If You Purchased Municipal Derivatives from January 1, 1992 to the Present, You Could Get a Payment from a Class Action Settlement with Morgan Stanley.
A class action settlement has been reached with Morgan Stanley (“Morgan Stanley”) in a class action lawsuit against Morgan Stanley and other defendants (collectively “Defendants”) in the United States District Court for the Southern District of New York (styled In re Municipal Derivatives Antitrust Litigation) alleging, among other things, that the Defendants violated federal antitrust laws by conspiring to fix, maintain or stabilize the price of municipal derivatives and by rigging bids and allocating customers and markets for municipal derivatives (i.e., financial products used by issuers of tax-exempt municipal bonds such as states, cities, counties, or their agencies, or by tax-exempt, non-profit private entities, to invest the money received from bond offerings while they are waiting to spend it), including Guaranteed investment contracts, Interest-rate swaps, Options, “Swaptions” (a combination of a swap and an option) and Interest-rate floors, according to the Morgan Stanley Municipal Derivatives class action settlement notice.
The Defendants and Co-Conspirators in the Municipal Derivatives class action fall into two groups: (1) “Provider Defendants” and “Provider Co-Conspirators,” which are financial institutions that provided the municipal derivatives sold to members of the Class, and (2) “Broker Defendants” and “Broker Co-Conspirators,” which are companies that brokered the sales of municipal derivatives:
Provider Defendants
- Morgan Stanley
- Bank of America, N.A.
- Bear Stearns & Co., Inc.
- JP Morgan Chase & Co.
- National Westminster Bank Plc
- Natixis Funding Corp. (f/k/a IXIS Funding Corp. and CDC Funding Corp.)
- Piper Jaffray & Co.
- Societe General SA
- Wachovia Bank N.A.
- UBS AG
- Wells Fargo & Co., Inc.
Provider Co-Conspirators
- AIG Financial Products Corp.
- Financial Security Assurance Holding Ltd.
- Financial Security Assurance Inc.
- GE Funding Capital Market Services, Inc.
- Lehman Brothers
- SunAmerica Life Assurance Co.
- Trinity Funding Co. LLC
- XL Capital Asset Funding Co. LLC
- XL Life Insurance & Annuity, Inc.
Broker Defendants
- CDR Financial Products
- George K. Baum & Co.
- Investment Management Advisory Group, Inc.
- Natixis Funding Corp. (f/k/a IXIS Funding Corp. and CDC Funding Corp.)
- Piper Jaffray & Co., Inc.
- Sound Capital Management, Inc.
- Winters & Co. Advisors, LLC
Broker Co-Conspirators
- Feld Winters Financial LLC
- First Southwest Company
- Kinsell Newcomb & De Dios Inc.
- Mesirow Financial
- Morgan Keegan & Co., Inc.
- PackerKiss Securities Inc.
Included in the Morgan Stanley Municipal Derivatives Settlement Class are state, local, or municipal government entities, independent government agencies, and private entities that purchased municipal derivatives through negotiation, competitive bidding, or auction:
- Directly from any Provider Defendant or Co-Conspirator or through any Broker Defendant or Co-Conspirator;
- At any time from January 1, 1992 through the present; and
- In the United States and its territories or for delivery in the United States and its territories.
Morgan Stanley has reportedly paid a settlement amount of $4,950,000 plus an additional $1,550,000 to be applied toward the cost of providing notice of the Settlement to the Settlement Class, other costs for administering the Settlement, taxes, and any litigation expenses that the Court may award to Class Counsel in the future. Morgan Stanley will also reportedly cooperate with the Class Representatives in the litigation that will continue against the other Defendants. This cooperation will include meeting with Class Counsel and providing documents, electronic data, employee interviews, affidavits, depositions, and trial testimony if requested by Class Counsel.
The Court has scheduled a Fairness Hearing on November 23, 2011, at 9:30 a.m. at the United States District Court for the Southern District of New York, 500 Pearl Street, New York, NY 10007-1312 at which time the Court will reportedly consider whether the Morgan Stanley Municipal Derivatives Settlement is fair, reasonable and adequate.
For more information on the Morgan Stanley Municipal Derivatives class action lawsuit settlement, visit the Morgan Stanley Municipal Derivatives class action settlement website:
www.MunicipalDerivativesSettlement.com
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