It was inevitable that the collapse of the $300 billion auction-rate securities market in 2008 would trigger securities litigation. And it did, though without giving the plaintiffs bar all that much to show for it. But the ARS freeze also spawned a massive antitrust case, after a trio of plaintiffs firms cooked up a theory that the market’s demise was triggered by an illegal boycott by major banks.
The plaintiffs lawyers’ creativity hasn’t been rewarded. The U.S. Court of Appeals for the Second Circuit on March 5 affirmed a prior decision dismissing the case, ruling that the putative class of ARS purchasers and issuers failed to piece together a viable antitrust case. The ruling is a win for 11 banks, including UBS AG and Citigroup Inc., and a slew of defense lawyers led by Jonathan Youngwood of Simpson Thacher & Bartlett.
