| NEW YORK, June 8
NEW YORK, June 8 A small trading exchange on
Thursday filed an antitrust lawsuit accusing Bank of America
Corp, Citigroup Inc, JPMorgan Chase & Co
and nine other banks of conspiring to shut it out of the $9.9
trillion credit default swap market.
Tera Group Inc accused the banks of coordinating a boycott
of its seven-year-old TeraExchange platform by refusing both to
send it any CDS transactions, and to clear and settle any CDS
trades that customers wanted to handle there.
It also said the banks used their 95 percent market share to
require that trading follow a protocol known as "request for
quote," which Tera described as opaque and inefficient.
Tera said this enabled banks to boost profit by keeping
traders in the dark about prices, defeating a goal of the 2010
Dodd-Frank financial reforms, while instilling a "great fear of
retaliation" against traders who defected to rival platforms.
"Faced with Dealer Defendants' unyielding boycott,
TeraExchange has been shut out of the CDS market," Tera said in
its complaint filed in Manhattan federal court.
Bank of America, Citigroup and JPMorgan, which the complaint
said control 40 percent of the CDS market, declined to comment.
Lawyers for Tera did not immediately respond to requests for
comment. Tera Group is based in Summit, New Jersey, while
TeraExchange is based in New York.
The other defendants are Barclays Plc, BNP Paribas
SA, Credit Suisse Group AG, Deutsche Bank AG
, Goldman Sachs Group Inc, HSBC Holdings Plc
, Morgan Stanley, Royal Bank of Scotland Group
Plc and UBS Group AG.
Tera is seeking unspecified damages, which would be tripled
if a violation of the Sherman Antitrust Act were found.
It sued the same 12 banks in April 2016 for allegedly
conspiring to block customers from trading interest rate swaps
on its platform.
That lawsuit was later combined with three similar lawsuits,
and that litigation remains pending, court records show.
Thursday's case is Tera Group Inc et al v. Citigroup Inc et
al, U.S. District Court, Southern District of New York, No.
17-04302. The interest rate swap case is In re: Interest Rate
Swaps Antitrust Litigation in the same court, No. 16-md-02704.
(Reporting by Jonathan Stempel in New York)