FRT Insights


Proposed Class Action for ‘Odd-Lot’ U.S. Corporate Bonds Offers Promise of Future Antitrust Payouts

Antitrust litigation shows no sign of slowing down. In Q1 2020 alone, FRT filed claims in three antitrust case settlements including FX Canada – CAD $109.8m (read our case spotlight), GSE Bonds – $49.5m (read our case update), and Euroyen $71m (read our case update) for some of the largest asset managers and asset owners in the world, as well as hundreds of other clients.

On April 21, a proposed class action brought against ten of the world’s largest banks, including JP Morgan Chase and Bank of America, accuses them of overcharging retail investors for “odd-lot” trades. Such trades are worth less than $1 million dollars and make up 90% of corporate bond trading.

According to the suit, the accused banks have conspired to charge individual investors higher buying prices and to pay them less when they sell, increasing the banks’ revenue through unfair means. It suggests that the megabanks have actively suppressed the democratization new bond trading technologies could otherwise offer.

While the individual trades are relatively less money, the dramatic increase in the number of such odd-lot trades over the past decade and the price inflation, some as much as 300%, could result in a significant payout. The suit says, “plaintiff reasonably believes the potential damages to investors during the relevant time period could amount to billions of dollars of damages caused by defendants’ anticompetitive practices.”

At this point, no action is required, but this lawsuit may herald future settlements.

Click here to read the Law360 article (subscription required). Click here to read the Reuters article.

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This communication and the content found by following any link herein are being provided to you by Financial Recovery Technologies (FRT) for informational purposes only and does not constitute advice. All material presented herein is believed to be reliable but FRT makes no representation or warranty with respect to this communication or such content and expressly disclaims any implied warranty under law. Opinions expressed in this communication may change without prior notice. Firms should always seek legal and financial advice specific to their unique situation and objectives.

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