Some of the alleged behavior occurred prior to Dodd Frank act of 2010, which regulated the CDS market for the first time, including measures to make the market more transparent and less risky.

The CDS were traded in way that “kept the relevant price information in the hands of the dealer defendants, who ensured they were on one side of, and thus profited from, virtually every CDS transaction,” according to the complaint. As a result, the Wall Street firms and the trade association “successfully maintained an inefficient and opaque market structure that yielded for them exorbitant profits at the direct expense” of the investors suing the banks.

Exclusive Access

The banks had exclusive access to price data, the investors said, forcing them to rely on limited information. The plaintiffs complained that in a typical deal they had no idea how much a broker was profiting from the transaction.

The banks were also accused in the lawsuit of conspiring to sabotage a credit default swap exchange planned by hedge fund Citadel Group LLC and the CME Group Inc., a derivatives market operator. They agreed to boycott the new exchange as long as Citadel was involved, according to the lawsuit, as they considered the hedge fund a “threat.” As a result, potential buyers and sellers had no efficient way to find other potential participants for swaps, unless they were dealers.

Citadel isn’t a plaintiff in the case.

Other banks named as defendants in the case are Bank of America Corp., Barclays Plc, Deutsche Bank AG, BNP Paribas SA, Royal Bank of Scotland Group Plc, Credit Suisse Group AG, Morgan Stanley and UBS AG.

Bank of America, Morgan Stanley, Credit Suisse, Deutsche Bank and Barclays declined to comment on the deal. RBS had no immediate comment. UBS and BNP Paribas didn’t immediately reply to requests for comment.

International Swaps and Derivatives Association, a trade group representing participants in the over-the-counter derivatives market, was also sued. ISDA didn’t immediately respond to requests for comment.

The U.S. Department of Justice’s antitrust division probed the conduct. The agency effectively dropped its investigation in October 2013.