Muni-bond titan Nuveen LLC’s John Miller testified that he was only “blustering” when he told bankers he’d persuaded Goldman Sachs Group Inc., JPMorgan Chase & Co. and other bond-market players to stop doing business with rival Preston Hollow Capital LLC.
Miller, the co-head of Nuveen’s fixed-income unit, took the witness stand Monday in the trial of a lawsuit by Preston Hollow claiming he sought to freeze the Dallas-based lender out of the high-yield municipal-bond market. He said he was just overblowing it when he assured Deutsche Bank AG officials last year that he’d gotten Wall Street to swear off Preston Hollow deals or risk losing Nuveen’s business.
“Sometimes you have to exaggerate to get people’s attention, especially on Wall Street trading desks,” Miller said in Delaware Chancery Court.
In the end, Nuveen never got any agreements from Wall Street banks to stop doing business with Preston Hollow, he said.
Preston Hollow is trying to persuade Judge Sam Glasscock III that Nuveen used its market power as one of the biggest buyers of U.S. state and local government bonds to blackball the lender, whose role in financing risky projects posed a competitive problem. Preston Hollow accuses Miller and other Nuveen executives of threatening to pull tens of millions of dollars in business from banks that underwrote offerings with it and financed the loans.
Nuveen violated New York antitrust law by pressuring big banks, including Wells Fargo & Co. and Citigroup Inc., to shun the firm, according to the lawsuit, which seeks unspecified damages.
Preston Hollow has made $2 billion in loans to finance hospitals, real estate developments and student housing. Nuveen, which had almost $1 trillion in assets under management as of March 31, is the investment manager of TIAA, best known for offering financial products to teachers.
In court on Monday, Preston Hollow’s lawyers played a tape of a December call between Miller and executives of Deutsche Bank.
“You have to make a choice who you want to do business with,” Miller said on the tape. “I don’t want to do business with anyone doing business with Preston Hollow.”
On the call, Miller told the Deutsche Bank officials that Preston Hollow engaged in “dirty deals” that fleeced investors through “predatory lending.”