Deutsche Bank defeats class certification in interest rate swaps antitrust litigation

Client(s) Deutsche Bank

Jones Day client Deutsche Bank prevailed in its efforts to defeat class certification in the In re Interest Rate Swaps Antitrust Litigation matter in the Southern District of New York. Relying on a combination of expert and fact evidence assembled by the Jones Day team and other members of a multi-bank joint defense group, Judge Oetken held that a class could not be certified because individual issues would predominate over common ones. The allegations in the case are that Deutsche Bank and other investment banks conspired to prevent the exchange trading of interest rate swaps in favor of over-the-counter trading. Plaintiffs allege that the goal of the conspiracy was for banks to preserve high spreads (the difference between what a swap sells for vs. what a counterparty is willing to pay to buy the same swap) in the over-the-counter market. However, in denying plaintiffs’ class certification motion, Judge Oetken credited defendants’ evidence that as a result of individualized over-the-counter relationships, many customers transacted at zero, or in some cases even negative, spreads. The court also rejected plaintiffs' arguments that their experts' regression model was capable of correcting for, or even identifying, these individual relationships and transactions.

In re Interest Rate Swaps Antitrust Litigation, Case No. 16-MD-2704 (JPO) (S.D.N.Y.)