2015-09-13nytimes.com

Twelve major banks have tentatively agreed to pay $1.87 billion to settle allegations that they colluded to fix prices and lock out competitors in the market for insurance-like products widely traded before the financial crisis, according to a lawyer for investors.

Bank of America, JPMorgan Chase, Citigroup and other banks met secretly to kill proposals that would put the trading of these insurance-like products onto an exchange through which they could be bought and sold like stocks and their prices made more transparent, according to a complaint filed in U.S District Court in New York. In keeping trading private in a "rigged" market, the banks cheated investors out of billions of dollars, the complaint alleges.

...

Another defendant in the suit, the International Swaps and Derivatives Association, said in a statement that it is "pleased" that the case is close to resolution and that it is "committed to further developing CDS market structure to ensure the market functions safely and efficiently."

...

Credit default swaps figured prominently in the financial crisis, notably in the near-collapse of American International Group, a giant insurer that sold protection to investors in home mortgages but couldn't pay out on the policies when the housing market crashed. AIG eventually received $182 billion in a government bailout.



Comments: Be the first to add a comment

add a comment | go to forum thread