January 2015 Newsletter


•  What the Publication of the European Union’s Directive of Antitrust Damages Claims Means

•  Scott+Scott Named Co-Lead Counsel in ISDAfix Manipulation Lawsuit

 Scott+Scott Partner Christopher M. Burke Receives Honor for Antitrust Litigation Achievement

•  Scott+Scott Partners Speak on the Antitrust Implications of the Financial Crisis

•  Record Regulatory Fines Collected in 2014

•  Conferences and Educational Seminars


What the Publication of the European Union’s Directive of Antitrust Damages Claims Means

Recently, the European Union published its Directive of Antitrust Damages Claims (the “Directive”) in the Official Journal.  The Directive came into force on December 16, 2014.  Nation states within the EU will have two years to implement the tenets of the Directive into their national legal systems. 

            The Directive is aimed at bridging the needs between public enforcement of competition laws, typically carried out by the European Commission, and the need for private parties that are harmed by the same conduct to have a course of redress for their injuries.  In 2013, the Commission estimated the damages caused by anticompetitive cartels in the EU to be between €25 billion and €69 billion per year. 

            The Directive aims to allow anyone, whether a direct or indirect purchaser, that was injured by the violation of competition law (Article 101/103 of the Treaty on the Functioning of the European Union or similar national competition laws) to bring a private claim for compensation for their injuries.  Compensation includes actual loss and loss of profits, plus interest which runs from the time of the injury.  All participants in a cartel can be held liable for all of the damages inflicted, similar to joint and several liability in the United States.  However, alleged violators are entitled to a pass-on defense, allowing them to attempt to show that a claimant passed on all or part of the supracompetitive price to its consumers. 

            One of the other main issues addressed by the Directive is how to better provide claimants with access to evidence that can help prove their claims.  To this end, once the national courts implement the Directive, those courts can order a defendant or a national competition enforcement authority to turn over evidence.  The standards are similar to those in the United States, in that claimants must specify the relevant categories of evidence that they hope to obtain, but in the context that it would be impossible for claimants to specify evidence that they cannot be sure is in the defendant’s possession.  Further, national competition authorities will only be compelled to hand over evidence if no party or third party is in possession of the evidence. 

            Certain types of evidence are limited, and some are outright prohibited from being turned over.  Documents that cannot be disclosed, referred to as “black-listed,” include leniency statements or settlement submissions made to competition authorities.  This prohibition is limited and does not include documents that pre-existed the settlement submission or leniency application.  Other types of documents can only be turned over after the competition authority has closed its investigation.  These “grey-listed” documents include responses to requests for information, statements of objection, or settlement submissions that have since been withdrawn. 

The Directive gives courts the power to impose penalties for a party’s failure to comply with any disclosure order, destruction of evidence, failure to adhere to protective orders, or breaches of the limits regarding the use of evidence. 

The Directive creates two rebuttable presumptions that aim to help claimants.  The first is the presumption that cartels do cause harm.  The second is that, if a violation caused overcharges to a direct purchaser, indirect purchasers also suffered some injury by inflated prices.  The latter presumption is rebuttable by establishing the above-mentioned pass-on defense. 

            Under the Directive, findings by the European Commission or national competition authorities are considered definitive proof of a violation of the competition laws before a nation’s own civil courts.  Decisions made by another EU member state’s courts can also be used as prima facie evidence that a violation occurred. 

            The limitations period for the filing of follow-on actions for damages has been extended by the Directive.  Claimants have five years from the time they are reasonably able to ascertain damages and identify the infringer, but the limitations period is tolled by any competition authority beginning an investigation.  Tolling ends one year after the relevant decision has become final, meaning all appeals have been completed. 

            The Directive is a welcome addition for those private entities in the EU that have suffered injuries from cartels that violate competition laws.  Its implementation will allow such companies and individuals to bring their own claims in their country’s courts to be compensated for cartelists’ violations.

Table of Contents


Scott+Scott Named Co-Lead Counsel in ISDAfix Manipulation Lawsuit

            On November 25, 2014, the Honorable Judge Jesse Furman of the United States District Court for the Southern District of New York appointed Scott+Scott, Attorneys at Law, LLP as co-lead counsel to represent a class of investors who filed suit against 15 of the world’s largest banks and financial institutions for their manipulation of the ISDAfix benchmark rate.  In doing so, Judge Furman recognized the extensive pre-suit investigation into the wrongdoing that Scott+Scott conducted, as well as the firm’s experience in handling similar complex antitrust and collusion cases.

ISDAfix is a key financial benchmark that is used to determine payments for a wide variety of financial instruments like interest rate swaps, swaptions (swap-options), as well as structured notes and bonds.  ISDAfix is an important benchmark because interest rate swaps and other derivatives are frequently used by public entities and other investors to hedge risks against fluctuating interest rates and market disruptions.  ISDAfix is based on market price submissions that the world’s largest banks make to ICAP, Plc, a financial broker that was long responsible for administering ISDAfix in the United States.  Once the rates are calculated, they are distributed worldwide to banks, corporate treasurers, money managers, and other institutions active in the derivatives markets. 

The plaintiffs in the ISDAfix litigation allege that 15 of the world’s largest banks, including JP Morgan Chase, Bank of America, Citigroup, and others colluded together and with broker ICAP, Plc to submit inaccurate quotes and to delay the publication of pricing updates until after their collusive trades occurred.  In April 2013, Bloomberg reported that the Commodity Futures Trading Commission (“CFTC”) issued subpoenas to as many as 15 dealer banks and to ICAP, Plc regarding their ISDAfix submissions and the process by which the rate is set.  Bloomberg also reported that “[r]ecorded telephone calls and e-mails reviewed by [the CFTC] show that traders at Wall Street banks instructed ICAP, Plc brokers in Jersey City, New Jersey, to buy or sell as many interest-rate swaps as necessary to move the benchmark rate, known as ISDAfix, to a predetermined level[.]”  In September 2014, it was further reported that the United States Department of Justice was alerted by the CFTC that its investigation uncovered evidence of criminal behavior. 

In September 2014, Scott+Scott, along with co-counsel, filed class action lawsuits on behalf of public pension funds and other investors seeking redress for their injuries that resulted from ISDAfix manipulation.  These suits have been consolidated into a master action, Alaska Electrical Pension Fund, et al. v. Bank of America Corporation, et al., Case No. 1:14-cv-07126-JMF (S.D.N.Y.).  If you have purchased interest rate swaps or other financial instruments tied to ISDAfix, please contact Scott+Scott partner Christopher M. Burke at cburke@scott-scott.com to explore potential legal options. 

Table of Contents


Scott+Scott Partner Christopher M. Burke Receives Honor for Antitrust Litigation Achievement

On December 3, 2014, Scott+Scott Partner Christopher M. Burke received honors from the American Antitrust Institute for outstanding antitrust litigation achievement for his work as co-lead counsel for the plaintiff class in Dahl v. Bain Capital Partners, LLC, No. 07-cv-12388 (D. Mass.), which resulted in a $590.5 million settlement of the action.  Plaintiffs alleged that the largest private equity firms in the United States conspired to fix prices paid to shareholders for tendering their shares in multi-billion-dollar leveraged buyouts (“LBOs”) of publicly traded companies between 2003 and 2007.

Scott+Scott and its co-counsel achieved the settlements only after seven years of contentious litigation, which included three phases of fact discovery lasting over four years and unrelenting attacks from Defendants on multiple fronts.  At every stage of the litigation, counsel for Defendants asserted vigorous defenses, and claimed that plaintiffs could not prevail on their claims.  Defendants spared no expense in defending against the claims.  Plaintiffs overcame early efforts to transfer the case to a less favorable venue, dozens of motions to dismiss and for summary judgment, motions for reconsideration, and petitions for interlocutory review.

Mr. Burke wrote in a recent court filing, the “settlement is an excellent result in light of seven years of extremely hard-fought and contentious litigation against well-funded Defendants represented by the A-list of the defense bar.”  The U.S. District Court granted preliminary approval of the settlement.  A final approval hearing is set for February 11, 2015.

Table of Contents


Scott+Scott Partners Speak on the Antitrust Implications of the Financial Crisis

On December 3, 2014, Scott+Scott partners Christopher M. Burke and Walter W. Noss spoke on a panel at the American Antitrust Institute’s 8th Annual Private Enforcement Conference, addressing the antitrust implications of the financial crisis.  The panelists addressed antitrust cases that have been brought against financial institutions in various markets for financial instruments, derivatives, and commodities. 

Mr. Burke addressed issues arising in In re Foreign Exchange Benchmarks Antitrust Litigation, No. 13-cv-7789 (S.D.N.Y.).  His presentation included a description of the conduct alleged, the claims asserted, and a primer on the hotly contested issue of standing in that case.

Mr. Noss presented on his representation of the direct action plaintiffs in In re Aluminum Warehousing Antitrust Litigation, Nos. 14-cv-211, 14-cv-217, and 14-cv-6849 (S.D.N.Y.).  Mr. Noss discussed the litigation implications of a U.S. Senate subcommittee report entitled, “Wall Street Bank Involvement with Physical Commodities,” which was released on November 18, 2014, while the defendants’ motion to dismiss the case was pending.  Mr. Noss explained that the report provided additional depth on the plaintiffs’ allegations in that case and how the report may be useful to plaintiffs’ case.

Table of Contents


Record Regulatory Fines Collected in 2014

In 2014, regulatory authorities in the United States vigorously pursued individuals and entities engaged in domestic and international anticompetitive, manipulative, and fraudulent activities, resulting in a record year of fines and enforcement actions.

The Commodity Futures Trading Commission (“CFTC”) recorded a record amount of monetary sanctions against culpable financial actors during fiscal year 2014.  The CFTC protects market participants and the public from fraud, manipulation, abusive practices, and systematic risk related to derivatives.  The Dodd-Frank financial reform law recently granted the CFTC expanded responsibility and power.  In the last two years, the CFTC obtained more than $5 billion in monetary sanctions, which is greater than what the watchdog pulled in over the previous 10 years combined.  The CFTC collected $1.4 billion alone from banks that attempted to manipulate foreign exchange benchmark rates. 

The Department of Justice (“DOJ”) collected nearly $24.7 billion in criminal and civil penalties in the budget year that ended in September 2014.  This is more than three times the $8 billion that the DOJ collected for fiscal year 2013.  Attorney General Eric Holder stated, “[e]very day, the Justice Department’s federal prosecutors and trial attorneys work hard to protect our citizens, to safeguard precious taxpayer resources, and to provide a valuable return on investment to the American people … [t]heir diligent efforts are enabling us to achieve justice and recoup losses in virtually every sector of the U.S. economy.”  The DOJ reported that out of the total $24.7 billion, $13.7 was paid directly to the DOJ, while $11 billion was paid indirectly to other agencies, states, and other designated recipients. 

The Securities and Exchange Commission (“SEC”) filed a record 755 enforcement actions and obtained orders totaling $4.16 billion in disgorgements and penalties.  That compares with 686 actions and $3.4 billion in 2013.  SEC Chairman Mary Jo White said in a statement that the enforcement actions covered a wide range of misconduct, and included first-ever cases involving “pay to play” (payments made to state and local officials by advisers to gain government business) and the market access rule (procedures to limit the risk of offering market access to customers).

The Federal Trade Commission (“FTC”) initiated approximately 150 cases in 2014.  The FTC promotes competition and protects consumers by stopping unfair, deceptive, or fraudulent practices.  The FTC brought enforcement actions against well-known companies, such as Google, Facebook, Twitter, and Microsoft. 

Table of Contents


January Events


Conferences and Educational Seminars


+January 6 - 9, 2015


Metropolitan Baltimore Council AFL-CIO Unions 24th Annual Leadership Conference

Bally’s Hotel

Atlantic City, NJ


This regional conference is planned for the decision makers of the more than 200 locals affiliated with the Metropolitan Baltimore AFL-CIO.  This is an excellent opportunity to network with Baltimore’s labor community.  The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) is a voluntary federation of 57 national and international labor unions.  The AFL-CIO was created in 1955 by the merger of the AFL and the CIO.  The AFL-CIO union movement represents 12.2 million members, including 3.2 million members in working America.  Members are from various professions, i.e., teachers, miners, firefighters, farm workers, bakers, engineers, pilots, public employees, doctors, nurses, painters and plumbers and more.



+January 7 - 9, 2015


National Institute of Pension Administrators (NIPA)

The Sanctuary on Camelback Mountain

Scottsdale, Arizona


The National Institute of Pension Administrators is a national association representing the retirement and employee benefit plan administration profession.  It was founded with the idea of bringing together professional benefit administrators and other interested parties to encourage greater dialogue, cooperation and educational opportunities.  This year’s Business Management Conference will feature a unique peer-to-peer knowledge exchange examining the latest industry developments.  2015’s annual forum and expo will be held May 3-6 at the Cosmopolitan of Las Vegas.   


+January 12 -14, 2015


Public Funds Conference produced by Opal Financial Group

The Fairmont Scottsdale Princess

Scottsdale, Arizona

Opal Financial Group’s annual Public Funds Conference addresses issues that are relevant to public pension plans.  More than 100 U.S. public and foreign government and municipal funds generally attend the three-day conference.  The conference offers presentations, panels and networking with industry peers where discussions will focus on the state of the U.S. Retirement System, New Styles and Strategies for Investing, Challenges Facing Public Pension Plans, and Addressing Pension Deficits and Liabilities. This year’s conference will open with a two-hour debate on Pension Reform.  There will be several Plan Fiduciary sessions designed particularly for Pension and Taft Hartley Representatives, Trustees, Administrators, Commissioners and Staff members.  The conference serves as a comprehensive resource for ongoing education for plan fiduciaries and plan participants.

+January 18 - 20, 2015


12th Annual Made In America (MIA): Taft-Hartley Benefits Summit presented by Financial Research Associates (FRA LLC)

Caesar’s Palace

Las Vegas, NV

The 2015 Made in America Summit will be divided into multiple tracks: track “A” providing upfront education on pension investment issues and track “B” health & welfare topics thus offering two conferences in one.  Several sessions will feature domestic equity issues and explore asset recovery.  The “get ready-to-use information on how to advance funding status” will be presented using numerous case studies.  Thousands have attended Made in America and more than 60% of the attendees are Trustees/Administrators.  As always, special recognition will be given to the Advisory board and executive committee members who represent more than 10 union factions including the Teamsters, UFCW, IBEW, NECA, OLFBP, NCCMP, Plumbers’ Welfare Funds, and National Elevator Health & Pension Funds.


+January 22 - 23, 2015


The Los Angeles Benefits Conference (ASPPA)

Hilton Los Angeles Universal City

Universal City, CA


The American Society of Pension Professionals and Actuaries provides an opportunity for attendees to gain knowledge about current regulatory, legislative, administrative and legal topics.  This conference focuses on addressing the educational needs of pension and employee benefits professionals particularly in the western part of the United States.  Emphasis will be placed on recent legislative developments in at least 18 states where employees of private employers have been offered state run retirement plans. There will be a follow up on ERISA litigation where Supreme Court rulings conflict with plan documents and the types of remedies that may be available in breach of fiduciary duty cases as well as plan fee cases. Self-correcting procedures as well as additional processes of correcting errors discovered by audits or other methods will be addressed.  Third-party administrators and related service providers should find this conference very informative.


            +January 24-27, 2015


National Conference on Public Employees Retirement System (NCPERS) Legislative Conference

            Capital Hilton Hotel

            Washington, DC


The NCPERS Legislative Conference takes place annually in Washington, DC and allows public fund trustees an opportunity to visit Capitol Hill and meet with their legislators.  Conference topics will highlight federal regulatory issues affecting public funds.  NCPERS will begin its program on January 24th with a Healthcare Symposium focusing on the Affordable Care Act (ACA).  New policies and procedures required to implement healthcare reform regulations will be addressed.  The outlook on the midterm Congressional elections will be featured as well as the Sustainability Accounting Standards Board and how it affects public pension systems. The SAFE (Secure Annuities for Employee) legislation will be addressed as the biggest federal threat to public pensions.


+January 25 - 27, 2015


The 27th Annual Police, Fire, EMS, & Municipal Employee Pension & Benefits Seminar (NAPO) presented by Opal Financial Group

            Caesars Palace

Las Vegas, NV


NAPO, National Association of Police Organizations, has evolved into an organization that represents uniformed and non-uniformed public safety workers and their pension plans.  Founded in 1978, NAPO is a coalition of police unions and associations from across the United States that serves to advance the interests of America’s law enforcement officers through legislative and legal advocacy, political action, and education.  Founded in 1978, NAPO remains the strongest unified voice supporting law enforcement officers in the U.S. and represents more than 2,000 units and associations, 241,000 sworn officers, 11,000 retired officers, and more than 100,000 citizens who share a common dedication to fair and effective crime control and law enforcement.  This year NAPO has collaborated with Opal Financial Group to produce a “cutting edge” program spotlighting healthcare issues facing NAPO members.



Government Finance Officers’ Association Conferences


+January 21-23, 2015

Wyoming Association of Municipal Clerks and Treasurers,

Little America Conference

Cheyenne, WY




+January 30, 2015

Maryland Government Finance Officers’ Association (MDGFOA)

BWI Marriott

Linthicum, MD


Table of Contents

Scott + Scott LLP is a nationally recognized law firm headquartered inConnecticut with offices in New York City, Ohio and California. The firm represents individual as well as institutional investors who have suffered from corporate stock fraud. Scott+Scott has participated in recovering billions of dollars and achieved precedent-setting reforms in corporate governance on behalf of its clients. In addition to being involved in complex shareholder securities and corporate governance actions, Scott+Scott also has a significant national practice in antitrust, ERISA, consumer, civil rights and human rights litigation. Through its efforts, Scott+Scott promotes corporate social responsibility.

Scott+Scott’s PT+SM System is the firm’s proprietary investment portfolio tracking service. Carefully combining the firm’s proprietary computer-based portfolio monitoring software with Scott+Scott’s hands-on approach to client  relations is a proven method for institutional investors and their trustees to successfully

  • Monitor their investment portfolios  
  • Identify losses arising from corporate fraud    
  • Consider what level of participation any given situation requires   
  • Recover funds obtained on their behalf through investor litigation action  

To obtain more information about Scott+Scott’s PT+SM services or to schedulea presentation to fund trustees, fund advisors or asset managers, please contact:    David R. Scott + Toll Free: 800.404.7770     email: drscott@scott-scott.com + UK Tel: 0808.234.1396