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 $US9 trillion ($F19t) market for bonds issued by government-linked organisations and agencies.
Bank of America Corp, Credit Agricole SA, Credit Suisse Group AG, Deutsche Bank AG and Nomura Holdings Inc were accused of secretly agreeing to widen the “bid-ask” spreads they quoted customers of supranational, sub-sovereign and agency (SSA) 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.”
The proposed class-action lawsuit seeks triple damages, and follows probes by US and EU antitrust regulators into possible SSA bond price rigging.
Those probes are also examining the London-based defendant traders Hiren Gudka of Bank of America, Bhardeep Singh Heer of Nomura, Amandeep Singh Manku of Credit Agricole and Shailen Pau of Credit Suisse, Thomson Reuters’ IFR service reported in January.
Bank of America, Credit Suisse, Deutsche Bank and Nomura declined to comment on behalf of themselves and the traders who have worked for them. Credit Agricole did not immediately respond to a request for comment.
Mr Gudka previously worked at Deutsche Bank, Mr Manku at Bank of America, and Mr Pau at Credit Agricole, the complaint said.
The lawsuit is one of many in the Manhattan federal court seeking to hold banks liable for alleged price-fixing in bond, commodity, currency, derivatives, interest rate and other financial markets.
