In a significant legal victory, Kehoe Law Firm successfully represented the Southeastern Pennsylvania Transportation Authority (“SEPTA”) in a Second Circuit appeal that reinstated U.S. investor claims against major banks accused of colluding to rig Mexican government bond prices. The appellate decision, issued on Friday, February 9, 2024, overturns a previous dismissal by U.S. District Judge J. Paul Oetken and reestablishes the jurisdiction of the New York district court in the matter.

The case, filed in 2018 by U.S. pension funds against Mexico-based units of global banking giants, including Bank of America, Citibank, Deutsche Bank, and HSBC, alleged a yearslong collusion to manipulate the Mexican government bond market. The district court had initially dismissed the case, citing a lack of jurisdiction based on the belief that the alleged collusion occurred solely in Mexico. However, the Second Circuit panel, in an opinion written by U.S. District Judge Arun Subramanian, disagreed with the lower court’s decision. The panel found that the plaintiffs plausibly alleged that affiliated brokers in New York were “mere pass-throughs” for the banks, establishing the necessary “in-forum contacts” for jurisdiction.

The opinion emphasized that using New York as the sales hub for billions of dollars worth of bonds subjected the banks to specific jurisdiction for claims related to the alleged collusion.

Cautioning against broad generalizations, the panel noted that each case must be considered individually. Despite this, it affirmed that the pension funds’ case did not involve difficult line-drawing questions, as the complaint alleged that the defendants were in control of every step of every deal during the alleged class period.  Among the defendants are major banking families, including Santander, BBVA, Citigroup, JPMorgan Chase, Barclays, and others.

A copy of the opinion can be found here:

For more information about Kehoe Law Firm and this matter, please contact John A. Kehoe at [email protected] or call (215) 792-6676.