MF Global Capital LLC sued Bank of America Corp., Citigroup Inc. and nine other financial companies, claiming that they were part of a plot to unlawfully restrict the market for trading credit-default swaps, Bloomberg News reported yesterday. The complaint, filed by a unit of bankrupt MF Global Holdings Ltd. yesterday in federal court, is at least the fourth such suit accusing swaps dealers of conspiring to control the market for information about the instruments and their trading, in violation of federal antitrust laws. “The effect of these activities has been to decrease competition in the CDS market among defendants,” according to the complaint. “As a result, defendants’ customers were forced to pay inflated bid/ask spreads, which cushion the profits of the defendants while harming their CDS customers.” Damages sustained by the MF Global unit and other members of a proposed class of individuals and entities that bought or sold swaps from the defendants since October 2008 are estimated to be in the tens of billions of dollars, according to the filing.
