Wall Street Banks to Settle CDS Lawsuit for $1.87 Billion

Some of Wall Street’s biggest financial institutions — includingGoldman Sachs Group Inc.,JPMorgan Chase & Co., Citigroup Inc. and HSBC Holdings Plc — have agreed to a $1.87 billion settlement to resolve allegations they conspired to limit competition in the lucrative credit-default swaps market.

The banks reached an agreement in principle with a group of investors that includes the Los Angeles County Employees Retirement Association, Daniel Brockett, a lawyer for the group, told a judge in Manhattan federal court on Friday. The sides need seven to 10 more days to iron out some details, Brockett said.

A settlement would avert a trial following years of litigation by hedge funds, pension funds, university endowments, small banks and other investors, who sued as a group. They alleged that a dozen global banks — along with Markit Group Ltd., a market-information provider in which the banks owned stakes — conspired to control the information about the multitrillion-dollar credit-default swap market in violation of U.S. antitrust laws.

Billions in Profits

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