In re Interest Rate Swaps Antitrust Litigation

Citation: 261 F. Supp. 3d 430Docket: 16-MD-2704 (PAE); 16-MC-2704 (PAE)

Court: District Court, S.D. New York; July 28, 2017; Federal District Court

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This multi-district litigation concerns antitrust claims against investment banks accused of colluding in the interest rate swaps (IRS) market. Two groups of plaintiffs are involved: a putative class of investors who traded IRSs from January 2008 to December 2016, alleging they faced unfavorable pricing due to collusion that hindered electronic trading platforms, and two companies, Javelin Capital Markets, LLC and Tera Group, Inc., claiming the dealers conspired to undermine their trading platforms developed around 2013-2014, which would have offered competitive pricing.

The defendants include 13 corporate entities: 11 investment banks functioning as IRS dealers, ICAP Capital Markets, LLC (a broker), and Tradeweb Markets LLC (a trading service provider). Motions to dismiss the claims, under Federal Rule of Civil Procedure 12(b)(6), are pending, with some granted and others denied.

The factual background is drawn from two consolidated complaints and assumes the truth of all well-pleaded facts, favoring the plaintiffs. The litigation context is shaped by significant changes in the IRS market from 2007-2016, including the evolution of electronic trading infrastructure and the regulatory impacts of the Dodd-Frank Act, which facilitated the rise of anonymous trading platforms. The plaintiffs allege that before 2012, the Dealer Defendants acted to prevent the emergence of these platforms to protect their profit margins, and post-2013, they boycotted new platforms, including those by Javelin and Tera.

Interest rate swaps are defined as financial derivatives allowing two parties to exchange interest-rate cash flows on a specified amount over a fixed period. Typically, one party pays a fixed rate while the other pays a floating rate, with contract values fluctuating based on interest rate changes.

Interest Rate Swaps (IRSs) are utilized by various investors, including municipalities, pension funds, and corporations, to mitigate risks associated with interest rate fluctuations. For instance, a municipality may convert floating-rate payments from a bond into fixed payments to protect against rising interest rates. The IRS market has expanded significantly, with the notional amount increasing from approximately $230 trillion in 2006 to about $381 trillion by 2014. 

Initially, IRS contracts were non-standardized and negotiated individually, leading to high transaction costs. The introduction of the ISDA Master Agreement in 1987 standardized terms for over-the-counter derivatives, which facilitated lower costs and increased trading volume. By 2000, most IRS material terms, such as maturity, fixed rate, and payment frequency, were standardized.

Investment banks emerged as market makers, profiting from the spread between the bid and ask prices for IRSs. A typical example illustrates that a dealer might quote a 2.00% bid and a 2.05% ask for a fixed rate on a five-year IRS, with wider spreads yielding higher profits for dealers. Historically, communication for IRS trading was predominantly over the counter via telephone, which favored dealers by limiting customers' access to pricing information and requiring them to reveal trade specifics. This one-sided flow of information diminished competition and allowed dealers to maintain advantageous pricing practices.

Electronic trading in fixed income securities began in the mid-1990s and expanded in the IRS market in the early 2000s, promising increased efficiency, transparency, and competitiveness. However, plaintiffs argue that electronic trading evolved unevenly, with inter-dealer brokers (IDBs) facilitating dealer-only transactions on platforms that provided better pricing and faster execution. Dealers submitted bids and asks to IDBs, which published the best anonymous quotes, allowing immediate trade execution or negotiation. IDBs earned a brokerage fee for these services.

In contrast, until 2013, buy-side customers could only access IRS electronic trading platforms using a "request-for-quotes" (RFQ) system, requiring disclosure of their identities and limiting their access to a few dealers. This setup denied buy-side customers the advantages of dealer-to-dealer platforms, such as streaming prices and participation in live markets. Furthermore, different infrastructures developed for clearing IRS trades: dealer-to-dealer trades utilized central clearinghouses to mitigate counterparty risk, essential for anonymous trading, while non-cleared trades left parties exposed to default risk.

Plaintiffs allege that central clearing became viable in the IRS market by the early 2000s, with SwapClear clearing most interdealer trades by 2005. Nonetheless, they contend that the central clearing model was not extended to buy-side trades due to collusion among Dealer Defendants, hindering the establishment of an inclusive trading platform before the Dodd-Frank Act.

The Dealers argue that the buy-side's reluctance to adopt a central clearing mechanism stems from their unwillingness to bear the significant start-up and ongoing costs, including substantial collateral requirements. The Dodd-Frank Wall Street Reform and Consumer Protection Act, enacted on July 21, 2010, amended the Commodities Exchange Act to create a comprehensive regulatory framework for swaps, assigning the CFTC with exclusive jurisdiction for implementation. A primary aim of Dodd-Frank was to enhance accountability and transparency in financial markets, particularly in the OTC swaps market, which was perceived as less transparent than traditional markets. 

Dodd-Frank established trading regulations requiring certain swaps to be executed on swap execution facilities (SEFs), defined as platforms where multiple participants can trade swaps through bids and offers. Swaps subject to CFTC's mandatory clearing rules must trade on SEFs if deemed "made available to trade" by a registered SEF. Trading on SEFs may occur via order book or request-for-quote (RFQ) systems, with RFQ requiring price requests to be sent to at least three counterparties.

Regarding clearing regulations, Dodd-Frank aimed to mitigate risks associated with non-cleared swaps that contributed to the credit market freeze during the 2008 financial crisis, granting the CFTC authority to mandate swaps clearing. In 2012, the CFTC enacted a rule mandating the clearing of interest rate swaps (IRS), effective March 2013, recognizing that the majority of new IRS clearing volume would originate from the buy-side. The implementation was delayed due to requests from buy-side entities concerned about the associated costs and burdens. Dodd-Frank adopted a futures commission merchant (FCM) model for clearing, positioning FCMs as intermediaries between buy-side clients and the clearinghouse. Plaintiffs allege that the Dealer Defendants, owning nearly all FCMs involved in IRS trading, effectively acted as gatekeepers under the Dodd-Frank framework.

Dodd-Frank mandates that Swap Execution Facilities (SEFs) offer all market participants "impartial access," allowing buy-side firms to engage in dealer-to-dealer trading. This regulation prevents SEF owners from imposing discriminatory access practices against specific market participants. Plaintiffs allege that prior to Dodd-Frank, Dealer Defendants conspired to inhibit the establishment of anonymous all-to-all trading platforms for buy-side investors. They claim that the disparity in trading platforms for inter-dealer versus buy-side IRS transactions originated from this conspiracy, which continued post-Dodd-Frank. Following the emergence of electronic platforms capable of facilitating all-to-all transactions, the conspiracy allegedly shifted towards undermining these platforms.

Tradeweb, established in 1998 as a dealer-supported marketplace, initially served as a dealer-to-client RFQ platform for IRSs, relying on dealers for market-making. With IRS trading volumes increasing, plaintiffs assert that the Dealer Defendants viewed the potential for an all-to-all electronic market as a threat to their intermediary role. In response, Goldman Sachs' Principal Strategic Investments Group (PSI) initiated a "dealer consortium" strategy to retain market control and protect profitability from the encroachment of electronic exchanges. The PSI recognized that transitioning to all-to-all platforms would allow buy-side entities to trade directly, undermining dealers' profits. Plaintiffs further allege that similar strategic investment groups existed at other major dealers and that the dealers regularly communicated and coordinated actions to maintain their market dominance between 2008 and 2016.

Plaintiffs allege that a collaboration among key members from Goldman Sachs, Deutsche Bank, and Lehman Brothers was initiated to regain control of Tradeweb and prevent its introduction of all-to-all electronic trading in the IRS market, a move that was anticipated to meet strong demand from buy-side clients. By late 2007, Tradeweb was positioning itself as a leading real-time trading platform. In response, these investment banks recognized that Tradeweb's liquidity contracts with Dealers were expiring, which provided the Dealers leverage to manipulate the situation. They initiated "Project Fusion," aimed at covertly taking control of Tradeweb's IRS business without attracting scrutiny. 

To execute this, the Dealers set up two Delaware LLCs—Tradeweb Markets LLC, which would present a façade of minority investment, and Tradeweb New-Markets LLC, where they acquired an 80% majority stake. The Dealers misled the public by using similar names and claiming their investment was to enhance electronic trading efficiencies while their actual intent was to stifle Tradeweb's all-to-all platform. They allegedly reached agreements to prevent Tradeweb from advancing with all-to-all trading and to provide liquidity exclusively to Tradeweb, undermining competitors.

Subsequent to their investment, the Dealers filled the boards of both LLCs with their senior personnel, effectively controlling governance and strategic direction. They held regular meetings under the guise of board activities to coordinate their strategy for dominating the IRS market and controlling participation in Tradeweb’s platforms.

Dealers' personnel allegedly conspired at informal gatherings, discussing strategies to maintain a bifurcated market structure and impede the shift to all-to-all trading. Following the merger of Tradeweb New-Markets LLC into Tradeweb Markets LLC in November 2010, the Dealers retained majority board representation, which plaintiffs claim influenced Tradeweb's operations to favor Dealers despite its claims of independence. Tradeweb's management, under pressure from Dealers, abandoned plans for an all-to-all electronic trading platform, resulting in lost business and profits from fees. The structure of Tradeweb's platforms reinforces a two-tiered market, where the Dealerweb SEF caters to dealers with high fees, while the Tradeweb SEF, aimed at non-dealer participants, offers lower fees yet restricts access to the buy side. Furthermore, plaintiffs allege that Tradeweb's order book is essentially closed to buyers, as dealers prefer to trade among themselves on other platforms. The Dealers also utilized trade associations, particularly ISDA and FIA, as avenues for collusion, controlling their boards and drafting agreements that allegedly excluded considerations for IRS trades executed on SEFs. Javelin's attempts to participate in discussions regarding the Cleared Derivatives Execution Agreement were met with resistance, highlighting the exclusionary practices within these forums.

Dealers are alleged to have obstructed Inter-Dealer Brokers (IDBs) from creating all-to-all trading platforms accessible to buy-side investors. They purportedly threatened punitive actions against IDBs considering such platforms, including withdrawing liquidity and placing them in a “penalty box.” Notably, in 2009 and 2014, GFI Group attempted to implement anonymous trading protocols but faced threats from Dealers, leading GFI to abandon these initiatives. The threats also extended to buy-side investors, jeopardizing their access to primary market makers and essential banking services.

In 2009, ICAP allegedly reached an agreement with Dealer Defendants to restrict buy-side access to its platform following competition from Dealerweb, a platform launched by Tradeweb and Dealers. ICAP had considered retaliatory measures, including developing an all-to-all trading platform, which prompted the détente with Dealers. As part of this agreement, both parties decided against further market expansion in the IDB space. Despite ICAP's successful iSwap platform, they allegedly limited buy-side participation when it expanded to the U.S. in 2013.

Additionally, the Dealers recognized central clearing of over-the-counter (OTC) products as a threat to their dominance in electronic trading. A report from J.P. Morgan in 2010 indicated that clearing could lead to increased exchange trading of OTC products. Consequently, Dealers aimed to control the IRS clearing infrastructure to mitigate this threat and engaged in discussions to restrict buy-side access through platforms like Tradeweb and OTCDeriv-Net.

Plaintiffs assert that the Dealers undertook various actions to obstruct clearing in the IRS market. Initially, they formed OTCDerivNet, a strategic investment group established to gain control over the SwapClear clearinghouse, which was created by LCH.Clearnet in 1999. Eight Dealers initiated OTCDerivNet in October 2000, with additional Dealers joining in 2001 and 2009. Though marketed as inclusive for all IRS participants, the plaintiffs claim that OTCDerivNet was intended to solidify the Dealers' dominance over SwapClear. The Dealers financed SwapClear entirely, receiving profit shares and governance control, which they used to impose stringent membership restrictions, including a $5 billion capital requirement and unanimous approval from existing members for new entrants, effectively limiting membership to investment banks.

Additionally, the Dealers allegedly worked to thwart competing clearing initiatives, particularly from the Chicago Mercantile Exchange (CME), which aimed to launch a cleared IRS product. Viewing CME's plans as a competitive threat, the Dealers boycotted CME's Swapstream platform, agreeing to clear only interdealer IRS trades on SwapClear, thereby depriving CME of necessary trading volumes and revenues.

Following the Dodd-Frank Act, which pressured Dealers to broaden clearing access, plaintiffs claim the Dealers made only superficial adjustments at SwapClear. They introduced new rules that ostensibly expanded buy-side access but included onerous capital requirements for the default fund, effectively restricting participation to large investment banks.

Dodd-Frank requires certain Interest Rate Swaps (IRS) to be traded on Swap Execution Facilities (SEFs) and centrally cleared, positioning the FCM divisions of the Dealer Defendants as pivotal gatekeepers in this process. Plaintiffs claim that the Dealers manipulated their FCMs to refuse clearing for buy-side trades on all-to-all trading platforms, which they argue should be agnostic to platform choice since all cleared trades contribute to revenue. Specifically, the Dealers allegedly withheld clearing services from buy-side entities trading on SEFs like Tera, Javelin, and TrueEx to obstruct IRS transactions on these platforms. Furthermore, FCMs reportedly did not conduct pre-trade checks for trades on anonymous all-to-all SEFs, limiting order flow from buy-side customers.

The plaintiffs assert that after the implementation of Dodd-Frank regulations, the Dealer Defendants conspired to undermine and eliminate SEFs offering anonymous all-to-all trading. They allege that TeraExchange, Javelin, and TrueEx, which had invested heavily in developing such platforms, were targeted by a boycott orchestrated by the Dealers, who coordinated their actions through strategic investment groups and secret meetings hosted by an inter-dealer broker (IDB) named Tradition. This coordination included collective decision-making about participation in SEFs, undermining independent choices by firms like Goldman Sachs.

Ultimately, the plaintiffs contend that the Dealers' actions created significant barriers that stifled competition, as anticipated participation by numerous firms was drastically reduced. The tactics employed by the Dealers, including refusal to trade on new platforms, denial of clearing buy-side trades, and threats of retaliation against participants, allegedly led to the failure of Tera Exchange and Javelin, while limiting TrueEx’s trading to request-for-quote protocols.

Plaintiffs assert the existence of a bifurcated IRS trading market where the buy-side participants are excluded from all-to-all electronic trading, while Dealers maintain access. TeraExchange, founded in 2010 and capitalized at $7 million, developed all-to-all electronic trading platforms for interest rate swaps (IRSs) aimed at enhancing price transparency and competition. Tera's platform, equipped with necessary technology for operation and compliance, began offering access in 2011, targeting large proprietary trading firms for liquidity rather than traditional Dealers. Plaintiffs argue that had these firms participated, Dealers would have been compelled to use Tera's platform to fulfill their obligation to secure the best execution for clients. Tera received temporary SEF certification from the CFTC in September 2013, attracting commitments from various liquidity providers. 

However, plaintiffs allege that Dealers conducted covert meetings to undermine Tera, referring to it as a "Trojan Horse." They attempted to invest in Tera under the pretense of partnership, but Tera declined these offers. Subsequently, Dealers allegedly conspired to deny liquidity to Tera, employing tactics such as refusing to clear trades executed by their buy-side clients on Tera's platform.

FCMs employed tactics to obscure their refusal to clear trades on TeraExchange by quoting excessively high clearing fees for trades executed on Tera, while providing significantly lower fees for trades on platforms deemed non-threatening. For instance, Bank of America charged Knight Capital exorbitant fees for Tera trades but no fees for trades on platforms like Tradeweb and Bloomberg. When Tera sought to persuade FCMs to clear trades, an official from Bank of America stated that his superiors would never permit clearing for TeraExchange. Multiple FCMs, including Barclays, Morgan Stanley, Credit Suisse, HSBC, and ANZ Bank, provided evasive explanations for their non-participation. This collective refusal from the Dealers significantly undermined Tera's support.

Additionally, buy-side entities reported facing reprisals from dealers for engaging with Tera. On June 13, 2014, Tera successfully facilitated its first trade of $10 million, which was to be cleared by BNPP. However, BNPP's trading desk subsequently threatened the involved parties with loss of access to clearing and other banking services if they continued trading on Tera. The following business day, major banks including BNPP, Citibank, J.P. Morgan, and UBS demanded to audit TeraExchange's rulebook, despite Tera’s prior CFTC certification, with the intent to obstruct buy-side trading on the platform. Bank of America also threatened buy-side clients with inflated fees and liquidity boycotts for trading on Tera.

Tera sought to engage European interdealer brokers (IDBs) to comply with Dodd-Frank regulations requiring certain IRS trades to be executed through a SEF, initially receiving positive feedback. However, the Dealers subsequently pressured these IDBs not to accept trades from Tera, leading to a complete halt in trade processing through TeraExchange’s order book, causing some IDBs to close. Consequently, Tera shifted focus away from the IRS market, effectively ceasing its operations in that area.

Two all-to-all IRS trading platforms, an anonymous RFQ platform and an anonymous order book, were developed by Javelin, which offered firm pricing for swaps instead of indicative quotes. Starting in 2011, Javelin demonstrated these platforms to buy-side entities and five major dealers: BNPP, Deutsche Bank, Goldman Sachs, J.P. Morgan, and RBS, offering the dealers a share of brokerage fees for using the platform. Javelin's user interface was advanced and successfully tested for trade execution and clearing. The development required significant industry knowledge, technological expertise, and substantial investments in office space, data centers, and software licenses.

By 2011, Javelin's order book was ready for testing, and by 2013, Javelin had implemented a live credit-check system to confirm customer credit sufficiency with their FCMs for trade execution and clearance. The CFTC granted Javelin temporary SEF registration on September 19, 2013, allowing the platforms to become operational. Javelin executed its first trade as a SEF on October 1, 2013, and by late 2013, had onboarded seven second-tier dealers. However, most dealers were reluctant to provide liquidity, allegedly due to an agreement to support only controllable platforms. The dealers feared that a successful anonymous platform would threaten their market-making status and the high bid/ask spreads they maintained.

Between 2013 and 2015, Javelin sought support from senior dealer employees, with only RBS temporarily agreeing to provide liquidity. Many dealers offered excuses for non-participation, such as the need for legal reviews or internal documentation, while some refused to test the platform altogether. Notably, J.P. Morgan's interest in trading on Javelin was allegedly a tactic to gather information about its platforms. In September 2013, mock trading sessions were held to demonstrate the platforms, but dealers’ FCMs, including J.P. Morgan’s, largely declined to conduct necessary pre-trade credit checks, hindering buy-side participation. Morgan Stanley also refused to assist in connecting its clients to the platform for trading.

A Morgan Stanley official initially agreed to demonstrate a trading platform but delayed attendance and, despite a successful demonstration, Morgan Stanley refused to clear trades executed on the platform. Similarly, Deutsche Bank allegedly provided excuses regarding the approval of Javelin’s rulebook, which hindered seven buy-side entities from trading on Javelin, and declined to test the platform’s connection, citing a lack of capacity despite claims from plaintiffs that the testing would have been straightforward. Over 15 months, Deutsche Bank reportedly offered a series of excuses for not completing legal reviews and approving trades. Other dealers, including Morgan Stanley and Barclays, allegedly used pretextual reasons to deny trade clearance through Javelin, with Goldman Sachs exhibiting hostility towards Javelin during meetings and threatening to set customer credit limits to zero if forced to clear trades on the platform. Some dealers actively discouraged their customers from trading on Javelin. For instance, a Morgan Stanley representative sought a list of interested buy-side customers and shared it with other dealers, leading Goldman Sachs to threaten NISA Investment Advisors with the withdrawal of clearing services if they traded on Javelin, which resulted in NISA backing out. Citadel Fixed Income Master Fund also ceased trading on Javelin after being pressured by dealer defendants. Despite these challenges, Javelin managed to sign up around 80 entities by late 2014; however, the dealers' refusal to allow trade clearance and intimidation tactics severely limited Javelin’s trading volume, with at least one entity, Mitsubishi, ceasing attempts to trade due to pressure from its FCM.

Buy-side interest in Javelin and similar trading platforms diminished significantly due to concerns about potential retaliation from Dealer Defendants against investors using the platform. In October 2014, a Deutsche Bank executive warned a Javelin official that continued promotion of Javelin could jeopardize his career in Wall Street. Plaintiffs claim that Dealers coordinated their opposition to Javelin, providing similar justifications for refusing to engage, citing a lack of buy-side participation as a pretext while actively working to prevent buy-side trading on Javelin. 

RBS initially provided limited liquidity on Javelin but did so at unfavorable bid/ask spreads, leading to no trades with buy-side customers. Following Javelin's application to the CFTC for broader IRS execution on SEFs, RBS executives pressured Javelin's CEO to retract this submission. After Javelin narrowed its application, RBS resumed liquidity provision but continued to distance itself from the platform and eventually withdrew completely in April 2015. By October 2014, buy-side interest in Javelin collapsed after it became known that all-to-all trades were not guaranteed to be anonymous, further exacerbated by the Dealers' influence. Consequently, Javelin has struggled financially, executing fewer than 180 trades since its launch despite substantial investment.

TrueEx, founded by Sunil Hirani, aimed to introduce a competitive SEF for IRS trading but faced similar challenges. Despite having 62 buy-side participants, plaintiffs allege that Dealer Defendants boycotted TrueEx by refusing to trade on its anonymous order book, as trades would require clearance through the Dealers’ FCMs, which could lead to retaliation against buy-side investors.

Dealers are accused of refusing to utilize the TrueEx platform for dealer-to-dealer trading, allegedly as part of a conspiracy since TrueEx offered better financial terms than competing platforms like Tradeweb. While the Dealers provided limited liquidity to TrueEx’s non-anonymous dealer-to-client RFQ platform, they intentionally avoided trading high-volume “plain vanilla swaps” with the buy side, opting instead for less common bespoke swaps. Plaintiffs argue there is no legitimate reason for this behavior, as TrueEx offers superior technology and lower fees, and that the Dealers’ actions effectively hindered TrueEx's ability to launch a competitive all-to-all trading platform.

Additionally, the Dealers maintained a practice called “name give-up,” which requires the disclosure of swap counterparties. This practice, while historically justified for credit assessment, is now seen as unnecessary due to the central clearing of IRS trades. Plaintiffs contend that the enforcement of “name give-up” serves as a mechanism for the Dealers to retaliate against those attempting to trade on all-to-all platforms, which buy-side investors prefer to keep private. The enforcement is said to be conditioned by Dealer officials, who have also boycotted platforms like Tera and Javelin that do not require this disclosure.

The Dealers' interdealer brokers (IDBs) use MarkitWire, a service controlled by former Dealer officials, which discloses counterparties’ names before trade clearance, allowing for potential transaction termination. Due to collective pressure from the Dealers, many swap execution facilities (SEFs) maintain “name give-up,” effectively preventing buy-side participation. The Dealers have also threatened to withdraw liquidity from platforms allowing anonymous trading and penalized buy-side customers attempting to engage with all-to-all trading platforms. Data cited by the plaintiffs indicates minimal IRS activity on platforms that do not require “name give-up.” The boycott against Tera, Javelin, and TrueEx is claimed to have signaled that any platform enabling anonymous all-to-all IRS trading would face severe consequences, thus enforcing market discipline and dissuading others from establishing similar platforms.

Plaintiffs allege that Dealers have engaged in a boycott by deterring customers from utilizing alternative trading platforms, leading to the Dealers controlling over 70% of the interest rate swaps (IRS) market. This alleged control has prevented market structural changes, resulting in higher costs for investors without comparable financial instruments. Plaintiffs compare pricing with fixed income and equities products traded on exchanges, highlighting the benefits of transparent trading methods. The procedural history indicates that the initial complaint was filed on November 25, 2015, and subsequent cases were consolidated for pretrial proceedings. Multiple amendments to the complaints were filed, and motions to dismiss were submitted by defendants, citing various grounds including insufficient claim plausibility, lack of standing, preclusion by the Commodities Exchange Act and Dodd-Frank, and statute limitations on claims prior to 2012. The motions also addressed specific claims against individual defendants and state-law claims. To survive dismissal under Rule 12(b)(6), a complaint must contain sufficient factual content for a plausible claim of relief, as established by relevant case law.

To resolve a motion to dismiss, the Court must accept all well-pleaded facts as true and draw reasonable inferences in favor of the plaintiff, although this does not apply to legal conclusions. A complaint that merely provides labels, conclusions, or a formulaic recitation of elements is insufficient. In antitrust cases, including those under the Sherman Act, there is no heightened pleading standard; plaintiffs need only suggest a reasonable expectation that discovery will reveal evidence of illegality. The Sherman Act prohibits contracts or conspiracies that restrain trade among states. The critical inquiry in a Section 1 case is whether the conduct arises from independent decisions or an agreement. To plausibly allege a Sherman Act conspiracy, a complaint must provide enough factual matter to suggest an illegal agreement. The existence of an agreement is a legal conclusion, while allegations of agreements, such as price-fixing, are often deemed conclusory if not supported by factual detail. 

At the pleading stage, plaintiffs can show enough facts to suggest a conspiracy either through direct evidence—explicit proof requiring no inferences, such as recorded conversations about price-fixing—or through indirect or circumstantial evidence, which relies on reasonable inferences drawn from the defendants' behavior. Direct evidence is not mandatory, given the secretive nature of conspiracies, making it challenging to present concrete evidence at the pleading stage. Indirect evidence can also be utilized to support claims of conspiracy.

A horizontal agreement among competitors relies on claims of parallel conduct. However, the Supreme Court's ruling in Twombly established that merely alleging parallel conduct is inadequate to withstand a motion to dismiss at the pleading stage. To sufficiently allege an antitrust violation, the parallel conduct must suggest an agreement rather than be explainable as independent actions. Twombly provided an example where regional telephone companies refrained from entering each other's markets post-deregulation, leading to an inference of market allocation. The Supreme Court dismissed the complaint, stating that while the conduct was consistent with an agreement, it could also result from independent business strategies. 

The Court noted that parallel conduct could arise from coincidence, independent responses to shared market conditions, or interdependence without prior understanding among the parties. It emphasized that "conscious parallelism," common in concentrated markets, is not inherently unlawful. Following Twombly, for a complaint to succeed, it must include facts indicating that the conduct flowed from an agreement rather than individual business priorities. A mere statement of parallel conduct must be contextualized to suggest a meeting of the minds; if the conduct appears rational and can be interpreted in multiple ways, it does not support an inference of conspiracy. Ultimately, while a plausible basis for inferring an agreement is necessary, it does not demand a probability standard at the pleading stage, requiring only enough factual detail to justify further discovery into the existence of an illegal agreement.

Claims alleging conspiracy among horizontal competitors rely on identifying "plus factors" or circumstantial evidence that, in conjunction with parallel conduct, make it reasonable to infer an agreement among the competitors. The Second Circuit recognizes three key "plus factors": (1) a common motive to conspire, (2) evidence showing that the parallel actions were contrary to the individual economic interests of those involved, and (3) a high level of communication among firms. The Third Circuit emphasizes circumstantial evidence that implies a traditional conspiracy, which can include non-economic proof of an actual agreement to avoid competition. 

The allegations in the Second Amended Complaint (SAC) involve a Sherman Act conspiracy spanning from 2007 to 2016 among eleven Dealer Defendants and two additional entities, with the Joint Third Amended Complaint (JTSAC) focusing on the latter four years. The defendants contend that the complaints fail to plausibly allege a conspiracy, asserting that the actions described reflect independent self-interest rather than collusion, and that there is a lack of sufficient circumstantial evidence or "plus factors."

To evaluate the motions to dismiss, the time frame of the claims is divided into two segments: 2007-2012 and 2013-2016, due to significant changes in the interest rate swap (IRS) market following Dodd-Frank regulations. For 2007-2012, the plaintiffs argue that the defendants conspired to prevent the emergence of anonymous, all-to-all IRS trading platforms. In contrast, from 2013-2016, with such platforms already established, the plaintiffs claim the defendants aimed to suppress these nascent platforms. The SAC does not clearly articulate whether the conspiracy claim for 2007-2012 is based on parallel conduct, direct proof of agreement, or both, prompting the court to analyze the period from multiple angles to determine if a horizontal conspiracy has been adequately pled.

The SAC's primary claim from 2007-2012 centers on allegations of parallel inaction by Dealers, who purportedly acted in self-interest to suppress platforms facilitating all-to-all exchange-based IRS trading. The allegations include: 1) threats from Dealers to reduce liquidity for IDBs promoting buy-side trading on their platforms; 2) insistence on clearing IRS trades solely through the Dealer-controlled platform SwapClear, rather than adopting the potentially advantageous CME Cleared Swaps; and 3) continuation of the "name give-up" practice, which identifies buy-side customers to counterparties. However, these behaviors do not substantiate an inference of collusion to obstruct all-to-all trading. The SAC suggests that the Dealers viewed such platforms as a threat to their profit margins, leading them to independently discourage new trading paradigms that could jeopardize their existing profits. The document compares the current claims to those in Twombly, noting that the alleged parallel conduct lacks the clarity and direct competitive implications seen in that case. It emphasizes that the necessary infrastructure for anonymous all-to-all trading did not exist until after 2013, following the Dodd-Frank mandates, making it impossible for the alleged collusion to have taken root during the claimed period.

Central clearing, initiated in 2013, removed the necessity for trade-specific inquiries, facilitating anonymous exchange trading by designating the clearinghouse as the counterparty and requiring collateral from participants for creditworthiness. Prior to this development, particularly between 2007 and 2012, it was less plausible to assume collusive actions to hinder anonymous trading among Dealers, as there was no pressing need for collective obstruction before the Dodd-Frank Act established essential infrastructure for such trading.

The Second Amended Complaint (SAC) centers on "Project Fusion," an episode in 2007 where most Dealers acquired a controlling stake in Tradeweb, which had created a dealer-to-client request-for-quote (RFQ) platform. Plaintiffs argue that this acquisition serves as direct evidence of a conspiracy among Dealers to prevent Tradeweb from transitioning to an all-to-all trading model in the interest rate swap (IRS) market. The SAC claims that the Dealers, concerned about the potential expansion of Tradeweb, orchestrated a scheme to maintain its RFQ model by leveraging their influence over Thomson, the previous owner.

Allegations include that the Dealers concealed their majority control and intentions in a press release regarding their investment in Tradeweb. While these claims indicate inter-firm communications on IRS trading platforms, suggesting collaboration, the SAC's assertions regarding Project Fusion do not constitute strong direct evidence of conspiracy. The factual claims are inferential rather than explicit, lacking the clarity necessary to qualify as direct evidence as defined by the Second Circuit, which requires explicit proof without the need for inference. The SAC fails to specify details such as the time or place of any agreement to obstruct all-to-all trading or identify the individuals involved in such an agreement.

Direct evidence of an agreement, such as documented communications, is absent in the Second Amended Complaint (SAC) regarding Project Fusion. The SAC fails to provide specific allegations that Tradeweb had a plan for an all-to-all IRS exchange in 2007 or any concrete actions taken by Tradeweb between its acquisition by the Dealers in 2007 and the establishment of a SEF for such trading in 2013. The claims presented are largely conclusory and lack substantiation. Even if an unlawful agreement among Tradeweb’s Dealer owners to abandon a trading platform existed, the SAC does not present facts to classify that agreement as unlawful. 

For a plaintiff to prove a violation, they must either show a per se unlawful agreement or one that violates the rule of reason. Per se violations are limited to agreements that are evidently anti-competitive, such as price-fixing or market division among competitors. Agreements not qualifying as per se illegal must be assessed under the rule of reason, which requires the plaintiff to demonstrate adverse anti-competitive effects within a relevant market and the defendants' market power. The SAC's allegations regarding Project Fusion do not align with any recognized per se illegal agreements.

A claim is made regarding a decision by Dealer Defendants about the strategic direction of a financial technology company they majority-owned through a joint venture. Modern antitrust law assesses such joint conduct under the "rule of reason," which evaluates the joint venture's creation, business focus, product selection, and pricing, rather than applying a per se illegal standard. The document references several cases, indicating that the pricing decisions of a legitimate joint venture are not per se unlawful and that a joint venture, as a single entity, must have discretion in its operational decisions.

The plaintiffs fail to cite any precedent where competitor decisions to invest or control a business within a legitimate joint venture were assessed under the per se standard. The allegations do not demonstrate that Tradeweb, the joint venture's subject, became a horizontal competitor to the Dealer Defendants after its creation. Instead, Tradeweb is characterized as an electronic trading platform provider, not a market maker. The plaintiffs also do not sufficiently argue that the Project Fusion joint venture was an illegitimate structure masking anticompetitive behavior.

The allegations regarding Tradeweb, including its minority ownership by non-defendant Thomson and the Dealers’ substantial financial investment, do not support the inference of illegitimacy. Consequently, the analysis defaults to the rule of reason, which requires sufficient facts to show that the Project Fusion joint venture constituted an unreasonable restraint of trade. Under this analysis, the legality of the restraint is determined by whether it merely regulates or promotes competition or whether it suppresses competition. The document states that the plaintiffs have not provided adequate facts to support their claims under this legal framework.

The legal excerpt outlines several critical points regarding the sufficiency of allegations made in the Second Amended Complaint (SAC) related to Tradeweb and its competitive practices. It emphasizes that the SAC fails to define Tradeweb’s product or market, including its market share or power, and does not demonstrate Tradeweb's presence in any relevant market. Importantly, there are no allegations detailing the pro-competitive benefits or anti-competitive harms stemming from Tradeweb's actions post-2007. Even if an agreement among Dealers to terminate a plan for an all-to-all trading platform was adequately pled, the SAC does not provide facts that would imply this agreement was anti-competitive under the rule of reason.

Additionally, the SAC’s claim regarding the concealment of the Dealers' majority interest in Tradeweb NewMarkets is deemed inaccurate, as securities filings disclosed the Dealers' stakes in entities related to Tradeweb’s business. Even if this concealment were valid, it would not itself establish an anti-competitive agreement, serving instead as circumstantial evidence.

The excerpt also addresses allegations from 2007 to 2012 concerning a conspiracy among Dealers related to OTCDerivNet, an entity formed to secure control over the IRS clearinghouse, SwapClear. The SAC claims that the Dealers, through OTCDerivNet, engaged in discussions to limit buy-side access to IRS clearing. However, while these allegations indicate communication among Dealers, they do not substantiate claims of a broader conspiracy to block all-to-all trading or attribute the lack of buy-side central clearing to the Dealers, especially since OTCDerivNet was established seven years prior to the alleged conspiracy.

The allegations regarding the purported boycott of the CME product between 2007 and 2012 are contradicted by the plaintiffs' original complaint, which acknowledged that the CME had never launched the product in question. The Second Amended Complaint (SAC) fails to substantiate the claim of a boycott, presenting only vague and conclusory statements without identifying specific actions taken by any Dealers. Although the Dealer Defendants recognized a potential threat from CME's capabilities, the SAC does not claim that they boycotted CME’s clearing services, focusing instead on a product that was never available. Post-2008 financial crisis, the SAC notes that Dealer-controlled SwapClear introduced an IRS clearing product for the buy-side, contradicting the notion of a conspiracy to restrict access.

Furthermore, the SAC alleges that Dealers conspired through trade associations, but these claims lack specificity and merely assert legal conclusions without providing sufficient evidence of an actual conspiracy. The mere existence of meetings and potential opportunities for collusion does not imply illegal activity. The SAC's few well-pleaded allegations of coordinated behavior among Dealers during the specified period do not convincingly support an inquiry into the existence of the so-called “plus factors” necessary for establishing conspiracy. While a high level of interfirm communication is noted, the SAC inadequately demonstrates the other two required factors for conspiracy, including a common motive to conspire.

The SAC claims that many Dealers preferred RFQ trading and perceived all-to-all exchange trading as a long-term threat to profit margins. However, before 2013, all-to-all exchange trading was non-existent, and the SAC fails to allege any imminent central clearing necessary for such trading prior to Dodd-Frank. Consequently, there was little motivation for the Dealers to conspire against all-to-all trading during the 2007-2012 period. Additionally, the SAC does not provide evidence of individual Dealers acting against their economic self-interest or demonstrating a manifest agreement not to compete. The closest allegation of coordination involves the Dealers' joint venture to control Tradeweb, which does not adequately suggest an illegal agreement to thwart all-to-all trading. Thus, the SAC has not plausibly alleged a conspiracy among the Dealer Defendants during 2007-2012, leading to its dismissal under antitrust claims.

In contrast, for the period of 2013-2016, the SAC alleges a recognized per se unlawful group boycott conspiracy. During this time, five platforms for all-to-all exchange trading emerged, and the SAC claims the Dealer Defendants conspired to deprive the first three platforms—Tera, Javelin, and TrueEx—of liquidity to undermine them. The SAC points to parallel conduct among the Dealers, who collectively refused to trade on these platforms and provided similar justifications for their actions, indicating a potential agreement.

Multiple Dealers employed consistent language when justifying to affiliated Interdealer Brokers (IDBs) their refusal to permit trading on the Tera platform, labeling it a “Trojan Horse” and expressing a desire not to let Tera “off the mat.” During meetings with both Javelin and Tera, these Dealers sought methods to undermine the platforms. Notably, Goldman Sachs executives interrogated Javelin regarding its trading policies and attempted to identify buy-side customers to discourage their participation. Morgan Stanley similarly requested a list of interested buy-side customers from Javelin. 

Meetings arranged with Tera by several Dealers, including Goldman Sachs, Barclays, and Bank of America, were characterized by deceptive “bait and switch” tactics, where Tera personnel expected discussions about signing up for its platform but were instead confronted by the Dealers' strategic investment groups proposing to invest in TeraExchange, allegedly to gain control and potentially shut it down.

Additionally, the Dealers' affiliated Futures Commission Merchants (FCMs) withheld clearing services from both Javelin and Tera, thereby obstructing their market entry despite the revenue loss this caused. These FCMs routinely provided clearing services for other platforms that did not offer significant anonymous all-to-all trading, such as Tradeweb and Bloomberg. Specific FCMs, including Barclays and Deutsche Bank, refused credit checks for customers on the Javelin platform, echoing similar justifications regarding required reviews.

Following Tera’s first interest rate swap (IRS) trade on June 13, 2014, BNPP’s trading desk, informed by its affiliated FCM, threatened the transaction parties with a loss of clearing and banking services if they continued to trade on Tera. Subsequently, four Dealers—BNPP, Citi, J.P. Morgan, and UBS—informed Tera they would not clear trades until a review of Tera’s rulebook was conducted, despite the CFTC having already reviewed this standardized document prior to Tera's temporary SEF registration. Other Dealers subsequently invoked the need for similar rulebook reviews as a reason to refrain from trading on Tera.

Barclays, Goldman Sachs, Morgan Stanley, and other Dealers expressed a need to review their rulebooks and communicated skepticism to TeraExchange personnel regarding the platform's potential success. They exerted pressure on clients, discouraging them from trading on Tera and Javelin, and penalizing those who did. Furthermore, Dealers quoted significantly higher clearing fees for trades on these platforms compared to more favorable Dealer-oriented platforms. Smaller inter-dealer brokers (IDBs) faced similar treatment, as Dealers blocked access to Tera's SEF services.

The practice of "name give-up," requiring the disclosure of swap counterparties’ identities, was enforced by the Dealers, which hindered buy-side customers from trading on IDBs’ electronic platforms. MarkitSERV facilitated this practice, sharing counterparties’ identities. When an interdealer SEF, GFI, announced plans for anonymous trading in 2014, it faced intense pushback from Dealers, leading to a retraction of that decision. Another SEF, Tradition, cited similar dealer pressure for its decision against anonymous trading.

The Dealers collectively influenced Tradeweb, which could have launched an anonymous trading platform, not to pursue that direction. The allegations of parallel conduct suggest a plausible conspiracy among Dealers to boycott new trading platforms, particularly from 2013-2016, contrasting with earlier isolated acts. While the Dealers argue that their refusal to engage with the new platforms could be explained by individual business decisions, the SACs allege a coordinated plan to undermine these platforms, driven by the threat they posed to the Dealers' profitability, as all-to-all trading could significantly reduce their margins.

The decisions by each Dealer to avoid startup platforms are unremarkable and do not indicate a conspiracy when considered in isolation, similar to the actions of phone companies in the Twombly case. In Williams v. Citigroup, the alleged conspiracy among investment banks to boycott a new financing structure was deemed implausible, as the conduct suggested unilateral actions aimed at preserving individual market positions rather than coordinated efforts. However, the situation becomes problematic for the Dealers when examining specific coordinated behaviors, particularly on June 16, 2014, following Tera’s initial IRS trade. On that day, four Dealers (BNPP, Citi, J.P. Morgan, and UBS) contacted Tera and uniformly demanded a review of Tera’s rulebook before clearing trades, which indicates possible collusion. Despite the claim that the Dealers independently knew of Tera’s trade, the simultaneous and identical demands raise suspicions of collaboration. Additional allegations suggest the Dealers’ interest in Tera's rulebook was merely a pretext, as the rulebook had already received provisional approval from the CFTC, and no Dealer completed the audit they requested. Further evidence of coordinated behavior includes actions that created barriers for new platforms, such as denying pre-trade credit checks, holding meetings to extract information, and pressuring clients not to engage with Tera or Javelin. These actions, while not inherently illegal, suggest a shared goal among Dealers to obstruct the emergence of new competitors, reinforcing the inference of coordinated efforts rather than solely independent decision-making based on a desire to maintain the status quo.

A Dealer not interested in engaging with new trading platforms had the option to simply refuse participation. The Second Circuit identified three "plus factors" that support the inference of a conspiracy among Dealers. First, there is a common motive to maintain the profitability derived from non-anonymous RFQ trading with the buy-side, as a successful conspiracy could limit the liquidity available to new platforms, jeopardizing their viability. Second, the allegations indicate a significant level of communication among Dealers, including high-level discussions, monthly meetings of trading desk heads, and shared participation in trade associations, which suggests coordinated efforts against the emergence of new platforms. Furthermore, personnel often moved between firms, strengthening these ties. While the third factor—actions against self-interest—only slightly bolsters the conspiracy claim, it notes that Dealers instructed their FCM affiliates to forgo fees by not clearing trades on the new platforms. However, this focus on FCM profitability is narrow, as the main allegation is that preventing new platforms preserved the Dealers' profit margins. Additionally, various incidents suggest circumstantial support for the conspiracy claim, including requests for modified non-disclosure agreements to facilitate discussions about the Javelin platform and the sharing of information regarding buy-side firms considering trading with Javelin, indicating coordination among Dealers to pressure customers away from these platforms.

Citadel Fixed Income Master Fund, a buy-side entity, engaged in IRS trades on Javelin from January to April 2014 but subsequently ceased trading due to pressure from Dealer Defendants, as noted by Citadel's COO. Similarly, Mitsubishi reported that J.P. Morgan's FCM pressured it to stop trading on Javelin, highlighting a pattern of pressure from Dealers to boycott new trading platforms. Additionally, a small IDB's CEO relayed that it could not transact with Tera due to Dealer opposition. These accounts suggest a coordinated effort by Dealers to undermine competition and support allegations of a group-boycott conspiracy among Dealer Defendants from 2013 to 2016, potentially violating the Sherman Act. The court found that the plaintiffs provided sufficient factual basis for discovery, despite defendants' claims of improper group pleading. While some allegations against the Dealer Defendants were broad, the complaints also contained detailed accusations against individual defendants, naming specific actions taken against entities like Javelin and Tera. The overall evidence presented supports the existence of a conspiracy, with adequate individual culpability established for each Dealer Defendant, except for Dealer HSBC. The court concluded that the complaints sufficiently informed the defendants of the claims against them and the grounds for those claims, aligning with legal standards for conspiracy allegations.

Defendants argue that the Second Amended Complaints (SACs) fail to demonstrate uniformity among Dealers in practices alleged to support a boycott. Notably, RBS initially engaged with Javelin before retracting, and only six Dealers are reported to have declined to use the TrueEx platform. Plaintiffs' claims regarding Dealers preventing affiliated Futures Commission Merchants (FCMs) from clearing trades lack specific examples for eight FCMs regarding Javelin and six for Tera. However, the court emphasizes that unanimity is not a requirement at the pleading stage; instead, the focus is on whether the allegations, when viewed collectively, reasonably suggest a conspiracy. The court cites relevant case law to support that parallel conduct does not need to be simultaneous or identical, and variations in pricing do not negate the possibility of a group boycott. The inconsistency in Dealer actions does not undermine the conspiracy claim, as conspiratorial actions can be non-uniform yet still contribute to a common goal. The failure to provide comprehensive allegations against each Dealer is not fatal, as plaintiffs may lack complete information at this stage. 

Defendants also highlight "important market realities" based on secondary materials that they believe contradict the alleged group boycott. These materials include industry articles, CFTC submissions, and findings related to Dodd-Frank swap-trading rules. Defendants assert that these realities indicate limited buy-side support for all-to-all trading, referencing a Federal Reserve study that found most interest rate swaps (IRS) were customized and infrequently traded compared to other securities. Additionally, the CFTC reported that buy-side entities favored maintaining Request for Quote (RFQ) trading alongside order-book trading.

RFQ trading has been favored by buy-side entities for facilitating customized trades and reducing costs, prompting the CFTC to authorize it on SEFs and to lower the minimum number of RFQ recipients from five to three. Evidence suggests that RFQ trading is more popular than order-book trading, as it offers better pricing according to buy-side perspectives. Among the three trading platforms—Javelin, Tera, and TrueEx—TrueEx has garnered significant support, with over 17 IRS dealers actively trading and notable backing from J.P. Morgan and UBS. TrueEx reportedly handles up to 38% of trading in its markets. 

In contrast, the lack of traction for Javelin and Tera is attributed to factors beyond a boycott; Tera is criticized for not actively recruiting dealers, while Javelin had earlier support from RBS and UBS. Additionally, delays in connecting Javelin and Tera to credit hubs may have influenced trade clearance decisions. The parties involved dispute the appropriateness of using Secondary Materials to challenge the SACs’ group boycott claim, with defendants arguing for their relevance and plaintiffs cautioning against relying on these materials to assert truth. Judicial notice can be taken of the existence of public filings and documents, but not necessarily their truthfulness, as established in relevant case law.

Judicial notice is deemed improper when a court relies on materials to contradict the plaintiffs' factual assertions. A court accepts as true only the factual allegations contained in the Complaint during a motion to dismiss and will not take judicial notice of the entirety of external articles cited. Limited references to documents do not allow for their wholesale incorporation into the Complaint. Defendants cannot utilize sources cited in the plaintiffs' Second Amended Complaints (SACs) to create a counter-narrative. While defendants may argue implausibility, they cannot extract facts from secondary sources to construct an alternative narrative that conflicts with the well-pled allegations in the SACs. The possibility of a conspiracy among Dealers to hinder new trading platforms remains plausible, although it may be less significant than portrayed in the SACs. The court will not choose between two plausible inferences at the Rule 12(b)(6) stage; rather, an antitrust plaintiff must only suggest that an agreement exists without needing to prove its likelihood. The court acknowledges that the defendants' market realities may challenge the plaintiffs' theories but expects these matters to be explored during discovery.

On a motion to dismiss, the Court cannot dismiss the plaintiffs' well-pleaded claim regarding a group boycott among Dealer Defendants from 2013 to 2016 based solely on defendants' interpretations of market realities. The Court denies the motion to dismiss this claim for that period. Individual defendants, including BNPP, UBS, and HSBC, argue that despite the sufficiency of general conspiracy allegations, specific facts do not connect them to the conspiracy. BNPP claims the complaints lack allegations of its involvement in initiatives like Tradeweb or Project Fusion and that there are no direct allegations of its actions against TrueEx. However, a conspiracy can be established through circumstantial evidence, and it is not necessary for a defendant to know all details or all other conspirators for liability to attach. BNPP is implicated as one of the four Dealers who called Tera on June 16, 2014, for an audit following Tera's first IRS trade and is alleged to have threatened increased clearing fees for buy-side firms trading on Javelin and Tera, which links it to the conspiracy.

UBS argues its public opposition to the practice of "name give-up" undermines its involvement in the conspiracy; however, it is similarly accused of coordinating with other Dealers to audit Tera's rulebook immediately after its first trade, sustaining the claims against it.

UBS is implicated in the alleged conspiracy due to its refusal to participate in the new all-to-all trading platforms, despite its opposition to "name give-up," which does not negate the plausibility of its involvement. Conversely, HSBC's involvement is deemed insufficient as the allegations against it lack specificity, showing no direct actions against all-to-all trading platforms or customers. The sole claim against HSBC pertains to its refusal to clear trades for TeraExchange after multiple successful demonstrations, which fails to establish a link to the alleged conspiracy.

ICAP, a London-based inter-dealer broker, faces claims related to its actions in 2009 and 2013. In 2009, it allegedly agreed with the Dealer Defendants not to expand its i-Swap platform into the U.S. following Tradeweb's launch of Dealerweb, which threatened ICAP's market share. Plaintiffs assert that ICAP threatened to launch an all-to-all trading platform, but later agreed to a détente with the Dealer Defendants to avoid such competition. However, the claims against ICAP are insufficient to demonstrate plausible participation in a conspiracy, as the SAC fails to provide direct evidence of the alleged détente or establish a prior conspiracy among Dealer Defendants, rendering the allegations circumstantial and unconvincing.

The allegations against ICAP fail to establish a conspiracy. Maintaining its existing European business model and not pursuing a new venture in the U.S. does not imply agreement with the Dealers. The Second Amended Complaint (SAC) lacks claims that ICAP’s competitors offered an anonymous all-to-all electronic exchange, that the necessary clearing infrastructure existed, or that there was market demand for such an exchange at the relevant time. Additionally, there are no allegations of ICAP taking actions to further a conspiracy against buy-side all-to-all IRS trading, such as punishing buy-side entities or restricting access to clearing services.

In 2018, ICAP launched the ICAP SEF electronic trading platform for IRS trades, but plaintiffs argue it limited participation to Dealers, which they claim was against its self-interest. They also criticize ICAP for maintaining a "name give-up" protocol that hindered buy-side trading. Plaintiffs suggest that in return for ICAP not creating a U.S. platform for anonymous trading, the Dealers supported ICAP's business. However, these claims do not provide direct evidence of ICAP joining the alleged Dealer conspiracy, as there are no communications between ICAP and the Dealers post-2013 to substantiate any agreement.

The timing of ICAP's platform launch in 2013 aligns with the Dodd-Frank Act's implementation, a period when many firms initiated U.S. trading platforms. Furthermore, the SAC contradicts itself by acknowledging that the SEF is accessible to buy-side entities, despite the name give-up requirement. The use of such a protocol is common among interdealer SEFs, including those not involved in the conspiracy, and is reportedly favored by Dealers to maintain liquidity. The absence of allegations showing ICAP’s actions to disadvantage the buy-side reinforces the conclusion that the claims against ICAP are conclusory, leading to the dismissal of the claims against them.

Tradeweb operates fixed-income and derivatives trading platforms, primarily for interest rate swaps (IRSs), and has been majority-owned by Dealers since 2007, who hold seats on its board. The legal discussions focus on the period from 2007 to 2012, where the Court dismissed claims related to Tradeweb's involvement in an alleged conspiracy among Dealers to boycott competing all-to-all IRS trading platforms such as Javelin, Tera, and TrueEx, which emerged in 2013-2014 due to Dodd-Frank’s clearing mandate. 

Post-2012, the complaints assert three main points linking Tradeweb to the conspiracy: (1) Tradeweb allegedly facilitated secret discussions among Dealers under the guise of a legitimate operation; (2) it has not created an anonymous all-to-all IRS trading platform for the buy-side; and (3) after Dodd-Frank, Tradeweb maintained two swap execution facilities (SEFs): Dealerweb SEF, exclusive to Dealers with high fees, and Tradeweb SEF, open to non-dealers with lower fees. 

However, these allegations fail to connect Tradeweb to the specific conspiracy to undermine the new platforms, as they do not mention these platforms directly. The claim that Dealers’ ownership of Tradeweb allowed for conspiratorial opportunities is deemed inadequate without factual evidence of actual collusion. Additionally, the lack of an anonymous trading platform does not constitute a violation of regulatory requirements, as the CFTC did not mandate such a platform. Overall, the allegations are insufficient to implicate Tradeweb in the alleged conspiracy.

Tradeweb had the unilateral right to operate its business model without anonymous trading, and its decision not to adopt anonymous all-to-all IRS trading does not imply participation in a conspiracy against competitors. Plaintiffs failed to demonstrate how Tradeweb's approach would support a conspiracy aimed at harming new entrants like Javelin, Tera, and TrueEx. The plaintiffs did not assert that Tradeweb possessed market power or engaged in actions to divert customers from these competitors. Instead, they characterized both Dealerweb SEF and Tradeweb SEF as largely irrelevant, noting that Dealerweb’s IRS market share remained low, likely to sustain a "détente" with ICAP and other inter-dealer brokers (IDBs). Tradeweb SEF was described as inactive, and while plaintiffs criticized the pricing structure of Tradeweb's SEFs, claiming it forced buy-side participants to reveal their identities, they did not adequately explain how this pricing hindered competing platforms. The inference drawn was that making Tradeweb SEFs less appealing would enhance the attractiveness of alternative platforms. Moreover, Tradeweb, not being a dealer, couldn't obstruct access to Javelin, Tera, or TrueEx. Consequently, claims against Tradeweb were dismissed.

On the statute of limitations, a Sherman Act claim has a four-year limit from the date of injury. The plaintiffs filed their initial complaint on November 25, 2015, leading defendants to argue that claims based on injuries before November 25, 2011, are time-barred. The plaintiffs contended that the statute should be equitably tolled due to fraudulent concealment. The court highlighted that to establish fraudulent concealment, plaintiffs must plead specific elements: the defendant concealed the cause of action, the plaintiff remained unaware until within the four-year window, and this ignorance was not due to a lack of diligence. The court found that the plaintiffs had not plausibly pled pre-2013 claims of conspiracy, which independently negated the pre-2012 claims.

The court addresses the doctrine of equitable tolling in cases of fraudulent concealment, emphasizing that it prevents wrongdoers from exploiting the statute of limitations by hiding illegal activities. The plaintiffs allege that the defendants concealed their control over Tradeweb, which allegedly hindered the emergence of all-to-all IRS trading platforms. However, the court finds that the plaintiffs fail to demonstrate fraudulent concealment, as the nature and offerings of Tradeweb were never hidden. The majority ownership of Tradeweb by the Dealers was publicly disclosed in 2007 through a press release and subsequent SEC filings, negating claims of concealment. Furthermore, while plaintiffs argue that the scheme was "self-concealing" due to secretive meetings, the court concludes that such a claim does not apply, as the nature of the alleged actions did not require concealment to succeed, given the visible operations of Tradeweb and the Dealers' ownership.

Plaintiffs argue that prior to 2012, the benefits of all-to-all trading were well recognized, making a transition to such trading inevitable without any conspiracy. They assert that the lack of evolution in the IRS market by 2008 for all-to-all electronic trading is contrary to market expectations. Plaintiffs claim that price increases during this period cannot be attributed to normal market forces and suggest that the alleged pre-2012 conspiracy was facilitated by dealers' memberships in trade associations, despite these claims being described as general and conclusory. The court finds that these allegations do not satisfy the burden of proving concealment necessary for fraudulent concealment claims. The plaintiffs’ assertion that the absence of trading platforms until 2013 indicates conspiratorial manipulation is deemed implausible, with the court suggesting that the lack of platforms could be due to insufficient infrastructure, such as central clearing. Furthermore, the court contends that the plaintiffs were on inquiry notice of potential wrongdoing due to the public availability of information and that they failed to demonstrate due diligence or any inquiries made in response to this information regarding their pre-2012 claims.

Plaintiffs failed to demonstrate specific inquiries made to Merrill Lynch regarding alleged fraudulent concealment, lacking details about when these inquiries occurred, who was contacted, and the responses received. They argued that they monitored their investments and consulted with investment managers, but claimed they only became aware of a conspiracy in June 2014. The court, having already resolved the first two elements of fraudulent concealment in favor of the defendants, opted not to evaluate the adequacy of the plaintiffs' diligence pre-2014, deeming such an inquiry unnecessary given the dismissal of pre-2012 claims for lack of plausible allegations. Consequently, the court ruled that the plaintiffs did not establish fraudulent concealment, rendering their claims for injuries before November 25, 2012 time-barred.

Regarding antitrust standing under Section 4 of the Clayton Act, which allows private actions for antitrust injuries, the court noted that while defendants did not dispute the antitrust standing of Javelin and Tera or the claim of injury from higher prices due to an anti-competitive boycott, they contested whether the class plaintiffs qualified as "efficient enforcers" of the antitrust laws. The determination of efficient enforcer status involves evaluating factors such as the nature of the injury, the presence of a motivated class for antitrust enforcement, the speculative nature of the injury, and the challenges in identifying and distributing damages to avoid duplicative recoveries.

Proximate causation is a critical factor in determining standing in antitrust cases, as established in Gatt and further emphasized by the Supreme Court. While the importance of various factors may differ based on case specifics, the requirement of proximate causation must be met universally. The third and fourth factors, concerning the difficulty of calculating damages, do not independently negate standing if the plaintiff sufficiently alleges that the defendant's actions have proximately harmed a protected interest. 

Defendants contest each standing factor, particularly focusing on the notion of "directness," which relates to the closeness in the causal chain. In antitrust contexts, this involves assessing whether a plaintiff's injury falls within the risks created by the defendant's alleged conduct. The class plaintiffs argue that the defendants' conspiracy to limit trading options resulted in higher costs for buy-side investors, who were deprived of better pricing opportunities typically associated with competitive trading environments. The plaintiffs claim their injuries are closely linked to the anti-competitive effects of the defendants' actions, drawing parallels to previous rulings where standing was granted based on similar intertwined injuries. 

In the referenced case of Paycom, the merchant alleged that MasterCard's policies led to injuries stemming from reduced competition, highlighting the interconnected nature of competitive conditions and consumer harm. Overall, the allegations present a case for standing based on the assertion that plaintiffs suffered direct injuries as a result of the defendants' anti-competitive behavior.

The Second Circuit rejected the antitrust standing claim by emphasizing that the CPP did not inhibit Paycom from accepting Discover or American Express cards, suggesting that any injury to Paycom would be indirect and contingent on the injuries sustained by Discover and American Express. The court contrasted this case with Judge Cote's analysis in In re CDS, noting that Paycom's causal chain was more attenuated compared to a direct dealer conspiracy affecting price competition. In the cited case, the absence of the CPP could have led to MasterCard banks acting as issuers for alternative payment options, potentially pressuring MasterCard to adapt its policies. In contrast, the plaintiffs in this case argue that the defendants' agreement to block a CDS exchange would have allowed them to bypass inflated bid/ask spreads directly. Other cases referenced involved complex causal relationships across various markets, unlike the singular market focus here.

Regarding the plaintiffs' standing, the court analyzed whether the group of plaintiffs had a self-interest motivating them to enforce antitrust laws. It referenced precedents indicating that buyers and sellers in securities markets, such as those affected by collusion, are typically deemed proper plaintiffs. The defendants did not dispute that the class plaintiffs would meet this standard on their own, as they claimed to have suffered direct financial injuries from the defendants' alleged actions against emerging IRS trading platforms. This aligns with established views that such plaintiffs would be motivated to uphold the public interest in antitrust enforcement.

Defendants contend that Javelin and Tera, as direct victims of the alleged antitrust violation, are “more efficient enforcers” than the class plaintiffs, suggesting that the latter are “not necessary” for the case. They argue that the absence of claims from these direct victims implies the class's claims may be dubious. However, courts have acknowledged that while the existence of a superior victim can raise questions about the validity of a plaintiff's claim, it does not warrant dismissal of the class plaintiffs. The defendants fail to cite any precedent where a qualified plaintiff was dismissed solely due to a co-plaintiff being a superior enforcer. The collaboration between the class and Javelin/Tera plaintiffs enhances antitrust enforcement, as class counsel has been instrumental in the investigation and initial complaint, indicating a well-coordinated legal strategy.

On the issue of speculative injury, defendants argue that the class plaintiffs' claims of injury prior to 2013 are overly conjectural. The court finds merit in this argument, noting that the claims lack plausibility if not dismissed on other grounds. Specifically, the assertion that the necessary infrastructure for anonymous all-to-all trading would have developed without the alleged collusion is considered uncertain. Thus, the plaintiffs' historical account of IRS trading during the class period is deemed too speculative to support a viable claim of class injury.

Class plaintiffs' claim of injury is deemed too speculative and lacking a concrete causal link to anticompetitive effects and damages, as established in *Payeom*. For the period of 2013-2016, their injury theory is restricted to interest rate swaps (IRS) suitable for anonymous all-to-all trading, which would not include bespoke trades that necessitate individual negotiations or do not fit the commoditization model. For instance, a municipality seeking IRS to manage floating interest rate risks associated with long-term bonds may not find suitable offers on anonymous exchanges, thus requiring a more tailored approach through a request-for-quote (RFQ) process.

The plaintiffs' proposed class is overly broad, including all entities that entered into various types of IRS with the Dealer Defendants since January 1, 2008. While class counsel argued that all-to-all trading platforms would enhance market transparency and competition, they later clarified that the class should be limited to "plain vanilla swaps." The court mandates adherence to this limitation and identifies that any claims regarding other types of trades would necessitate excessive inference, rendering them speculative.

The plaintiffs support their theory with empirical research and analyses indicating that transitioning to exchange trading has historically led to significant price reductions for buyers. The court finds their claims sufficiently grounded, unlike past speculative claims in the CDS market.

Lastly, the court determines that there are no concerns regarding duplicative recoveries, as class plaintiffs are pursuing damages based on price overcharges due to wider bid-ask spreads, while other plaintiffs are claiming lost profits, ensuring distinct claims and recovery paths.

Defendants contend that apportioning damages would be overly complex, asserting that class and Javelin/Tera damages might be negatively correlated, potentially affecting the Dealers' involvement in IRS business if profit margins declined. However, it is also plausible that Dealers would continue trading at reduced profit levels. This uncertainty regarding the relationship between the damages theories does not warrant dismissal of the class plaintiffs' claims. The Court concludes that class plaintiffs, with certain limitations, are effective enforcers and possess antitrust standing similar to Javelin and Tera.

Regarding the defendants' argument that the Commodities Exchange Act and the Dodd-Frank Act implicitly preclude the plaintiffs’ claims, the Court references the Supreme Court's decision in Credit Suisse Securities (USA) LLC v. Billing, which indicated that the application of antitrust laws may be precluded by federal regulatory frameworks. The Court identified four factors to determine whether securities laws are incompatible with antitrust laws: 1) the context of securities regulation, 2) SEC authority, 3) ongoing SEC regulation, and 4) potential conflict between the two regulatory regimes. The Second Circuit similarly applied these factors in Electronic Trading Group v. Banc of America Securities LLC, concluding that antitrust claims were precluded. However, the Court finds the Billing framework inapplicable here, as it is intended for cases where regulatory statutes do not address antitrust issues.

The court's inquiry into the potential conflict between antitrust and regulatory provisions is guided by the Billing factors, which assess whether there is a clear incompatibility between the statutes. The Supreme Court has noted that some regulatory statutes explicitly state their relationship to antitrust laws, exemplified by the Webb-Pomerene Act, which grants antitrust immunity, and the Telecommunications Act of 1996, which maintains the application of antitrust laws. When Congress articulates its intent regarding antitrust law applicability, courts must adhere to that directive. 

Dodd-Frank includes an "antitrust savings clause," ensuring that it does not modify or supersede antitrust laws unless explicitly stated. The term "antitrust laws" is defined to include the Sherman Act, parts of the Wilson Tariff Act, and the Clayton Act. Consequently, a Billing inquiry into implied preclusion is unnecessary, as the focus shifts to statutory interpretation to determine if Dodd-Frank modifies antitrust statutes. 

In the case of In re CDS, Judge Cote found that Dodd-Frank does not reference the Sherman Act and only modifies the Clayton Act in irrelevant provisions. Thus, she concluded that Dodd-Frank does not negate the enforcement of antitrust laws, which remain applicable. The court agrees with this analysis, noting that Dodd-Frank lacks references to existing antitrust laws, and the specific provisions related to the Clayton Act do not apply to the current case. The defendants attempt to highlight other provisions concerning swap dealers; however, these do not alter the overall applicability of antitrust laws under Dodd-Frank.

Antitrust considerations for swap dealers dictate that they must not take actions that lead to unreasonable trade restraints or impose significant anti-competitive burdens, as outlined in 7 U.S.C. 6s(j)(6) and 15 U.S.C. 78o-10(j)(6). Defendants claim these provisions fall under an exception to the antitrust savings clause, suggesting the introductory clause allows for implied preemption based on the "Billing factors." This argument is rejected for two main reasons. 

First, the swap dealer provisions do not explicitly reference existing antitrust laws, thus they do not override these laws but rather impose additional duties on swap dealers that extend beyond current antitrust requirements. The provisions prohibit actions that may result in unreasonable trade restraints, which is a broader standard than the Sherman Act's focus on conspiracies in restraint of trade.

Second, even if the introductory clause could potentially override existing antitrust laws, it would not support the broad inquiry defendants suggest. Instead, the focus would be on whether the alleged conduct was necessary or appropriate to fulfill Dodd-Frank's objectives. The defendants’ alleged actions, specifically a conspiracy to boycott trading platforms, do not meet this standard. Consequently, the antitrust savings clause remains applicable.

Dodd-Frank Act preserves plaintiffs' claims rather than undermines them, with the Court acknowledging a defense concern regarding inconsistencies between plaintiffs' arguments and the CFTC’s regulatory framework. The Court will not allow arguments that contradict statutory and regulatory designs and may entertain motions to exclude such advocacy. 

Regarding state-law claims, defendants seek to dismiss plaintiffs' claim under New York's Donnelly Act, an antitrust statute. The Court has upheld the §1 claim for the period 2013-2016, excluding defendants HSBC, ICAP, and Tradeweb from this claim. Defendants argue the Donnelly Act is inapplicable if the alleged conduct mainly affects interstate commerce; however, the plaintiffs provided sufficient allegations of both interstate and intrastate commerce impacts, including that their principal places of business and many defendants are located in New York. Consequently, the Court dismisses the Donnelly Act claims against HSBC, ICAP, and Tradeweb entirely, while allowing claims against other defendants for the designated period.

Additionally, plaintiffs Javelin and Tera assert a claim of tortious interference with business relations under New York law, requiring proof of a business relationship, intentional interference by the defendant, malicious intent or improper means, and injury to the relationship. The Court references relevant case law to outline the necessary elements for this claim.

The tort of interference with prospective business relations is challenging to prove, requiring more specific allegations than those needed for interference with an existing contract. The court dismissed the claim in the JTSAC due to inadequate pleading, noting that it only contained boilerplate language without identifying specific customers or the nature of the prospective business relations allegedly interfered with by the Dealer Defendants. While the JTSAC vaguely asserts a wrongful purpose, it fails to specify any particular customer relationship that was impacted. To establish a plausible claim, plaintiffs must provide factual allegations demonstrating that they would have engaged in contracts with specific prospective advertisers but for the defendants' actions. The absence of a specific third-party business relationship is a critical flaw.

Both complaints also assert unjust enrichment claims under New York law, which require that (1) the defendant was enriched, (2) at the plaintiff's expense, and (3) retaining the benefit would be unjust. The essence of unjust enrichment is that one party benefits financially at the expense of another. The court acknowledged that if the underlying claims were found deficient, the unjust enrichment claims would also fail, as they rely on the viability of the underlying illegality. Defendants contended that the complaints failed to show that plaintiffs conferred a benefit. However, the SAC sufficiently alleges that the plaintiffs directly traded interest rate swaps (IRS) with the Dealer Defendants, allowing them to profit from inflated bid/ask spreads, thereby stating a valid unjust enrichment claim.

Dealers allegedly profited at the expense of the class by widening the bid/ask spread, which was facilitated by undermining more favorable trading platforms like Javelin and Tera. The JTSAC's claim of unjust enrichment against the Dealers relies on an indirect theory, suggesting that the Dealers' actions destroyed Javelin and Tera, resulting in lost per-transaction revenue for these firms while allowing the Dealers to benefit from higher trading spreads. However, this claim is deemed too indirect to support an unjust enrichment claim, as courts require evidence of a specific, direct benefit received by the defendant from the property in question. 

Judge Caproni emphasized that unjust enrichment claims necessitate a substantive relationship between the parties involved. Previous case law indicates that absent a direct or indirect relationship, unjust enrichment claims cannot be sustained. Consequently, the court dismissed the unjust enrichment claims brought by Javelin and Tera and against defendants HSBC, ICAP, and Tradeweb entirely. However, it denied the motion to dismiss unjust enrichment claims from the class plaintiffs, limiting these to the period of 2013-2016.

The court's conclusions include: 
1) Granting the defendants' motion to dismiss class plaintiffs’ Sherman Act claims for the period 2008-2012 but denying it for 2013-2016; 
2) Granting the motion to dismiss Javelin and Tera’s claims of tortious interference; 
3) Denying the motion to dismiss Javelin and Tera’s claims under the Donnelly Act, limited to 2013-2016.

The Court has granted defendants' motion to dismiss the unjust enrichment claims of plaintiffs Javelin and Tera while denying the motion for class plaintiffs, restricting their claims to the period of 2013-2016. All claims against defendants HSBC, ICAP, and Tradeweb are dismissed, and all other motions to dismiss are denied. The Clerk of Court is instructed to terminate pending motions, with an order for next steps forthcoming. The Dealer Defendants include major financial institutions such as Bank of America, Barclays, BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, J.P. Morgan, Morgan Stanley, RBS, and UBS, including their affiliates and subsidiaries. The Court's decision on motions to dismiss is based solely on the facts in the complaint, attached documents, and publicly available records. Disputes exist regarding the admissibility of statements in these materials for their truth. The Court has relied only on cited materials. Additionally, the regulations state that swaps subject to the SEF mandate can be traded on designated contract markets, with specific requirements for RFQ trading and exemptions for certain swaps and end users. Market participants must prepare for various costs associated with compliance, including technology, legal agreements, and collateralization.

Plaintiffs claim that Barclays was initially excluded from the Tradeweb consortium by other dealers due to being put in a "penalty box" for attempting to create a dealer-to-client IRS electronic trading platform without consent. Once Barclays' penalty expired, they were allowed to acquire a "minority equity stake" in 2009. The Second Amended Complaint (SAC) alleges that trading desk heads from the Dealer Defendants communicated via emails and texts, expressing a desire to maintain the status quo. The document references the master case docket No. 16-*460MC-2704 for significant filings.

The SAC includes an allegation of a threat made between 2007-2012 against an inter-dealer broker (IDB) platform for granting buy-side access. In 2009, GFI Group's attempt to introduce anonymous trading was reportedly halted by collective threats from Dealer Defendants, causing GFI to retract. Furthermore, in 2008, the CME's announcement of a new clearing product raised concerns among Dealer Defendants, who viewed it as a threat to their business model. In response, they boycotted the CME’s Swapstream platform and chose to clear only interdealer IRS trades through SwapClear, leading to the failure of CME's clearing solution.

The SAC notes that the cost of clearing and collateral requirements recognized by the CFTC complicate the inference of collusion among the Dealers. It also clarifies that BNPP and HSBC did not participate in Project Fusion or invest in Tradeweb, and it does not suggest that Tradeweb was an unattractive investment. Supporting the legitimacy of the Dealers' investment, the SAC cites the $280 million investment in Tradeweb, shared ownership with Thomson, and adherence to corporate formalities post-acquisition.

Tradew-eb expanded its trading platform but delayed offering an all-to-all Interest Rate Swap (IRS) trading platform until 2013, aligning its operations with other trading platforms like Tera, Javelin, TrueEx, and Bloomberg. The plaintiffs bear the initial burden to show that the defendants' actions adversely affected overall competition in the relevant market, as antitrust laws focus on competition as a whole rather than individual competitor harm. If plaintiffs meet this burden, the defendants must then demonstrate the pro-competitive benefits of their conduct, after which the burden shifts back to the plaintiffs to prove that these benefits could have been achieved through less restrictive means. The court must weigh the competitive effects of the alleged conduct—advantageous and disadvantageous—to determine its impact on competition.

For the nine-year period covered by the Second Amended Complaint (SAC), the plaintiffs seem to pursue a per se liability theory, although they also claim the alleged agreement is unlawful under the rule of reason. The allegation of a horizontal boycott of three new trading platforms from 2013-2016 constitutes a recognized type of per se illegal conduct, while the period from 2007-2012 lacks similar allegations of per se illegal conduct, as there was no all-to-all IRS platform to boycott until 2013. In response to inquiries about what was being boycotted before 2013, plaintiffs' counsel referred to the "buy side." The plaintiffs also suggested that Project Fusion might face scrutiny under an intermediate "quick look" analysis, but the facts provided do not allow for a proper evaluation of its competitive effects. The court rejected the quick-look analysis for the joint venture marketing activity, noting that the arrangement could potentially have a net pro-competitive effect or no effect at all.

Defendants referenced submissions from buy-side firms to the CFTC, indicating a preference for Request for Quote (RFQ) trading and concerns over costs associated with mandatory central clearing. The court did not rely on these submissions, which would have further indicated that mandatory central clearing lacked universal buy-side support prior to Dodd-Frank. Regarding Tradeweb, the SAC alleges it was a co-conspirator, but does not assert that Bloomberg's platform was part of the Dealer boycott. Additionally, the plaintiffs claim to have presented direct evidence of their allegations.

Monthly meetings among Dealers' Strategic Investment Groups from 2013 to 2015, along with other communications, are alleged to have coordinated positions in the IRS market. However, the allegations regarding these meetings lack specificity and do not constitute direct evidence of an illegal agreement. Plaintiffs contend that it was irrational for Dealers to refrain from trading on new platforms, as they had individual interests in gaining a first mover advantage. Yet, the plaintiffs fail to provide concrete facts indicating that any Dealer faced a significant risk by delaying participation until the viability of the new platforms was established. No factual basis is presented to show how the Dealers learned of a specific trade on June 13, 2014, prior to June 16, 2014. During court proceedings, the possibility of public reporting of the trade was raised, and defendants noted that a subscription service, SEFView, which reported SEF trading, became available in February 2014. Plaintiffs criticized the timing of this assertion and argued against the consideration of extrinsic evidence. Even if the Dealers accessed SEFView and noted the Tera trade before contacting Tera, their simultaneous calls may suggest coordination. Additionally, plaintiffs reference a previous class action concerning credit default swaps (CDS) that survived a motion to dismiss and regulatory investigations related to the CDS market. However, the Court has chosen to disregard these allegations as the civil claims did not yield findings of liability, and the situations involving CDSs differ materially from those involving IRSs. The Court also dismissed characterizations such as "boycott," "conspiracy," and "illegal agreement" as legal conclusions rather than factual allegations, adhering to legal standards set forth in precedents. The entirety of the Second Amended Complaint (SAC) spans 144 pages.

The JTSAC spans 134 pages, with the Court using "2013" as shorthand for the potential start of the alleged conspiracy, although it does not specify when in 2013 this began. Discovery may reveal that the conspiracy started later. The Court has identified sufficient factual allegations linking the remaining Dealer Defendants to the group boycott conspiracy, rejecting plaintiffs' argument that only slight evidence is needed to connect additional defendants once a conspiracy is established, which is inconsistent with Second Circuit standards. UBS's opposition to "name give-up" is considered relevant for this motion. HSBC's lack of stake in Tradeweb, where now-dismissed claims of a pre-2013 conspiracy were focused, is noted. ICAP has demonstrated that its Swap Execution Facilities (SEFs) comply with CFTC rules allowing for post-trade name give-up and that its SEFs are open to buy-side participation. The complaint suggests Tradeweb was functionally inaccessible due to costs associated with its Dealerweb SEF, while complaints regarding non-anonymous IRS trading relate to the Tradeweb SEF. Most defendants were named in the original complaint, with HSBC and Morgan Stanley added later; they argue claims before February 25, 2012, are time-barred. Plaintiffs' reliance on publicly available information predating the limitations period supports the notion of inquiry notice, as plaintiffs cannot claim insufficient detail while simultaneously asserting these facts did not trigger the statute of limitations. The Court dismisses pre-2013 claims for failing to state a claim and does not need to address defendants' alternative argument regarding lack of injury-in-fact for that period. Generally, consumers affected by a conspiracy that alters prices away from ordinary market conditions suffer injuries recognized by antitrust laws. The Court anticipates that discovery will address the specifics of IRS trades to ensure their suitability for exchange trading.