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US: Five banks sued in for rigging $9 trillion agency bond market

By  |  May 19, 2016

Five major banks and four traders were sued on Wednesday in a private US lawsuit claiming they conspired to rig prices worldwide in a more than $9 trillion market for bonds issued by government-linked organizations and agencies.

Bank of America, Credit Agricole SA , Credit Suisse Group AG , Deutsche Bank AG and Nomura Holdings were accused of secretly agreeing to widen the “bid-ask” spreads they quoted customers of supranational, sub-sovereign and agency bonds.

The lawsuit filed in Manhattan federal court by the Boston Retirement System said the collusion dates to at least 2005, was conducted through chatrooms and instant messaging, and caused investors to overpay for bonds they bought or accept low prices for bonds they sold.

“Only through collusion could a dealer quote a wider spread than market conditions otherwise dictate without losing market share and profits,” the complaint said. “Defendants reaped millions of dollar(s) in profits at the expense of plaintiff and members of the class as result of their misconduct.”

Full Content: Reuters

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