ANTITRUST DAMAGES IN FINANCIAL MARKETS

Abstract

I briefly review the standard regression methods used to estimate damages in antitrust actions, and I discuss how these would be applied to cases in financial markets. I consider applications to three different financial market cases. The first is the NASDAQ odd-eighths litigation, where existing antitrust methods closely resemble the analyses published in the academic literature on this issue. The second type of case is bond market antitrust litigation, where the expert faces an additional hurdle because they have to estimate bid-ask spreads. The third type of case is related to the LIBOR manipulation scandal. I discuss why existing methods provide a poor fit for the LIBOR damage calculations. Lastly, I discuss IPO issuance fees as an example of price clustering in financial markets which has not let to antitrust litigation.