Supreme Court won't hear Pimco market squeeze case

Legal News Center

The U.S. Supreme Court on Monday denied an appeal by Pacific Investment Management Co challenging class-action certification for a lawsuit alleging the world's largest bond fund manager tried to corner a market for U.S. Treasury note futures.

A U.S. appeals court in Chicago upheld a judge's ruling that certified as a class more than 1,000 investors who seek more than $600 million in damages.

Pimco, a Newport Beach, California-based unit of the German insurer Allianz SE appealed to the Supreme Court, but the justices turned down the appeal in a brief order without any comment.

The lawsuit accused Pimco of boosting its percentage stake in futures contracts on some 10-year Treasury notes to 42 percent from 12 percent over a two-week span in the spring of 2005. The relevant contracts traded on the Chicago Board of Trade.

In its appeal to the Supreme Court, Pimco argued that class-action status should not have been granted because some plaintiffs did not lose money and the class suffered from serious conflicts of interest that precluded certification.

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