US stock market daily report (September 11, 2015, Friday)

To resolve investor claims that twelve major banks and a pair of Wall Street groups conspired to fix prices, restrain competition and conspired to prevent would-be competitors from entering the credit-derivatives market, the group agreed to a $1.865 billion settlement. The civil lawsuit was filed in a federal district court in New York and the hearing was before U.S. District Judge Denise Cote in Manhattan. At the hearing, the group of banks along with the Wall Street Groups are accused of colluding to block competing providers and exchange trading in credit-default swaps (CDS).

Court documents show the investor plaintiffs include the Los Angeles County Employees Retirement Association (LACERA), Salix Capital U.S. Inc. and the Essex Regional Retirement System.

Attorney for the investors, Daniel Brockett said Judge Cote gave both sides two weeks to iron out details before submitting a settlement for her preliminary approval. During an interview, Brockett said "We think it's historic. It's one of the largest antitrust class-action settlements and an extraordinary result for the class."

Defendants in the historical case include: Bank of America Corporation (BAC - NYSE), Barclays PLC (BARC.L - LSE), BNP Paribas SA (BNPP.PA), Citigroup Inc. (C - NYSE), Credit Suisse Group AG (CSGN.VX), Deutsche Bank AG (DBKGn.DE), Goldman Sachs Group, Inc. (GS - NYSE), HSBC Holdings Plc (HSBA.L), JPMorgan Chase & Co. (JPM - NYSE), Morgan Stanley (MS - NYSE), Royal Bank of Scotland Group Plc (RBS.L), UBS AG (UBSG.VX) as well as the International Swaps and Derivatives Association and Markit Ltd (MRKT.O), which provides credit derivative pricing services.

Credit-default swaps are insurance-like contracts that allow investors to buy protection to hedge against the risk that corporate or sovereign debt issuers will not meet their payment obligations. The Bank for International Settlements said the CDS market was $16 trillion at the end of 2014.

The case is in re: Credit Default Swaps Antitrust Litigation, U.S. District Court, Southern District of New York, No. 13-md-02476.

Contributed by Millennium Traders