Six Major Banks Settle European Bond Price-Fixing Litigation

Six major banks have agreed to a combined settlement of $80 million over allegations of price-fixing in the European government bond market. The banks involved are Bank of America, Citigroup, Jefferies, NatWest, Nomura, and UBS.

The preliminary settlement was filed late Friday in Manhattan federal court and now awaits a judge’s approval. This marks a pivotal moment in the case, which saw investors led by three public pension funds accusing the banks of colluding to manipulate bond prices.

According to the allegations, the banks engaged in illicit activities between 2007 and 2012. The investors claimed that bank traders coordinated via online chatrooms to bid high prices at bond auctions, securing a dominant market position. They then purportedly sold the bonds at inflated prices to mutual funds, pension funds, insurers, and other investors, leading to substantial financial damages.

Despite agreeing to the settlement, all six banks have denied any wrongdoing. If approved, Friday’s settlements will bring the total payouts in the case to $120 million. Previously, JPMorgan Chase, Natixis, State Street, and UniCredit had settled similar allegations for a combined $40 million.

Read more: Canadian Breadmakers Settle Price-Fixing Lawsuit

This case forms part of an extensive wave of litigation spanning more than a decade in the Manhattan federal court. Banks have been accused of collusion across various markets, including U.S. Treasuries, currencies, commodities, and interest rate benchmarks. These cases have highlighted widespread concerns about unethical practices within the financial industry, prompting rigorous scrutiny and regulatory action.

Source: Investing