In a recent development, six major banks, including Bank of America and Citigroup, have agreed to pay a total of $80 million to settle antitrust litigation in New York. The lawsuit accuses these banks of conspiring to manipulate the prices of European government bonds. The preliminary settlement was filed in Manhattan federal court and is pending approval from a judge.
According to the investors, led by three public pension funds, the banks colluded to rig prices of European government bonds between 2007 and 2012. They allegedly used online chatrooms to coordinate bidding high prices at bond auctions, ensuring a dominant market share. Subsequently, they sold the bonds at inflated prices to mutual funds, pension funds, insurers, and other investors.
The six banks – Bank of America, Citigroup, Jefferies, NatWest, Nomura, and UBS – have denied any wrongdoing but have agreed to settle the case. If approved, the settlements would bring an end to the litigation, totaling $120 million in settlements. Previously, JPMorgan Chase, Natixis, State Street, and UniCredit settled for a combined $40 million.
This case is part of a larger trend of litigation in the Manhattan court involving allegations of collusion by banks in various markets. These markets include U.S. Treasuries, currencies, commodities, and interest rate benchmarks. The case is formally known as In re European Government Bonds Antitrust Litigation and is filed in the U.S. District Court for the Southern District of New York under case number 19-02601.
The settlement of antitrust litigation among these major banks sheds light on the ongoing issues of collusion and market manipulation within the financial sector. While all parties involved have denied any wrongdoing, the significant settlement amounts suggest a recognition of potential misconduct. It remains to be seen how this case will impact future regulations and oversight within the banking industry.