6 major banks settle for $80 million in European bond-rigging allegations

A preliminary $80 million settlement reached by six major banks in New York , including Bank of America and Citigroup Inc., would resolve the antitrust litigation accusing them of conspiring to rig European government bond prices . Filed late Friday in Manhattan federal court, the preliminary settlement involves Bank of America, Citigroup, Jefferies, NatWest, Nomura Holdings Inc., and UBS awaiting a judge's approval.

The investors, led by three public pension funds, accused the banks of collusion in online chat rooms from 2007 through 2012 whereby they would bid high prices at bond auctions to secure dominant market share and sell those same bonds at inflated prices to mutual funds, pension funds, insurers, and other investors. All six banks have denied any wrongdoing in their agreement to settle.

If approved, this settlement would add to the total settlements of $120 million. JPMorgan Chase, Natixis, State Street and UniCredit previously settled for a combined $40 million. The case is part of more than a decade of litigation in the Manhattan court, which alleged that banks conspired in multiple markets, including US Treasuries, currencies, commodities, and interest-rate benchmarks.

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The case is In re European Government Bonds Antitrust Litigation, US District Court, Southern District of New York, No. 19-02601.

This settlement reflects the continued scrutiny and legal pressure on the market behaviour of major financial institutions. This litigation chapter will likely be closed with another reminder that it is important for the smooth and fair operation of markets and investor confidence.