Four leading global banks have agreed to pay over £100 million ($127 million) in fines to settle an antitrust investigation into collusion by their traders, who illegally shared sensitive information in online chatrooms about UK government bond (gilt) trading between 2009 and 2013.
The Competition and Markets Authority (CMA) revealed on Friday that traders from Citigroup, HSBC, Morgan Stanley, and Royal Bank of Canada had engaged in unlawful behaviour, sharing confidential pricing and trading details in relation to the buying and selling of gilts. This settlement follows years of scrutiny over bond market practices, with Deutsche Bank AG avoiding a penalty due to its self-reporting of the issue.
The CMA explained that the fines would have been significantly higher had the banks not already taken substantial corrective actions to prevent similar occurrences in the future. Juliette Enser, Executive Director of Competition Enforcement at the CMA, acknowledged the steps taken by the banks to address the misconduct, although the illegal activities still resulted in financial penalties.
The case primarily involved a small group of traders within the banks, who used chatrooms to exchange strategies and insights into pricing and trading in the UK government bond markets. Some of the discussions allegedly took place during the Bank of England’s buy-back auctions in 2009, as part of its quantitative easing measures aimed at addressing the aftermath of the 2008 financial crisis.
This investigation is part of a wider push by European regulators to clamp down on collusion in the bond market, following similar probes into several of the region’s largest financial institutions. The fines serve as a stark reminder of the continued vigilance required in the highly competitive and sensitive arena of financial markets.
