Iowa Pub. Employees' Ret. Sys. v. Merrill Lunch, Pierce, Fenner & Smith Inc.

Court Resets Class Period to Reflect the Amended Complaint as the Operative Complaint

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OPINION AND ORDER ADOPTING REPORT AND RECOMMENDATION On June 30, 2022, Magistrate Judge Sarah L. Cave issued a 71-page Report and Recommendation (the “Report”), in which she recommended that the motion for class certification (the “Motion”) brought by Plaintiffs in this antitrust class action be granted in part and denied in part. Plaintiffs filed a modest objection to one portion of the Report, while the remaining defendants in the case (collectively, “Defendants”) pursued broader challenges to her decision. For the reasons that follow, the Court adopts the Report nearly in its entirety, with a limited exception concerning the end date of the relevant class period (the “Class Period”). BACKGROUND1 A. Factual Background Both this Court and Judge Cave have previously recounted the facts underlying this action, in which Plaintiffs allege that a handful of banks conspired to prevent the U.S. stock loan market from transitioning to a transparent, direct electronic exchange. See Iowa Pub. Employees’ Ret. Sys. v. Merrill Lynch, Pierce, Fenner & Smith Inc., 340 F. Supp. 3d 285, 297-310 (S.D.N.Y. 2018) (“IPERS I”) (denying Defendants’ motion to dismiss); Iowa Pub. Employees’ Ret. Sys. v. Bank of Am. Corp., No. 17 Civ. 6221 (SLC), 2022 WL 2829880, at *1-13 (S.D.N.Y. June 30, 2022) (Report). The Court assumes familiarity with these prior opinions, and adopts and employs the defined terms from IPERS I. The Court provides here only a brief discussion of those facts that are relevant to resolving the instant objections to the Report. 1. The U.S. Stock Loan Market A stock loan transaction occurs when stock is temporarily transferred from one investor to another. (AC 2). The owner of the shares, referred to as a “stock lender” or “beneficial owner,” lends its stock to the borrower. (Id.

2, 97).2 Beneficial owners are typically entities such as pension funds, mutual funds, or insurance companies that own U.S. equities. (Zhu Report 23). Borrowers typically include entities like hedge funds. (See AC

Iowa Pub. Employees' Ret. Sys. v. Merrill Lunch, Pierce, Fenner & Smith Inc.

Court Resets Class Period to Reflect the Amended Complaint as the Operative Complaint

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