Wall Street giants like Citi, JPMorgan, Bank of America, Barclays, Goldman Sachs and others allegedly gathered to inflate prices that would put the trading of Credit Default Swaps (CDS) into an exchange to make transparent pricing.
These "swaps" are considered insurance that investors buy against non-payment on debts of private companies and governments.
While violating US antitrust law, banks reportedly monopolized trading in CDS and conspired to fix prices.
"There was no central place to go for a stream of prices. You had to go to the banks and they controlled the business and they charged high prices," said Brockett. An investor "basically had to pay what they wanted."
Bank representatives deny any wrongdoing and have not been reached by phone for comment.
The International Swaps and Derivatives Association, one more plaintiff in the lawsuit against banks, stated that it is "committed to further developing CDS market structure to ensure the market functions safely and efficiently, " while expressing satisfaction with the settlement.
The suit also mentions swap that the banks handled since the 2008 financial meltdown, leading to the largest global economic crisis in modern history.