Nuveen Improperly Tried to Destroy Rival, Judge Concludes
- Nuveen organized boycott of smaller rival Preston Hollow
- Judge refused to sanction Nuveen after target actions halted
U.S. bond-market powerhouse Nuveen LLC wrongfully interfered with the business of Preston Hollow Capital LLC by organizing an intimidation campaign to coerce broker-dealers from doing business with its smaller rival, a judge ruled.
Delaware Chancery Court Judge Sam Glasscock III found that Nuveen misused its market power as one of the biggest buyers of state and local government bonds to freeze out the smaller firm from doing business with Wall Street banks and brokers.
“Nuveen was not simply attempting to achieve a competitive edge,” Glasscock said Thursday in a 59-page ruling. “It meant to use the leverage resulting from its size in the market to destroy Preston Hollow.”
Still, Glasscock declined to issue an injunction barring Nuveen from further wrongdoing because the company has agreed to stop the boycott and not disparage its rival.