A judicial panel this week ordered the consolidation in a federal court in New York City of seven related class action lawsuits brought by a number of states and localities that allege Wall Street and other firms conspired in anti-competitive price fixing of municipal derivatives and guaranteed investment contracts.
The suits, which stem from parallel criminal and civil investigations that are underway by the Justice Department, the Securities and Exchange Commission, and the Internal Revenue Service, were consolidated in the U.S. District Court for the Southern District of New York on Monday by the Judicial Panel for Multidistrict Litigation, which resolves jurisdictional issues for civil suits filed in different federal courts.
The states and localities that brought the suits may soon file a consolidated complaint against the firms in the New York court, after which the defendants would likely have 60 days to respond, an attorney for one of the plaintiffs said yesterday.
In its order, the panel pointed to New York's proximity to many of the defendants in the suits, which include JP Morgan Chase & Co., Lehman Brothers and Morgan Stanley, as the basis for relocating the cases there, even though similar class actions had also been filed before federal courts in the District of Columbia and San Francisco.
"We are persuaded that the center of gravity for this litigation is New York City and that the Southern District of New York is an appropriate transferee forum for this docket," wrote Judge D. Lowell Jensen on behalf of the panel. "The alleged wrongful activities are intimately connected to the New York financial markets, many of the defendants are headquartered in New York City, the government investigation is ongoing in the Southern District of New York, and relevant documents and witnesses are likely to be found there."
In March, Fairfax County, Va., and the state of Mississippi were among the plaintiffs who first filed two similar suits in the U.S. District Court for the District of Columbia, one against Bank of America and the other naming 36 other firms. Bucks County, Pa., filed similar lawsuits in the same court.
Haywood County, Tenn., and Hinds County, Miss., have each filed class action suits in the New York Court, while Oakland filed in the San Francisco court.
Though jurisdiction over the cases has been settled, there is a long legal road ahead before the matter is resolved, unless settlements are reached out of court.