Nuveen, a major player in the municipal-bond market, is facing an antitrust suit filed Monday by smaller competitor Preston Hollow Capital, months after the conclusion of a similar case in a Delaware court.
Nuveen and John Miller, the firm’s head of municipal finance, attempted to “organize a boycott” of Dallas-based Preston Hollow through “threatening and anticompetitive” correspondence with banks and broker-dealers, according to the lawsuit filed in New York federal court.
Preston Hollow, which has $3.6 billion in investable assets, posed a “direct threat” to Nuveen — a behemoth with $1.1 trillion in assets under management — and its “ability to buy sufficient high yield municipal bonds,” the lawsuit states. To push the firm out, Nuveen pressured major investment banks, including Goldman Sachs, JPMorgan and Wells Fargo, to stop working with Preston Hollow or lose business with Nuveen, the suit alleges.
The firm is now suing for damages of not less than $100 million.
A spokesperson for Nuveen declined to comment on the matter.
Preston Hollow made similar claims in another suit in the Delaware Chancery court, in which a vice chancellor in April ruled that Nuveen “used threats and lies” to successfully damage the firm. The court, however, refused to issue an injunction against Nuveen, and said Preston Hollow should have instead sought money damages.
The firm also has a pending defamation lawsuit in Delaware Superior Court, where it is seeking $100 million in damages.
Preston Hollow in April said it would “vigorously pursue” monetary damages in the defamation claim and at the time hinted it was looking into lodging the antitrust lawsuit.
“Municipal borrowers deserve a truly competitive marketplace where they are able to select the capital provider that meets their needs in funding their vital projects, not the needs of a large money manager like Nuveen,” Preston Hollow CEO Jim Thompson said. “This is, in essence, the very injustice that the vice chancellor exposed.”
By Rachel Uda
July 21, 2020.