NEW YORK (
Pacific Investment Management Company
is paying $92 million to settle a class-action lawsuit that accuses it of manipulating the price of 10-year Treasuries back in 2005.
The lawsuit was filed by two investors that had taken short positions in the futures contracts. Breakwater Trading and the other plantiffs had bet that the market value of the notes would decline. However, they wound up paying prices that were "articially high," according to the plantiffs because Pimco scooped up large amounts of the T-notes, according to a report by the
"PIMCO's position is that all such trades were properly designed to secure best execution for its clients; that by lending cheapest-to-deliver notes back into the market it eliminated any concerns,"
--Written by Maria Woehr in New York.
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