WMD Defeats Motion to Dismiss Antitrust and Consumer-Protection Claims on Behalf of CUSIP Users

July 18, 2023

The Firm obtained a key victory in the Southern District of New York on behalf of a putative class of CUSIP users under Section 2 of the Sherman Act and state laws banning deceptive trade practices.

On March 7, 2022, the Firm filed a class-action antitrust suit in the United States District Court for the Southern District of New York, on behalf of Hildene Capital Management, LLC (“Hildene) against the American Bankers Association (“ABA”), FactSet Research Systems Inc. (“FactSet”), and S&P Global, Inc. (“S&P”). The class-action complaint alleged that defendants engaged in anticompetitive conduct in the market for financial instruments identifiers—namely the so-called CUSIP numbers.

The case was later consolidated with a similar class action brought by Dinosaur Financial Group LLP and Swiss Life Investment Management Holding AG, and the Firm was designated interim co-counsel for the class on August 10, 2022. The plaintiffs jointly filed a Second Amended Class Action Complaint (“SAC”) on December 21, 2022, and the defendants moved to dismiss the SAC in its entirety on February 14, 2023.

In an Opinion and Order dated July 16, 2023, the Court denied in part the motion to dismiss, ruling that the SAC sufficiently pleaded violations of Section 2 of the Sherman Act, Section 349 of New York’s General Business Law, and Connecticut’s Unfair Trade Practices Act. As alleged in the SAC, defendants have required users of CUSIP numbers to sign onerous licensing agreements directly with S&P (now FactSet), even though the users received CUSIP numbers as part of data feeds from third-party vendors, and S&P has entered into restrictive agreements with third-party vendors prohibiting distribution of CUSIP numbers to unlicensed users. The Court held that cognizable antitrust concerns arise from this alleged conduct because defendants, through these restrictive agreements, have created a system designed to prevent any competitive uses of CUSIP numbers. The Court also held that defendants’ alleged deceptive statements about their intellectual property rights in the CUSIP numbers themselves, as distinct from defendants’ copyrighted compilation of CUSIP numbers, ran afoul of the state consumer protection laws noted above. The case will now proceed to the discovery phase.

The action is pending in the United States District Court for the Southern District of New York. The consolidated case is captioned Dinosaur Financial Group LLC et al. v. S&P Global, Inc. et al., No. 22-cv-1860(KPF) (S.D.N.Y.). The Court’s Opinion and Order is available here.