Credit Suisse, Regulatory Immunity, and the Shrinking Scope of Antitrust

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Keith Sharfman, Jun 29, 2007

Last week, in Credit Suisse Securities v. Billing, the U.S. Supreme Court dismissed a variety of antitrust claims brought by investors against underwriters from whom they had purchased securities, on the theory that securities underwriting is implicitly immune from antitrust scrutiny because it is an activity regulated by the securities laws. The underwriting firms had been accused, among other things, of “tying” the sale of some securities to the purchase of others, a practice of which both the SEC and antitrust (at least in some circumstances) disapprove.

Speaking for six members of the Court (Alito, Breyer, Ginsburg, Roberts, Scalia, and Souter), Justice Breyer’s majority opinion did not address the merits of the plaintiffs antitrust claims. Rather, it assessed whether the underwriting transactions in question qualified for implicit antitrust immunity under a “clear incompatibility” standard that applies when Congress (as here in the case of the securities laws) has been silent about whether conduct regulated by another body of federal law should receive antitrust immunity. The majority concluded that, in light of the Securities and Exchange Commission’s (SEC) extensive regulation of underwriters and the substantial risk that dual regulation could produce conflicting guidance to underwriters, antitrust immunity applied.

In a concurring op


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