BAML, C.Agricole, C.Suisse fined $34 mln over bond cartel

Bank of America Merrill Lynch (BAML) (BAC.N), Credit Agricole (CAGR.PA) and Credit Suisse (CSAG.UL) were hit with an EU antitrust fine of 28.5 million euros ($34.4 million) on Wednesday for taking part in a bond cartel.

Deutsche Bank (DBKGn.DE) escaped a potential 21.5-million-euro fine because it alerted the cartel to the European Commission.

The EU competition watchdog said the cartel operated in the European secondary trading market related to U.S. denominated supra-sovereign, sovereign and agency (SSA) bonds.

BAML's fine was 12.6 million euros, Credit Suisse 11.9 million and Credit Agricole 3.9 million euros.

Credit Suisse said it would challenge the EU fine in court.

"Credit Suisse continues to believe that the single former employee whom the EC criticized did not engage in anti-competitive conduct," the Swiss bank said in a statement.

The Commission said traders at the four banks colluded on trading strategies, exchanged sensitive pricing information and coordinated on prices over five years via chatrooms on Bloomberg terminals.

The illegal practices included refraining from bidding or removing a bid from the market so that the banks do not compete with each other, or splitting trades between the traders without the customer's knowledge.

"The behaviour of the investment banks restricted competition in a market in which investment and pension funds regularly buy and sell bonds on behalf of their investors and pensioners," European Competition Commissioner Margrethe Vestager said in a statement.

The Commission has in recent years handed down hefty fines to banks for taking part in several foreign exchange cartels, Euribor and Libor benchmark cartels and is currently investigating a European government bond cartel.


By Foo Yun Chee, April 28, 2021