Lies, Damn Lies and Statistics – What the Digital Age Giveth and What the Digital Age Taketh: Trends in Antitrust Class Actions in the Banking Sector.

Lies, Damn Lies and Statistics – What the Digital Age Giveth and What the Digital Age Taketh: Trends in Antitrust Class Actions in the Banking Sector.

 

Banks and the banking sector have long been a target of class action plaintiffs. During the last decade, antitrust class actions, in particular, against banks have surged. These actions have alleged conspiracies regarding, what may seem, every conceivable aspect of the banking industry including LIBOR, SIBOR, EURIBOR, foreign currency, the ISDAfix rate, credit default swaps, interest rate swaps, securities lending, Mexican bonds, US Sovereign Bonds, and the benchmarks for Gold, Silver, Platinum and Palladium, among others. This trend, alleging longstanding conspiracies among banks across the world, coincides with Digital Age.

One might assume that the advent of digital communications has fueled the proliferation of conspiracy allegations against banks. Indeed, never before have communications across banks been more digitized and, likely, in writing. These writings span email, Bloomberg chats, text messages and other forms. Yet, digital footprints and long trails of written communications have not, at least initially, supported many of the conspiracy allegations underlying many of the recent cases against banks. Indeed, strict automatic deletion policies, increasing awareness of the potentially eternal nature of digital communications and the advent of ethereal messaging services have increasingly made the actual communications of defendant bankers less available than more so in the Digital Age.

Yet, while trends in digital communications and retention and destruction may have, in some ways, taken away (or at least reduced) the volume of communications available to Plaintiffs lawyers, the Digital Age has offered a replacement. Increasingly, plaintiffs’ lawyers in antitrust class actions against banks have turned to complex statistical analyses to demonstrate evidence of collusion sufficient to move past the pleading stage. Indeed, banks seem uniquely suited to allegations based on statistical analyses because the banking industry relies upon the publication and availably of vast amounts of data regarding various interest rates and benchmarks, prices, price movements and the like. Increasingly, plaintiffs’ lawyers have, with some success and vigorous opposition from bank defendants, harvested the vast stores of available financial data to develop complex statistical models to support allegations of collusion in the absence of significant digital communications.

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