In re GSE Bonds Antitrust Litigation, No. 1:19-cv-01704-JSR (S.D.N.Y). 2.
What is a GSE bond?
“GSE Bond” means any and each unsecured bond or debt instrument (i.e., senior debt, subordinated debt, and junior subordinated debt) regardless of currency or credit quality, issued by Federal National Mortgage Association, Federal Home Loan Mortgage Corporation, Federal Farm Credit Banks, and Federal Home Loan Banks.
What is the proposed stipulation of settlement with the GSE?
Pennsylvania State Treasurer Joe Torsella has announced the filing of a Proposed Stipulation of Settlement that will resolve the remaining claims against 12 financial institutions in a lawsuit alleging price-fixing of bonds backed by the government-sponsored enterprises (GSEs).
Are financial institutions required to acknowledge responsibility for the GSE bond settlement?
While the financial institutions are not required to acknowledge responsibility as part of the settlement, they agreed to establish an anti-trust compliance program related to the GSE bond market. The case is presently before the U.S. District Judge for the Southern District of New York.
SETTLING DEFENDANTS
Deutsche Bank, First Tennessee Bank (FTN), Barclays, BNP Paribas, Citigroup, Credit Suisse, Goldman Sachs, JP Morgan, Bank of America-Merrill Lynch, TD Bank, Nomura, HSBC, Cantor Fitzgerald, Societe Generale, Morgan Stanley, UBS
ELIGIBLE CLASS
All entities that entered into GSE Bond transactions (purchases and sales) with one or more of the Defendants or a direct or indirect affiliate, subsidiary, or division of a defendant during the class period.
ELIGIBLE INSTRUMENTS
All unsecured bond or debt instruments (such as senior, subordinated and junior subordinated debt) regardless of currency or credit quality, issued by Federal National Mortgage Association (Fannie Mae), Federal Home Loan Mortgage Corp. (Freddie Mac), Federal Farm Credit Banks, and Federal Home Loan Banks. (Estimated 59,800+ CUSIPS)
Preliminary Allegations
The complaint alleges that defendants thus colluded to manipulate prices in the secondary market to extract supra-competitive profits for themselves at the expense of Plaintiffs and Class members.
Case Summary
Class action on behalf of all persons or entities who transacted in Fannie Mae or Freddie Mac bonds (“FFBs”) during the period of at least January 1, 2009 through January 1, 2019 with a Defendant, where such persons or entities were domiciled in the United States or its territories.
MEMORANDUM AND ORDER
Between October 2019 and February 2020, the Court preliminarily approved five separate settlements between plaintiffs and defendants in the above-captioned action. The settlements were between plaintiffs and 1) Deutsche Bank Securities, Inc. ("DB Settlement"); 2) First Tennessee Bank, N.A. and FTN Financial Securities Corp.
I. Motions for Approval of Settlements
In order to grant final approval of a proposed settlement under Federal Rule of Civil Procedure 23 (e) (2), the Court must find "that it is fair, reasonable, and adequate." The Court considers a number of factors laid out in Rule 23 (e) (2), as well as in City of Detroit v. Grinnell Corp., 495 F.2d 448, 463 (2d Cir.
III. Motion for Service Awards
Plaintiffs Birmingham, I.B.E.W., and Pennsylvania Treasury, have moved for awards totaling $400,000 for their service as class representatives in this Action. Pennsylvania Treasury seeks an award of $300,000 and Birmingham and I.B.E.W. each seek $50,000.
IV. Conclusion
At the preliminary approval stage the Court found that it was likely to approve the proposed settlements under Rule 23 (e) (2) and certify the class for purposes of judgment. Circumstances since preliminary approval have only confirmed that final approval and certification are warranted.
When did the GSE bond lawsuit start?
The financial institutions were sued in a class action filed in March 2019 that accused them of overcharging for GSE bonds between Jan. 1, 2009 to Jan. 1, 2019, with the goal of generating more profits for themselves.
Will the Fed raise interest rates if inflation continues to exceed expectations?
If inflation continues to exceed expectations, there is an increased risk The Fed will begin raising interest rates even earlier.
CASE SUMMARY
The Complaint alleges that Defendants and their unnamed co-conspirators engaged in a combination and conspiracy in an unreasonable and unlawful restraint of trade. During the Class Period, Defendants controlled the supply of Fannie and Freddie bonds (“FFBs available to investors and were horizontal competitors in the FFB market).
CLASS DEFINITION
On behalf of all persons and entities who or which entered into a GSE Bond Transaction with one or more Defendants or a direct or indirect parent, subsidiary, affiliate, or division of a Defendant during the Settlement Class Period.
PLAN OF ALLOCATION
The Plan of Distribution categorizes GSE Bond Transactions into 31 categories based on the remaining years until maturity when the bond was purchased, sold, or otherwise transacted.
