GSE Bond Settlement Pool Increases to $386.5 Million

Did we say $29.5 Million?

In a recent post, we discussed the first two settlements in the GSE Bonds Antitrust litigation which then totaled $49.5 million. (Well, $29.5 Million was the initial settlement amount, as Goldman’s settlement occurred after the first notice was issued. We are nothing if not precise here at CCC.) Earlier this week the remaining 12 defendant banks added $337 making the grand total $386.5 million.

A press release about the case issued by the Pennsylvania state treasurer’s office touted the potentially high recovery percentage: “Assuming class-wide damages of $857 million, the total recovery of $386.5 million represents approximately 58.4% of the 16 defendants’ proportionate share of single damages.”

In addition, defendants also agreed to “rigorous” employee training, to establish a “culture of compliance,” to “dedicate resources for oversight,” and to “not fix prices for bonds (or other things) any more.” (The last one I made up, but it's implied for sure.)

As we noted in our last post, eligible GSE Bonds are debt securities issued between 2009 and 2019 by four government sponsored enterprises: Federal National Mortgage Association, Federal Home Loan Mortgage, Federal Farm Credit Banks, and Federal Home Loan Banks. Anyone with any knowledge of the bond market knows that this would entail a vast number of securities.

At first, the claims administrator claimed they could not provide CUSIPs, but after many queries by claimants for a definitive CUSIP list (including by the team at CCC), the administrator finally relented and posted a list of over 84,000 identifiers. Of those, over were 64,000 unique, with some also appearing in ISIN format.

“Oh, phew. Only 64,000. What a relief… So how am I supposed to search for all of that in my data?”

You won’t have to if you hire CCC. With a potential recovery of nearly 60% (minus attorneys fees and administrative costs, of course) this is a settlement that will be worth the effort. CCC can help ensure that every one of those eligible securities are run against your data.

It’s also worth noting this caveat from the administrator about the list they issued: “This CUSIP list may not be complete and all-inclusive.” In other words, the bond market is so big that some securities eligibilty will have to be confirmed on a case by case basis. With CCC on your side, we can help determine if bonds that do not appear on this list qualify.

Whether it 64,000. 84,000, or some other number of eligible identifiers, CCC can find all of them, and ensure that you and your clients file for every eligible claim.

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