by Howard Haykin

A case was filed Thursday in the U.S. District Court for the Southern District of New York by 3 pension plans against 6 global banks and one stock-lending platform. The defendants stand accused of acting together since 2009 to block competition in the stock lending market.

PLAINTIFFS.

• Iowa Public Employees' Retirement System
• Orange County Employees Retirement System
• Sonoma County Employees' Retirement Association

DEFENDANTS.

• Bank of America Corp
• Credit Suisse Group
• Goldman Sachs Group
• JPMorgan Chase
• Morgan Stanley
• UBS Group 
• EquiLend (a NY-based stock lending platform that, according to its website, is owned by bankings including the 6 defendants)

According to Cohen Milstein partner Michael Eisenkraft, who represents the pension funds: “Through various improper means, the likes of Goldman Sachs and Morgan Stanley have for years colluded to maintain their power over this little-known-but-lucrative corner of Wall Street." By colluding, the lawsuit claims, the banks have effectively crowded out smaller upstart stock lending platform, like AQS and SL-x, which in turn forced investors and retirees to pay high fees to engage in stock lending. For example, in 2012 Goldman Sachs allegedly threatened to stop doing business with BNY Mellon if it continued to support the AQS platform - which it did.