3 pension funds sue 6 big banks over stock-lending business

Markets Associated Press

Three public pension funds are suing six Wall Street banks, saying the banks overcharged investors in what's known as the stock loan market.

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The suit is being brought by the Iowa Public Employees' Retirement System, the Orange County Employees Retirement System and the Sonoma County Employees' Retirement Association. Those being sued are Goldman Sachs, JPMorgan Chase, UBS, Credit Suisse, Morgan Stanley and Bank of America.

The lawsuit claims the six banks overcharged investors to borrow shares in companies, particularly for investment strategies like selling a stock short. It claims the banks colluded to keep competition out of the stock loan market to keep prices high.

Bank of America, JPMorgan, UBS, Credit Suisse and Morgan Stanley declined to comment. Goldman Sachs said it didn't have an immediate comment.