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Thursday, June 8, 2017 - US lawsuit accuses 12 big banks of CDS collusion
Tera Exchange
Source -
Where - United States of America
Business line - Trading and Sales

A trading exchange has filed an antitrust lawsuit against 12 major banks for allegedly conspiring to push it out of the credit default swap market.

Tera Group, a small trading exchange, says the banks colluded to organise a boycott of its TeraExchange platform, refusing to use it for CDS transactions and trades despite customers wanting to do so.

It also claims the banks used their power as holders of 95% of the market to enforce a trading protocol known as “request for quote” which enabled the banks to hold back information from traders about prices. This, Tera claims, went against the aims of the 2010 Dodd-Frank Act. It also accuses the banks of creating “great fear of retaliation” in traders who defected to rival platforms.

“Faced with Dealer Defendants' unyielding boycott, TeraExchange has been shut out of the CDS market,” the group said in its complaint.

The banks involved are Bank of America, Citigroup, JPMorgan, Barclays, BNP Paribas, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, Morgan Stanley, Royal Bank of Scotland and UBS.

Tera sued the same 12 banks in April 2016 claiming they conspired to block interest rate swaps customers from trading on its platform. This and three other related lawsuits are still pending.