Four Banks Settle UK Gilts Collusion Case For £104 Million

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Four Banks Settle *** Gilts Collusion Case For £104 Million

(Bloomberg) — Four major banks will pay fines totaling over £100 million ($127 million) to settle a long-running antitrust case over collusion by their traders, who shared sensitive information in chatrooms about buying and selling gilts after the 2008 financial crisis.

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Traders at Citigroup Inc., HSBC Holdings Plc, Morgan Stanley and Royal Bank of Canada unlawfully shared details on pricing and trading in chatrooms between 2009 and 2013, the Competition and Markets Authority said on Friday. Deutsche Bank AG, was exempted from the penalty as it was the first to self report its involvement.

The fines bring to an end the investigation that began in 2018. The probe focused on the conduct of a small number of traders who worked at the banks and involved the sharing of pricing and trading strategies around *** government gilt auctions.

Antitrust watchdogs across Europe have spent more than a decade probing how bank traders swapped information in chatrooms, leading to billions of euros in fines. The investigations followed the EU’s approval for billions of euros in government support to keep many European lenders alive during the financial crisis.

“Deutsche Bank and RBC also coordinated their strategies for trading gilts via brokers on a limited number of occasions,” the CMA said in the statement.

Some of the alleged collusion happened in relation to Bank of England holding buy-back auctions in 2009, in response to the financial crisis as a part of its quantitative easing policy.

The CMA hasn’t made any findings about the impact on the market or financial benefit to the firm, a Morgan Stanley spokesperson said. “Morgan Stanley has taken the commercial decision to draw a line under this long-running CMA investigation into the actions of a single former employee approximately 15 years ago.”

Deutsche Bank “proactively reported the issue” to the *** authority and cooperated in the investigation, its spokesperson said.

Citi cooperated with the CMA and remains committed to ensuring full regulatory compliance, its spokesperson said following the announcement. HSBC has transformed its controls since 2009-10 and has a robust compliance program, a spokesperson said in a statement.

“The conduct in question was historic and our compliance environment has significantly enhanced over the last decade,” a spokesperson for the Royal Bank of Canada said.

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(Updates throughout.)

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