J.P. Morgan Chase & Co. is set to pay almost a third of a $1.86 billion settlement to resolve accusations that a dozen big banks conspired to limit competition in the credit default swaps market, according to people briefed on terms of the deal.
J.P. Morgan is paying $595 million, with the bank's portion of the accord largely based on the plaintiffs' measure of market share, said the people, who asked not to be identified because the firms haven't disclosed how they're splitting costs. The settlement also enacts reforms making it easier for electronic trading platforms to enter the CDS market, according to a statement Thursday from attorneys for the plaintiffs, which include the $48 billion Los Angeles County Employees Retirement Association, Pasadena, Calif.
Morgan Stanley, Barclays and Goldman Sachs Group are paying about $230 million, $175 million and $164 million, respectively, the people said. Plaintiffs' lawyers disclosed the approximate size of the settlement in Manhattan federal court last month, saying they were still ironing out details. They updated the total Thursday.
The accord averts a trial following years of litigation by hedge funds, pension funds, university endowments, small banks and other investors that sued as a group. They alleged that global banks — along with Markit Group, a market information provider in which the banks owned stakes — conspired to control the information about the multitrillion-dollar credit default swaps market in violation of U.S. antitrust laws.
Credit Suisse Group, Deutsche Bank and Bank of America Corp. will pay about $160 million, $120 million and $90 million, respectively, the people said. BNP Paribas, UBS Group, Citigroup, Royal Bank of Scotland Group and HSBC Holdings also would pay less than $100 million each, the people said.
Spokesmen for the banks said the companies had no immediate comment or didn't immediately respond to messages seeking comment.
“We look forward to the court reviewing the settlement and bringing this important matter to a just conclusion,” Dan Brockett and Bruce Simon, lawyers representing the plaintiffs, said in the statement.