June 23, 2016 Articles

Will Securities Antitrust Cases Invite More Objections Because of the Complexity of Their Distribution Plans?

Objections in a recent case could signify that class members will start to examine distribution plans more closely

By Terry McMahon, Joel D. Rothman, and Peter M. Saparoff

The number of antitrust claims being brought in securities cases, especially class actions, in on the increase. See Peter M. Saparoff et al., “The Increasing Application of Antitrust Claims to Securities Transactions,” Securities Litigation, Winter 2016. Antitrust claims have appeared in several recent high-profile class action securities cases, including the litigations covering the LIBOR manipulation scandal [log-in required], the market for U.S. Treasuries, the foreign currency exchanges, and the precious metals markets [log-in required]. In one such class action, In re Credit Default Swaps Antitrust Litigation, No. 1:2013-md-02476 (S.D.N.Y.) (registration required), several institutional class members recently objected to a proposed settlement, criticizing, among other issues, the pricing models and methodology used to allocate settlement funds among the class plaintiffs. Although the court has now rejected those objections and approved the settlement, it is worth examining the objections in more detail. Traditionally, objections to class action settlements focus on attorney fees. But the objections in the credit default swap (CDS) litigation could signify that class members will start to examine distribution plans more closely, especially as part of these highly complex hybrid cases that address antitrust issues in the context of securities class action litigation.

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