U.S. Court of Appeals reverses dismissal of antitrust lawsuit…

Supreme Court The coffin of U.S. Supreme Court Justice O’Connor is carried into the Supreme Court in Washington

A recent decision by the 2nd U.S. Circuit Court of Appeals in Manhattan highlighted an antitrust lawsuit involving 10 major banks accused of charging investors excessive fees for corporate bonds. The court ruled that the judge presiding over the case should be recused because his wife owned stock in one of the banks.

The lawsuit, which was initially dismissed by U.S. District Judge Lewis Liman in October 2021, alleged that Bank of America, Barclays, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan Chase, Morgan Stanley, NatWest and Wells Fargo charged bond investors excessive fees for “unusual” trades worth less than $1 million.

The appeals court found that Judge Liman’s bias was reasonably questionable given his wife’s ownership of Bank of America stock, which creates the appearance of impropriety. The decision underscored the importance of judges being vigilant about financial conflicts, a point U.S. Supreme Court Chief Justice John Roberts made in his 2021 annual report on the judiciary.

The lawsuit involves 10 large banks accused of inflating fees for corporate bonds.

The 2nd U.S. Circuit Court of Appeals ruled that the judge hearing the case should be recused.

Accusations of overpricing for “unusual” transactions valued at less than $1 million.

After the conflict was revealed, the case was transferred to U.S. District Judge Valerie Caproni as investors appealed the dismissal. The banks argued that Liman’s failure to disclose the conflict did not justify dismissing or reopening the case. But the appeals court expressed concerns that such violations could potentially undermine public confidence in the judicial process.

Lawyer George Zelcs, who represents the investors, said he was willing to continue the case before Judge Caproni. Bank of America and legal representatives for the banks did not immediately respond to requests for comment.