The class-action lawsuit that was filed against nine big banks, accusing them of rigging the U.S. Treasury bond market, has been dismissed. Per the suit, the malpractices by the banks were carried out between 2005 and 2015.
Investors for supranational, sub-sovereign and agency bonds - called the SSA bonds, sued nine big banks in 2016, saying that traders at these banks collaborated with each other to manipulate auctions.
However, in a ruling that was made public recently, U.S. District Judge Edgardo Ramos said in Manhattan that the investors failed to provide any evidence of how the apparent collusion forced them to pay higher prices. Hence, he dismissed the lawsuit.
While the plaintiffs showed Ramos nearly 150 chats in which these bankers and some other counterparties allegedly discussed manipulating transactions, he refused to consider those chats as valid evidence.
Ramos informed, "This, by itself, is insufficient for the court to reasonably draw such an inference."
Nevertheless, Ramos has given a second chance to the investors by saying that the plaintiffs are allowed to file a new complaint, with more detailed and specific allegations.
In fact, Dan Brockett, a lawyer for the investors, has stated that his clients are planning on filing an amended complaint.
Notably, this dismissal by Ramos does not affect Deutsche Bank AG and Bank of America Corporation's agreement to pay $48.5 million and $17 million, respectively, in order to settle the claims, which Ramos approved in March.
The banks have not made any comment on the decision yet.
Apart from Barclays, HSBC and Deutsche Bank, all of the above-mentioned banks currently have a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
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