US/UK: Chat records show 300 days of bond rigging

Hundreds of electronic chat transcripts prove that some of the world’s biggest banks rigged a multi-trillion-dollar corner of the bond market, according to an amended lawsuit from investors allege they were harmed by the behavior that may have gone back as far as 2005.

The bonds in question are known as supranational, sub-sovereign and agency debt — often called SSA bonds. A Bloomberg analysis last year estimated it at a $9 trillion to $15 trillion market. Issuers include international development organizations, government-sponsored agencies like Fannie Mae, and some sovereign issuers including German states.

The amended complaint filed Monday added five more banks as defendants: Citigroup, BNP Paribas, HSBC Holdings, Toronto-Dominion Bank and Royal Bank of Canada, plus a former trader who worked for Bank of America, Citi and TD. The banks either declined to comment or didn’t immediately respond to requests for comment.

“Rare is the antitrust case where smoking gun evidence exists, and rarer still does it exist at the pleading stage,” according to the lawsuit. “Nevertheless, that is the situation here.” The chats are said to cover more than 300 trading days.

Full Content: Bloomberg

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