A number of banks, including Morgan Stanley (NYSE:MS) and Wells Fargo (NYSE:WFC) had sought dismissal of a lawsuit against them which claims municipal derivatives they were working with were attempted to be rigged by them in the bidding process.
This lawsuit has been ongoing since 2008, when originally the same judge, U.S. District Judge Victor Marrero, had dismissed the case in 2009.
After the dismissal, those suing the companies regrouped and filed a new complaint against them, this time removing some of the original defendants in the case, which evidently was the reason for the dismissal the first time.
Bond issuers , municipalities and the state of Mississippi sued the companies, accusing them of getting together and agreeing not to compete while bidding for the municipal derivatives, which are sold to those who issue municipal bonds.
The plaintiffs allege the group of banks (including a dozen more beyond Wells Fargo and Morgan Stanley) divided some of the customers between themselves while then fixed and leveled prices to keep them lower than market rates. That included the interest rates which were paid to the issuers of the bonds.
The decision by Marrero had nothing to do with the merits of the case, rather it dealt with the facts put forth by the plaintiffs were enough to allow the case to proceed.
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