We were reminded recently that two of the most widespread and lucrative antitrust investigations in the history of the Department of Justice Antitrust Division (the “Division”) remain very active and are likely to remain as such well into the future.
The nationwide investigation of the municipal investment auction industry claimed another former banking executive last week. Philip D. Murphy managed a major U.S. bank’s derivatives desk more than 10 years ago but pleaded guilty in a federal court in North Carolina for his role in a fraud conspiracy designed to artificially inflate the price that cities, towns and other local bond issuers paid to invest their money, and for falsifying reports to his own bank’s management – activity that no doubt concealed the auction bid-rigging scheme from the bank’s most senior executives. In the North Carolina-based investigation, 17 individuals and a company have pleaded guilty. Similar investigations in numerous other parts of the country have also yielded dozens of criminal convictions.
Late last week, the Division announced the latest guilty plea in the massive auto parts price-fixing investigation. Based on the number of corporate pleas and the fines collected, this investigation is the largest in the Division’s history. The Japan-based company will pay nearly $7 million for its role in fixing the price of electronic throttle bodies sold to Nissan Motor Corporation. The conspiracy reportedly lasted several years, consistent with charges in other parts of the investigation. In an investigation that has already collected more than $1.8 billion in fines, 25 corporations and 28 individuals have pleaded or will plead guilty.
These investigations certainly rival the instances when the Division successfully prosecuted the vitamin manufacturing cartel in the mid-late 1990s and DRAM (computer memory) industry a decade ago. The auto parts investigation implicates one of the world’s largest manufacturing industries, and the municipal bond bid-rigging cases involve auctions that occurred on a relatively local level – and have correspondingly generated multiple investigations. These cases are a sign of more enforcement to come.