Streetwise Professor

February 22, 2010

Cert Denied

Filed under: Commodities,Derivatives,Economics,Exchanges — The Professor @ 10:32 pm

In a matter of personal interest:

The U.S. Supreme Court rejected an appeal by Pacific Investment Management Co., clearing the way for a lawsuit seeking more than $600 million for the company’s alleged manipulation of the price of Treasury futures contracts on the Chicago Board of Trade.

The justices today let stand a federal appeals court ruling that said traders could press their suit against the company as a class action. Pimco, manager of the world’s largest bond fund, argued unsuccessfully that many of the investors in the class actually would have made money had the market manipulation taken place as alleged.

The lawsuit, filed in 2005, accuses Pimco of cornering the market for contracts on 10-year Treasury notes during May and June 2005. Pimco allegedly used its holdings to drive up the price for traders who had sold short — that is, contracted to sell notes on a specified later date — and needed to cover their positions.

And that’s all I have to say about that.  Here, anyways.

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