The article discusses the Justice Department’s recent complaint against Morgan Stanley. The complaint alleged that Morgan Stanley entered into derivatives that caused the price of electrical generating capacity in the New York City area to rise. The article describes the potential economic effects of derivatives, the differing assessments of the Justice Department and the Federal Energy Regulatory Commission of the effects of derivatives in this case, and the antitrust risks faced by firms that arrange derivatives.
The article, which was written with Elai Katz and Vibhuti Jain of Cahill Gordon & Reindel, appeared in the Spring 2012 issue of The Exchange, a publication of the ABA Antitrust Section, Insurance and Financial Services Committee. The article may be found here.