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City of Oakland Antitrust Lawsuit For Price-
Fixing In Government Investment Contracts

  
On April 23, 2008, the City of Oakland filed a federal antitrust lawsuit against national financial firms such as AIG Financial Products, Bank of America, Bear Stearns, JPMorgan Chase, Wachovia Bank and others. Click here to read a copy of the complaint.
The lawsuit alleges that financial companies and brokers agreed among themselves to give cities artificially low bids for Guaranteed Investment Contracts, which cities, counties, school districts and other public entities use to earn interest on bond proceeds. By conspiring to avoid competitive bidding, financial companies were able to give cities abnormally low interest rates, depriving taxpayers of the market rate of return.
Proposed Class
The City of Oakland seeks to represent all state, local or municipal Government Entities in the United States or its territories that purchased government investment contracts and other financial instruments from defendants at any time from January 1, 1992 through the Present. Excluded from the Class are all federal governmental entities and instrumentalities of the federal government.
Background on the Litigation
Designing and constructing capital projects often takes several years, resulting in a gap between when the bond funds are received to when the funds are all spent. It serves the public interest for governments to gain interest on bond monies. Guaranteed Investment Contracts are a safe means to generate a higher rate of return from bond proceeds than would be obtained if the bond funds were placed in a traditional savings account.
Oakland purchased hundreds of millions of dollars worth of Guaranteed Investment Contracts from defendants named in the suit. Estimated damages to the City of Oakland are in the hundreds of thousands of dollars.
Across the country, cities, counties, school districts and other public entities have been overcharged in the tens of millions of dollars, if not more. Similar lawsuits have been filed against financial firms by the State of Mississippi, the Charlestown County School District and other local governments in southern states. Oakland’s lawsuit was filed as federal authorities in the Department of Justice, the Securities and Exchange Commission and the Internal Revenue Service conduct an unprecedented investigation into bid rigging in the municipal bond market.
In February 2008, Bank of America announced it would cooperate with the Department of Justice investigation in return for amnesty from antitrust prosecution. Bank of America also agreed to a $14.7 million settlement with the IRS relating to the company’s role in providing Guaranteed Investment Contracts.
Contact Plaintiffs' Counsel
Lieff Cabraser Heimann & Bernstein, LLP, is serving as co-counsel for the City of Oakland. To contact an attorney at Lieff Cabraser concerning this litigation, click here.
About Lieff Cabraser
Lieff Cabraser Heimann & Bernstein, LLP is a fifty-plus attorney law firm with offices in San Francisco, New York and Nashville. We represent businesses, governments and individuals as plaintiffs in class and group actions as well as in individual lawsuits in cases involving substantial losses. Since 2003, the National Law Journal has annually selected Lieff Cabraser as one of the top plaintiffs' law firms in the nation.
Lieff Cabraser has played a prominent role in federal litigation under the Sherman Act on behalf of businesses in numerous markets including computer components, prescription drugs, polypropylene carpets, compact discs, credit cards, linerboard, carbon fiber, plastic laminates, flat glass, industrial pigments and vitamins. We have also successfully litigated antitrust claims against Microsoft Corporation for monopolistic practices, and achieved record recoveries against El Paso Gas Co. and wholesale electric companies for allegedly manipulating the price of energy in California. Learn more about our firm.

Our offices
LIEFF CABRASER HEIMANN & BERNSTEIN, LLP
E-Mail: mail@lchb.com
Firm Website: www.lieffcabraser.com


Notice: Lieff Cabraser attorneys provide legal advice and practice law for clients in federal district courts throughout the United States and in state courts where we are licensed to practice. In states in which our lawyers are not licensed to practice, we have affiliations with local attorneys who serve as co-counsel with our firm. Please read our disclaimer.

Copyright © 2008 Lieff Cabraser Heimann & Bernstein, LLP
 

Antitrust
Antitrust
Learn about cases involving price-fixing and anti-competitive conduct.
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