Shareholder Resource Center: Stock Lending

FRT has been actively monitoring the ongoing Stock Lending Antitrust Litigation. The court has preliminarily approved two partial settlements totaling $580 million.

With a filing deadline of July 8, 2024, investors should begin gathering the necessary data today given the scope of this case and its lengthy class period.

Chris Looby, FRT’s Global Head of Antitrust Services, has been actively discussing this case with our clients and shares key takeaways from those conversations below:

Important filing considerations:

• We expect claims filing to be particularly challenging for this case because the proof of claim form requires records representing loan activity, including non-standard fields such as counterparty identification, the value of any posted collateral, and determining whether transaction loan costs were expressed as a rebate or fee.
• This information is unlikely to be available via standard custodian reporting. In all likelihood, investors will need to approach their lending agents directly as outlined in our private querying memo.
• It is important to distinguish the “lending agent” – the intermediary facilitating a stock loan – from the “counterparty” in the transaction. These two entities can be the same but are often different. FRT’s antitrust team has specific recommendations around filtering potentially eligible data based on the identity and location of these two organizations.
• Non-US domiciled claimants will be required to establish a nexus between their stock loan transaction and the US. We defer to the class description, which indicates that eligible claimants must have “entered into loan transactions with any of the Prime Broker Defendants in the United States”. Our team also has specific recommendations for investors based on their counterparty’s status under the stock lending suit, as well as where your organization, lending agent, or counterparty is based.
• Investors headquartered outside of the U.S., particularly those where the loan counterparty is not U.S.-based or is not a named defendant, may face more significant hurdles in demonstrating this nexus.