Credit Suisse pays $81mn to end lending-stock suit

Bloomberg

Credit Suisse will pay $81 million to resolve a lawsuit by some US pension funds over control of the more than $1 trillion market for stock lending and agreed to help with similar cases pending against other banks.
It’s the first settlement of a class-action lawsuit filed in 2017 alleging a group of major banks blocked development of all-electronic trading systems that match lenders and borrowers of stock used for short sales.
Pension plans including the Iowa Public Employees Retirement System claimed banks including Credit Suisse, Goldman Sachs and JPMorgan schemed to protect their profits from a less-efficient over-the-counter system by boycotting trading platforms that would eliminate them as middlemen.
and improve price transparency and competition.
“While we continue to believe that the plaintiffs’ case against Credit Suisse cannot be certified as a class action and that the plaintiffs’ claims are without merit, we are pleased to resolve the litigation,” Simone Meier, a spokeswoman for the bank, said in an email.
In a short sale, traders sell borrowed stock, anticipating the price will drop so they can profit by buying back the shares at a lower price. Banks typically locate shares that trading clients are looking to short and then loan them the stock, usually through their prime brokerage units.