In re J.P. Morgan Chase (Municipal Bond Derivatives)
Starting in 2008, the states investigated the municipal bond derivatives market, where tax exempt entities like governments and nonprofit organizations issue bonds and reinvest the proceeds until the funds are needed or enter into contracts to hedge interest rate risk on bonds.
The investigation revealed conspiratorial and fraudulent conduct involving individuals at JPMC, other financial institutions, and certain brokers with whom they had working relationships. The states alleged that certain JPMC employees and their counterparts at other institutions rigged bids, submitted noncompetitive courtesy bids and fraudulent certificates of arms-length bidding to government agencies. The misconduct led state and local entities, such as municipalities, counties, school districts and other government agencies, as well as nonprofits, to enter into municipal derivatives contracts on less advantageous terms than they would have otherwise. The $66.5 million multistate settlement is one component of a coordinated settlements (totaling $92 million) between JPMC and the U.S. Department of Justice’s Antitrust Division, the Securities and Exchange Commission (SEC), the Internal Revenue Service, the Office of the Comptroller of the Currency (OCC), as well as the states.
IN the matter of Wachovia
Wachovia and its successor, Wells Fargo, settled charges by 25 states and several federal agencies (the Securities and Exchange Commission (SEC), the Office of the Comptroller of the Currency (OCC), the Internal Revenue Service (IRS) and the Federal Reserve) that it participated in a nationwide scheme to allegedly rig bids and engage in other anticompetitive conduct relating to municipal bond derivatives that defrauded state agencies, local governmental entities and not-for-profit entities. The multistate settlement is part of a $148 million settlement Bank of America entered into simultaneously with the federal agencies.
U.S. and Plaintiff States v. Marquee Holdings, No. 05 CV 10722 (S.D.N.Y. 2005)
US DOJ and plaintiff states filed a complaint alleging that the merger of AMC Entertainment and Loews Cineplex Entertainment would eliminate head-to-head competition between AMC and Loews and likely would have resulted in higher prices for tickets to first-run, commercial movies in sections of five major American cities: Boston, Chicago, Dallas, New York, and Seattle. DOJ and the plaintiff states agreed to a consent decree to resolve the complaint. Under the terms of the consent decree, AMC and Loews must divest movie theaters: two in Chicago and one each in New York, Boston, Seattle and Dallas. The parties must inform the parties if it proposes to acquire movie theater assets in those markets over the next 10 years.
Missouri v. AU Optronics Corp., (N.D. Cal. pending transfer to MDL 1827, 2010)
Following guilty pleas to criminal price-fixing by several LCD manufacturers, and a conviction after trial of another, plaintiff states filed suit against LCD manufacturers, alleging that top executives of several companies held numerous secret meetings from at least 1999 through at least 2006 for the purpose of exchanging information and setting prices on LCD panels. According to the complaint, companies such as Dell, Apple, and Hewlett Packard were among those targeted by the manufacturers’ price-fixing scheme. According to the lawsuit, the illegal overcharges were ultimately borne by state consumers and state government purchasers. The suit also alleges fraudulent concealment of the conspiracy. The lawsuit seeks monetary damages, civil penalties and injunctive relief under the Sherman Act and state antitrust statutes. The first settlement covered Chimei Innolux, Chimei Optoelectronics, Hannstar, Hitachi, Samsung, and Sharp and their subsidiaries. The second settlement, for $543.5 million, was with AU Optronics, Toshiba and LG Display and subsidiaries.
New York v. AU Optronics
Plaintiff state filed an antitrust action against several major technology companies for
illegally fixing prices for liquid crystal display (“LCD”) screens used in computers, televisions, and cell phones. The lawsuit seeks to recover damages suffered from 1996 to 2006 by New
York State and other public purchasers – local governments, schools, hospitals,
and colleges, among others – that purchased computers and other goods containing the price-fixed screens. The suit seeks damages, restitution, and civil penalties. Consolidated with other litigation in an MDL in the Northern District of California. See Missouri v. AU Optronics
People v. Tempur-Pedic, No. (N.Y. Sup. Ct., NY Cty. Mar. 29, 2010)
State filed suit against Tempur-Pedic, a mattress manufacturer, alleging resale price maintenance. The state did not sue under its antitrust statute, but rather under N.Y. Gen. Bus. Law § 369(a). The State alleged that Tempur-Pedic’s Retail Partner Agreement restrained discounting in a variety of ways. the trial court held that the state’s General Business law did not make resale price maintenance illegal, but only made contractual provisions embodying resale price maintenance uneforceable.
New York v. Long Island Taxi and Transportation Owners Ass’n, No. 88-1089 (E.D.N.Y. 1989)
State sued business and individual defendants, alleging fixing of prices on spaces for taxicabs at rail stations on Long Island; fixing rates on taxi services; rigging bids on contracts for taxi services and allocating territories among themselves. Settlement included injunctive relief and $10,000 civil penalty for each business defendant.
New York et al. v. Herman Miller, Inc. (
Three states alleged Herman Miller (HMH) sought to raise and maintain retail prices on its “AERON” chairs. According to the complaint, HMH responded to complaints and urging by HMH’s retailers, beginning in 2001, by establishing and announcing minimum prices, below which retailers were prohibited from advertising any HMH furniture. Under HMH’s Suggested Retail Price policy, HMH retailers had to agree with HMH not to advertise below HMH’s dictated prices for Aeron chairs in any medium where prices can be seen by consumers. HMH was enjoined from using the SRP program for two years,and from telling dealers how much to sell their chairs for. HMH paid $750,00 to the plaintiff states.
Richardson v. Akzo Nobel (In re Vitamins Antitrust Litigation), 1:09-cv-02112-TFH(D.D.C. 2009)
As part of a private class action lawsuit, states, as parens patriae for their citizens, reached a settlement with vitamin manufacturers accused of fixing prices on certain vitamins (The vitamins affected by this alleged price fixing conspiracy are: vitamin A,
astaxanthin, vitamin B1 (thiamin), vitamin B2 (riboflavin), vitamin B3 (niacin), vitamin B4 (choline chloride), vitamin B5 (calpan), vitamin B6, vitamin B9 (folic acid), vitamin B12 (cyanocobalamine pharma), betacarotene, vitamin C, canthaxanthin, vitamin E, and vitamin H (biotin), as well as all blends and forms of these vitamins) sold purchased between 1988 and 2000. This case is related to the case New York et al. v. Hoffmann-LaRoche, Inc.,et al. with different defendants.
New York by Cuomo v. Intel Corporation, No. 09-827(JJF) (D. Del. Nov. 4, 2009)
State of New York filed a federal antitrust suit against Intel Corporation charging that Intel engaged in a worldwide, systematic campaign of illegal conduct – revealed in e-mails – in order to maintain its monopoly power and prices in the market for microprocessors. The complaint alleged that over the last several years, Intel has extracted exclusive agreements from large computer makers in which they agreed to use Intel’s microprocessors in exchange for payments totaling billions of dollars. Intel also threatened to and did in fact punish computer makers that they perceived to be working too closely with Intel’s competitors. Retaliatory threats included cutting off payments the computer maker was receiving from Intel, directly funding a computer maker’s competitors, and ending joint development ventures. According to the complaint, to obtain exclusive agreements, Intel paid hundreds of millions of dollars annually in so-called “rebates†to individual computer makers. These rebates were actually just payoffs with no legitimate business purpose that Intel invented to disguise their anticompetitive nature. Sometimes, the payments from Intel exceeded a company’s reported quarterly net income. Intel’s pressure on computer makers to guarantee it specified market shares of their sales prevented computer makers from responding to consumer demand. The state sought to bar further anticompetitive acts by Intel, restore lost competition, recover monetary damages suffered by New York governmental entities and consumers, and collect penalties. Intel’s various motions to dismiss were granted, greatly reducing the scope of the state’s case. The parties settled in 2012. New York dismissed the action with prejudice and agreed to terminate its investigation. Intel did not admit wrongdoing and did not change its business practices, but agreed to pay $6.7 million in costs.
