Thursday, November 7, 2013

Credit Suisse Sec. (USA) LLC v. Billing case brief

Credit Suisse Sec. (USA) LLC v. Billing case brief summary
551 U.S. 264 (2007)

Respondent investors filed antitrust class-action lawsuits against petitioner underwriters under the Sherman Act, the Clayton Act, as amended by the Robinson-Patman Act, and state antitrust laws. The district court dismissed the complaints based on incompatibility with securities laws. The United States Court of Appeals for the Second Circuit reversed and reinstated the complaints. The underwriters' petition for certiorari was granted.

The investors alleged that the underwriters, during initial public offerings, unlawfully agreed with one another that they would not sell shares of a popular new issue to an investor unless that investor committed (1) to buy additional shares of that security later at escalating prices ("laddering"), (2) to pay unusually high commissions on subsequent security purchases from the underwriters, or (3) to purchase from the underwriters other less desirable securities ("tying").

  • The Court determined that the securities laws implicitly precluded the application of the antitrust laws to the conduct alleged because the securities laws were "clearly incompatible" with the application of the antitrust laws in this context since 
  • (1) the conduct was squarely within the heartland of securities regulations, 
  • (2) the Securities and Exchange Commission (SEC) had a clear and adequate authority to regulate the conduct, 
  • (3) the SEC actively enforced the rules and regulations regarding the conduct, and 
  • (4) there was a serious conflict between the antitrust and regulatory regimes. 
  • An antitrust action in this context would be accompanied by a substantial risk of injury to the securities markets.


The Court reversed the appellate court's judgment.

Suggested Study Aids For Securities Regulation Law
Securities Regulation in a Nutshell, 10th (Nutshell Series)
Securities Regulation: Examples & Explanations, 5th Edition
Securities Regulations: The Essentials

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