On December 3, 2009, in In re Short Sale Antitrust Litigation (No. 08-0420-cv), the U.S. Court of Appeals for the Second Circuit affirmed the dismissal of a putative class action alleging collusion among certain financial institutions that serve as “prime brokers” in connection with short sale transactions. [1] Plaintiff-appellant Electronic Trading Group, LLC (ETG), a short seller, alleged that prime brokers arbitrarily had designated certain securities as “hard-to-borrow” and then fixed the price for borrowing them in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1. The district court had dismissed the complaint on the grounds that antitrust liability was impliedly precluded by the federal securities laws based on the United States Supreme Court’s decision in Credit Suisse
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The US Court of Appeals for the Second Circuit affirms dismissal of antitrust claims addressing the proper application of the implied preclusion doctrine (Electronic Trading Group / Banc of America Securities)
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