Major banks including Goldman Sachs Group Inc., Bank of America Corp., Credit Suisse Group AG and JPMorgan Chase & Co. must face allegations that they conspired to prevent the “antiquated” stock loan market from evolving into a transparent electronic exchange.

The banks are accused of conspiring to boycott new market entrants to maintain their monopoly grip as prime broker intermediaries and hold onto billions of dollars in revenue.

A federal judge in Manhattan on Thursday refused the banks’ request to dismiss the lawsuit led by pension funds, without addressing the merits.

“While it remains to be seen whether plaintiffs’ factual allegations will be borne out in discovery, the court is not permitted to dismiss them at this early stage of the litigation,” U.S. District Judge Katherine Polk Failla wrote.

Securities lending is important to short selling, when an investor borrows securities in order to immediately sell them. Institutional investors with large holdings of stocks profit by lending them out, while borrowers aim to profit by buying the security later at a lower price.