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Posted: March 26, 2019

Lawsuits Filed Over Eurozone Bond Bid-Ask Rigging

On March 22, 2019, the Ohio Carpenters’ Pension Fund filed a proposed antitrust class action in the Southern District of New York.

The complaint alleges that Bank of America and NatWest (f/k/a RBS) conspired to rig the bid-ask spreads of Eurozone government bonds between 2007 and 2012. The complaint specifically alleges that the defendants were (nominally) competing “primary dealers” for the sale of the bonds to investors, but that they colluded to increase their bid-ask spread collectively in order to avoid competitive disadvantage and potential loss of the issuers’ business.

On January 31, 2019, the European Commission issued a press release stating that it had formed the “preliminary view” that “eight banks participated in a collusive scheme that aimed at distorting competition when acquiring and trading European government bonds,” and that the collusion activity largely took place on internet chat rooms. This story was widely reported by financial press outlets such as Bloomberg. Although the Commission did not name the banks involved, NatWest/RBS has been identified as a likely subject of the investigation. A related lawsuit has been filed in the District of Connecticut.

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