CUSIP Global Services (CGS). the U.S. national numbering agency for assigning securities identification codes to U.S. securities, and its parent FactSet Research have just been hit by a second lawsuit alleging illegal monopolistic practices.
The plaintiffs in both cases contend that CGS violated the U.S. Sherman Antitrust Act of 1890 which outlaws any monopolization, attempted monopolization or combination to monopolize any service provided. The latest one filed by the Global Infrastructure Finance and Development Authority (GIFDA) on February 26 in the Middle District of Pennsylvania is about CGS’ abusing its industry role to activate CUSIPs necessary to sell munibonds. What makes the case so interesting is that it likely marks the first time an issuer has filed a lawsuit against CGS for failing to allow an issuer to use its CUSIPs. FinOps Report could find no other instances.
In its lawsuit, the GIFDA, a York, Pennsylvania based non-profit authorized by the legislatures of Alabama, Georgia, and Pennsylvania to finance critical infrastructure projects alleged that CGS prevented it from entering the capital market for the past four years through “exclusionary means.” Practically speaking its CUSIPs were not activated so they could not be used. CGS also allegedly interfered with business relationships with service providers such as underwriter First Boston Global Custody and Trust Company, trustee Argent Institutional Trust, transfer agent Securities Transfer Corp. and auditor KPMG. Therefore, the GIFDA had no alternative but to take legal action. CGS is expected to ask for a dismissal of the case on April 7.
The GIFDA wants CGS to activate all of its necessary CUSIPs and pay damages for the financial and reputational harm it caused because the non-profit could not proceed with several critical infrastructure projects. “Institutional investors who had expressed an interest in the GIFDA’s bond program or declined to proceed as a result of CGS’ obstruction,” wrote the non-profit in its lawsuit. Custodians, it said, required the CUSIPs to safekeep the bonds and process any transactions through Depository Trust Company, the U.S.’ national securities depository.
As reported by FinOps Report, the previous lawsuit filed against CGS in March 2022 in the Southern District of New York by Dinosaur Financial Group, Hildene Capital and Swiss Life Management, as lead plaintiffs in a class-action, is focused on CGS’ charging excessive licensing fees for financial firms to use CUSIPs. It also lists the American Bankers Association (ABA) and Standard & Poor’s Global as CGS’ former parent, as defendants. The plaintiffs have estimated that CGS owes members of the affected class over USD1 billion in compensation for excess licensing fees paid from 2018 along with other damages. As FinOps Report went to print, the case remains pending.
The outcomes of the two litigations will impact procurement, data management, trading and post-trade oerations directors at fund management firms, banks, and broker-dealers which use CUSIPs for their day-to-day operations in trading as well as clearing and settling transactions U.S. securities. CUSIPs are also required to comply with numerous regulatory reporting mandates and to issue securities. A win for GIFDA could shed light on how CGS determines when it has the right to deny an issuer CUSIPs, while a win for the class-action plaintiffs could in the short-term lead to compensation for them and others in the affected firms. In the long term, CGS might be forced to lower licensing fees for financial firms users to use CUSIPs and reduce CGS’ restrictions on redistribution of the identifiers. The largest financial firms can easily pay CGS over USD$500,000 a year to access and distribute CUSIPs to multiple business units.
Bloomberg also has a stake in how the plaintiffs fare. Successful antitrust claims could ultimately give its twelve-digit alphanumeric Financial Instrument Global Identifiers (FIGIs)– an equal footing to CUSIPs. Despite Bloomberg’s aggressive marketing and lobbying efforts, FIGIs still play second fiddle to CUSIPs which are the industry norm. Bloomberg began issuing FIGIs in 2009 under the name of Bloomberg Global Identifiers and changed it to Financial Instrument Global Identifiers in 2014 when the Object Management Group, a trade group for software development standards, endorsed FIGIs. The idea was to create the market perception of FIGIs as “independent” from Bloomberg, but with Bloomberg as their registration agent their affiliation is undeniable. Last year, OMG was acquired by the EDM Association, a trade group of data management professionals.
CGS was created by the ABA in 1968 and operated by Standard & Poor’s Global on behalf of the banking association until early 2022 when CGS was purchased by FactSet for.about USD1.9 billion. The U.S Accredited Standards Committee X9, etablished by the ABA in 1974, first endorsed CUSIPs as the U.S standard for securities identification two years later and again in 2020. As reported by FinOps Report, the Committee gave FIGIs its blessing in 2021. The ABA retains 30 percent of CGS’ annual revenues and the remainder goes to the CGS’ parent firm, first S&P and now FactSet. CGS makes its money in two ways — by charging issuers to recerve CUSIPs and by charging end users to access, distribute, and store them. No one knows exactly how much the ABA is reaping or how much of a profit CGS is making because neither organization discloses those figures. Industry speculation is that the ABA earns more than USD20 million annually, but that number could not be independently confirmed by FinOps Report. Unlike CGS, Bloomberg does not charge issuers fees to be assigned FIGIs nor end users any licensing fees. However, financial firms do pay to use Bloomberg’s terminals and applications which could include FIGIs as ID codes for securities.
Formal industry complaints over licensing fees for CUSIPs started back in 2010 when the Bond Dealers of America, Investment Adviser Association and Government Finance Officers Association of the U.S. and Canada (GFOA) complained to the Securities and Exchange Commission (SEC) that it was inappropriate for CGS to be paid by financial firms because it already it already earned fees from issuers. Their bone of contention has been voiced by others since then, but so far the SEC has declined to take action. The regulatory agency has no legal jurisdiction over CGS, which considers itself as a for-profit data vendor. CGS, in turn, has consistently maintained that its charging practices are transparent, in line with data provider industry norms, and based on fair, reasonable and non-discriminatory terms.
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CUSIPs are critical for not only corporate issuers to raise capital, but also for states and local governments to finance infrastructure projects — such as rail, shipping, and utilities. Rule G-34 of the Municipal Securities Rulemaking Board (MSRB), the self-regulatory agency for the U.S. munibond market, mandates that issuers use CUSIPs to sell their bonds publicly and in most cases through private placements. Those are direct sales to a limited number of sophisticated purchasers without a middleman underwriter. Eager to reduce their tax burden, retail and high-net worth individuals are the largest investors in the munibond market. Banks, insurance firms, and pension plans are also starting to show an interest bringing the value of outstanding US munidebt to over US$4 trillion, by industry estimates.
Investors typically use the MSRB’s Electronic Municipal Market Access (EMMA) service, the official source of munibond information to track information on the debt securities issued by states and municipalities. However, the website includes a restriction imposed by CGS. Investors and others, such as government market analysts, can only view the CUSIPs and relevant descriptive data. They cannot distribute it to others, or even download it to their applications and spreadsheets. That caveat makes it a lot harder to do the proper analysis to generate optimal investment results.
What Went Wrong
The relationship between the GIFDA and CGS might have started on a positive foot, but ended on a sour note. Between May 12 and September 16 of 2022 Shah Mathias, GIFDA’s founder, submitted a request to CGS to receive seven CUSIPs. CGS confirmed receipt and ultimately assigned GIFDA at least three CUSIPs. Between December 2024 and February 2025, GIFDA repeatedly asked CGS to activate the three CUSIPs but received no response. On July 30,2025 when GIFDA applied for another CUSIP, CGS’ senior vice president Scott Preiss allegedly told GIFDA it would not provide a CUSIP sought for the other bond issuance because it was a private placement, which doesn’t require CUSIPs. Yet, as GIFDA noted in its lawsuit, CGS has issued and activated CUSIPs for plenty of other private placements. “There is no legitmate reason to distinghuish between the plaintiffs’s securities from those who received CUSIPs without difficulty,” wrote the non-profit. The MSRB’s Rule G-34 does allow for munibond issuers to be exempt from receiving CUSIPs for private placements, but only under limited circumstances. When the GIFDA in August 2025 suggested changing the verbiage on its bond issuance to indicate it was a Memorandum of Offering so it could be assigned a CUSIP, CGS never responded. .
Munibond issuers are required to complete CGS’ documentation correctly to be allotted a CUSIP. If the GIFDA is to be believed, CGS had initially not disputed any of the information GIFDA provided. So what happened to change CGS’ mind? Preiss’ refusal to activate CGS’ CUSIPs came just twelve days after the SEC charged Shah Mathias and another infrastructure financing company he founded named Ameri Metro (AMRT) with defrauding investors by misrepresenting the company’s business operations, acquisition and valuations in regulatory filings. Ameri Metro, allegedly sold more than USD2.4 million in unregistered securities through two other companies Shah controlled. The GIFDA is located in the same building as Ameri Metro. The common address is 2575 Eastern Boulevard in York, Pennsylvania– a two-floor shared workspace facility. GIFDA’s filings with the Internal Revenue Service also indicated the firm took in less than USD50,000 annually in “gross receipts” and has less than USD200,000 in assets yet it financed infrastructure projects valued at between USD20 billion and USD40 billion.
There is nothing in the CGS’ documentatiion an issuer must successfully complete before obtaining a CUSIP which requires it to disclose pending litigation against senior executives or their affiliation with other entities. However, CGS might have felt it had the right to deny the GIFDA its CUSIPs if it was concerned about the possibility of a fraudulent bond offering. CGS declined to comment for this article, so there is no way to verify its rationale. Hopefully, it will do so on April 7 when it asks a Pennsylvia judge to dismiss GIFDA’s lawsuit. So far, the SEC has taken no further action against Mathias and the other defendants.
Mathias has vehemently denied all of the SEC’s allegations and contends that neither he nor Ameri Metro were “properly served” with the SEC’s complaint. They are fighting back with a vengeance. Earlier this year, Mathias, Ameri Metro and affiliated entities filed a civil lawsuit in the Court of Common Pleas in York, Pennsylvania against two purported whistleblowers to the SEC, Andrew Lentz, Marty Hicks. Also named as defendants are eight SEC employees in its Division of Enforcement who brought the charges against Mathias, Ameri Metro and the other firms. (The SEC’s employees were sued in their individual capacities). Hicks is the former co-chief executive of Ameri Metro, who was fired in 2024 for ‘illegal and unprofessional conduct” while Lentz was a former consultant to a related entity of AMRT. In their complaint, Mathias and the other plaintiffs, contended that the defendants orchestrated a campaign of defamation and regulatory abuse by knowingly submitting false whistleblower complaints and suppressing exculpatory evidence — or infomation that would prove the plaintiffs did not commit any wrongdoing. The claims against the defendants include defamation, civil conspiracy, intentional infliction of emotional distress, and interference with business relationships.
As reported by FinOps Report in March 2022 in their class action lawsuit Dinosaur Financial Group, Hildene Capital and Swiss Life Management also alleged that CGS’ monopoly in assigning identification codes to U.S. securities allowed it to impose restrictions on their use and charge inflated licensing fees. The three plaintiffs claimed that CGS inserts into its contracts with data vendors a clause prohibiting them from providing CUSIPs to any financial firm which has not signed a separate licensing agreement directly with CGS. That contract stipulates how a firm can use CUSIPs and also requires the data vendor’s client to be audited by CGS and pay additional fees if it violated the agreement. If a firm refuses to sign the licensing agreement it cannot receive any datafeeds containing CUSIPs. CGS reportedly justifies its restrictions and annual licensing fees on end-users of CUSIPs based on the ABA’s owning the copywright to CGS’ CUSIP system.(The plaintiffs claims’ about contractual restrictions were verified by FinOps Report with several data vendors which requested anonymity).
However, Dinosaur Financial Group, Hildene Capital and Swiss Life Management asserted that CUSIPs cannot be copywrighted because they are not “artistic, literary o aesthetic works.” Instead, they are conventions established more than 50 years ago which determine the format of a CUSIP and each digit within it. Therefore, neither CGS, S&P, the ABA, nor FactSet have the right to control the use of CUSIPs by financial institutions and charge licensing fees.They go on to say that the defendants could not have engaged in “exploitative conduct” and charged these “monopoly rates” in a competitive market. Unlike Dinosaur Financial or Swiss Life Management, Hildene was not required to sign a licensing agreement with CGS. Instead, it had to pay an additional USD10,000 to its data vendor Bloomberg to receive CUSIPs in its datafeed.
Hopefully, a resolution of the case involving GIFDA will shed light on CGS’ methodology to determine when it will grant or deny issuers CUSIPs. even if Mathias and his co-plaintiffs end up losing. A win in the class-action lawsuit could put some money in the pockets of affected financial firms after hefty legal and administrative fees are deducted. Dinasour Financial Group, Hildene Capital and Swiss Life Management are represented by the law firms of Competition Law Partners, Kaplan Fox & Kilsheimer and Irell & Manella. CGS might also be forced to change its business model and relatiionships with FactSet and the ABA since they will likely have to contribute to some percentage of the compensation for the affected financial firms. Meanwhile, Bloomberg is likely waiting in the wings to see how its FIGIs will benefit from the lawsuits after it has spent so much time and effort promoting FIGIs as a better alternative to CUSIPs.
FinOps Report will continue to follow the significant cases affecting our readers and would love to hear your thoughts. Please email the editor
Chris Kentouris
KentourisC@gmail.com
917.510.3226
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