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Quinn Emanuel leads as 12 banks pay $1.87bn in swap settlement

Quinn Emanuel Urquhart & Sullivan took on some of Wall Street’s finest firms including Sullivan & Cromwell and Skadden Arps Slate Meagher & Flom, as a dozen major banks, data provider Markit and International Swaps and Derivatives Association (ISDA) were accused by investors of rigging the credit derivatives market in a case which resulted in a $1.87bn settlement.

The group of investors alleged 12 banks including Bank of America (BoA), Morgan Stanley, Citi Bank and Goldman Sachs, ISDA and data provider Markit, all conspired to manipulate the swap rate and blocked competing providers from entering the credit-default-swap market. The settlement hearing was held before US District Court judge Denise Cote in New York late this month [September] with Quinn Emanuel battling it out against 15 law firms.

Of the US banks, BoA turned to Davis Polk & Wardwell senior counsel Robert Wise; Morgan Stanley used Cravath, Swaine & Moore litigator Daniel Slifkin; JP Morgan turned to Skadden Arp’s Peter Greene; while Goldman Sachs used regular advisor Sullivan with Richard Pepperman, but also instructed Winston & Strawn disputes partner Robert Sperling.

Sidley Austin’s David Graham represented Citi Bank; David Bohan at Katten Muchin Rosenman advised UBS; while Jones Day antitrust partner Paula Render advised Deutsche Bank; Hogan Lovells’ Robert Robertson led for Credit Suisse; while Magic Circle firm Allen & Overy won the instruction for BNP Paribas with David Esseks leading.

Royal Bank of Scotland instructed Cadwalader, Wickersham & Taft litigator Charles Rule; while Mayer Brown’s litigation co-head Andrew Marovitz acted for HSBC; with Barclays Bank turning to David Januszewski at Cahill Gordon & Reindel.

Simpson Thacher disputes partner Michael Garvey represented ISDA, while Markit turned to Proskauer Rose litigator Colin Kass. Quinn Emanuel was appointed lead counsel by Judge Cote after some 20 claimant firms supplied briefs in a ‘beauty contest’ understood to include rivals Scott+Scott, Robbins Geller Rudman & Dowd, Susman Godfrey and Block & Leviton.

Quinn Emanuel represented the Los Angeles County Employees Retirement Association and Salix Capital, who also instructed Los Angeles firm Pearson, Simon & Warshaw who co-led alongside Quinn Emanuel with civil litigator Clifford Pearson and antitrust partner Bruce Simon.

‘The court picked us [Quinn Emanuel] because we have the depth and resources that none could match,’ said partner Daniel Brockett, who led alongside litigator Steig Olson.

‘This case is a good illustration of what our firm can do. The DoJ [Department of Justice] had looked at this case and passed. The European Commission also looked at this case and brought some charges that didn’t stick. So regulatory bodies on both sides of the pond could not hold these banks accountable. It took my firm to do it, and this is very rare for a private practice firm,’ said Brockett.  

He added that the claimants are likely to receive more than $100m each – a considerable amount for a class action. Cases of similar magnitude includes the recent $2bn forex antitrust settlement in the US, where Scott+Scott led a proposed class action that accused 16 banks of widespread manipulation in the $5.3trn-per-day foreign exchange rate market.

In a statement ISDA said: “We are pleased the matter is close to resolution. ISDA remains committed to further developing CDS market structure to ensure the market functions safely and efficiently.”