The opinion of the court was delivered by: ALESIA
This matter is before the court on Defendants' motion to transfer this matter to the United States District Court for the Southern District of New York, pursuant to 28 U.S.C. § 1404(a).
This matter is transferred to the U.S. District Court for the Southern District of New York.
Plaintiffs (collectively referred to as "Vanguard") are seven investment companies. Defendants are seven corporations engaged, generally speaking, in the bond business. One of the defendants -- Thomson Publishing Corporation ("Thomson") -- is a publishing company which publishes The Bond Buyer ; the other six defendants (collectively referred to as "brokers") are dealer-to-dealer municipal bond brokers.
The Chicago Board of Trade ("CBOT") trades municipal bond index futures contracts. The price at which the municipal bond index futures contracts settle is established by referring to the Bond Buyer Municipal Bond Index ("BBI"), which is constructed by The Bond Buyer in accordance with criteria established by CBOT regulations. The BBI is comprised of 40 term municipal bonds.
The defendant brokers broker the type of bonds which comprise the BBI. They evaluate the price of each bond twice a day so that The Bond Buyer may compute the BBI. If the BBI fails to reflect the prevailing market conditions and is not accurate, participants trading municipal bond index futures contracts are exposed to windfall losses or gains.
Vanguard purchased certain December 1995 Municipal Bond Index Futures Contracts ("December contracts"); Vanguard purchased a total of 3,420 December contracts. On December 19, 1995, -- the day the December contracts expired -- at approximately 2:15 p.m. eastern time, the Federal Reserve Board moved to lower short term interest rates and conducted open market operations to drive the Federal Funds Rate down by 25 basis points. Consequently, the price of the Treasury Bond and Municipal Bond Index futures, other than the December contracts, rose between 1 and 1.5 points.
The afternoon pricing of the BBI did not reflect the Federal Reserve Board's actions or the changes in price of other index futures and actively traded fixed income securities. The BBI did not catch up with the bond market until the following day. As a result, when the December contracts expired, the settlement price on the 3,420 December contracts held by Vanguard was allegedly inaccurate. If the settlement price was accurate, Vanguard alleges that it would have received approximately $ 3,250,000 more than it actually received on the settlement date.
Vanguard brings a six-count complaint against Thomson and the brokers: count I -breach of contract against Thomson; count II - breach of contract against the brokers; count III - negligent misrepresentation against Thomson; count IV - negligent misrepresentation against the brokers; count V - a violation of the Illinois Consumer Fraud and Deceptive Business Practices Act against Thomson; and count VI - a violation of the Illinois Consumer Fraud and Deceptive Business Practices Act against the brokers.
Thomson and the brokers seek to transfer this matter to New York.
Pursuant to 28 U.S.C. § ...