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Plaintiffs press full 2nd Circuit to revisit bond-rigging ruling

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The Citigroup Inc (Citi) logo is seen at the SIBOS banking and financial conference in Toronto, Ontario, Canada October 19, 2017. REUTERS/Chris Helgren

  • Plaintiffs' lawyers at Quinn Emanuel and Robbins Geller argued panel set "extraordinarily strict pleading requirements"
  • Head of Skadden's antitrust team had called the conspiracy claim "impossibly vast"

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(Reuters) - A team of lawyers representing investors has urged the 2nd U.S. Circuit Court of Appeals in New York to reconsider a panel decision that upheld the dismissal of antitrust claims against a slew of big banks accused of participating in a conspiracy to rig prices in the government agency bond market.

The plaintiffs' lawyers at Quinn Emanuel Urquhart & Sullivan and Robbins Geller Rudman & Dowd said the July 19 ruling from Circuit Judges Dennis Jacobs, Denny Chin and William Nardini set a pleading bar too high requiring an "all-or-nothing" approach.

The lawyers on Monday asked the 2nd Circuit for en banc review or, alternatively, panel rehearing, saying the panel decision could broadly harm private antitrust enforcement if left in place.

They are challenging the panel's unanimous ruling that said their "extremely wide net" made it implausible that all the bank entities, including Citigroup Inc and Credit Suisse AG, and traders participated in a seven-year conspiracy.

The complaint said traders colluded to fix prices in the market for U.S. dollar-denominated supranational, sub-sovereign and agency (SSA) bonds. Government and government-related entities issue SSA bonds to support public-policy and other economic mandates.

The plaintiffs, including the Alaska Department of Revenue and the Iron Workers Pension Plan of Western Pennsylvania, said Monday they've provided enough information to keep alive their claims, which were first filed in 2016 in Manhattan federal district court.

"In adopting extraordinarily strict pleading requirements, the panel decision threatens to obstruct private antitrust enforcement, especially in multi-trillion dollar financial markets," Quinn Emanuel partner Daniel Brockett and Joseph Daley, a partner at Robbins Geller, wrote in their petition.

Brockett, chairman of Quinn Emanuel's financial institution litigation practice, declined to comment on Tuesday, as did a spokesperson for Citigroup.

Karen Lent, head of the antitrust group in New York at Skadden, Arps, Slate, Meagher & Flom, representing Citigroup and other bank defendants, told the appeals panel at oral argument in May that the plaintiffs had alleged an "impossibly vast conspiracy – 30-plus bank entities, some domestic, some foreign, working as a unitary superdesk, all day, every day, for seven years."

The plaintiffs asserted electronic chat messages and statistical analysis reveal a conspiracy from 2009 to 2015 in which traders at big banks colluded to artificially lower the price at which they bought SSA bonds from consumers, or artificially boosted the price at which the bonds were sold.

The plaintiffs' lawyers said the 2nd Circuit panel decision "impermissibly" required the investors "to match specific transactions to specific chat-evidence to plausibly" plead an antitrust injury.

The complaint "combines nearly 200 smoking-gun trader chats with statistical analyses of 1.8 million datapoints," the plaintiffs' team said in Monday's filing. "If such a complaint does not plausibly plead an antitrust conspiracy, it is difficult to imagine what would."

The case is In Re: SSA Bonds Antitrust Litigation, 2nd U.S. Circuit Court of Appeals, No. 20-1759.

For the plaintiffs: Daniel Brockett of Quinn Emanuel Urquhart & Sullivan and Joseph Daley of Robbins Geller Rudman & Dowd

For Citigroup Inc: Karen Lent of Skadden, Arps, Slate, Meagher & Flom

For Credit Suisse AG: David Januszewski of Cahill Gordon & Reindel

Read more:

Big Banks win dismissal in U.S. of bond rigging lawsuit

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