Cases & Deals

Wells Fargo obtains dismissal of antitrust claims arising from trading of odd-lots of corporate bonds

Clients Wells Fargo Bank, National Association

Jones Day’s client, several Wells Fargo Bank, National Association affiliates, obtained dismissal of a putative antitrust class action alleging that more than a dozen horizontal competitors conspired to restrain the trade of odd-lots of corporate bonds in the secondary market.

The complaint alleged that retail investors paid significantly more for their “odd lot” purchases of corporate bonds than institutional investors did when acquiring “round lots.” Additionally, the complaint alleged a conspiracy to keep retail investors from being able to access electronic trading platforms. Defendants moved to dismiss the complaint, arguing, inter alia, plaintiffs failed to allege plausible facts to support an antitrust conspiracy and failed to detail how each defendant supposedly contributed to the alleged scheme. In responding to the defendants’ motion to dismiss, plaintiffs abandoned their price fixing claim, arguing only that the defendants had conspired to boycott electronic trading platforms for odd lot bond transactions.

U.S. District Court Judge Lewis J. Liman agreed with the defendants, noting in his order that the complaint is “ambiguous and unclear” about the nature of the alleged conspiracy to keep retail investors from accessing electronic trading platforms. Judge Liman also held that the investors’ claims are time-barred and that the investors have failed to plead antitrust standing. As a result, he dismissed the complaint with prejudice.

Litovich v. Bank Of America Corporation, et al., No. 1-20-cv-03154 (S.D.N.Y.)