Citi, Other Banks Lose Antitrust Ruling Over Euro Bond Rigging

Citigroup Inc. affiliates must face antitrust litigation over the $8 trillion market for European government bonds, but a federal judge in Manhattan let affiliates of JPMorgan Chase & Co., Bank of America Corp., and UBS Group AG exit the case.

Judge Victor Marrero advanced claims that Citi and several other financial institutions conspired to widen the spread between what they paid for the bonds and what they got for them. The proposed class action is part of a wave of cases claiming traders from top banks colluded in industry chatrooms.

Marrero, writing Monday, said the lawsuit offered “strong circumstantial evidence” of a broad Euro bond price-fixing scheme between 2007 and 2012. He also found most of the claims timely, despite a four-year statute of limitations, based on the “self-concealing” nature of the alleged cartel tactics.

Chat transcripts show traders “sharing information in a manner that would be against their respective employers’ interests,” raising the inference that the banks “would not countenance such improper conduct absent an unlawful agreement or conspiracy,” the judge wrote.

But the suit only directly implicates certain affiliates of Citi, Natixis SA, Nomura Holdings Inc., UniCredit sPa, and Jefferies LLC, the judge said. He let JPMorgan, BofA, UBS, and three other banks out of the case for several different reasons.

The ruling comes nearly two years after Marrero tentatively tossed most of the case over similar concerns, saying the allegations failed to tie most of the banks to any specific acts of market manipulation. He let it move forward at the time against Natixis and Nomura affiliates.

State Street Corp. subsequently reached a “cooperation only” settlement in June, and the pension funds leading the case filed a fourth amended complaint restating some of their claims and adding additional banks as defendants.

In his decision Monday, Marrero found that the pension funds generally did enough due diligence to invoke the “fraudulent concealment” exception to the statute of limitations. But they failed to show any misdirection by JPMorgan, making the claims against it untimely, he said.

The allegations against BofA subsidiary Merrill Lynch, meanwhile, establish parallel bond pricing but no additional evidence of wrongdoing, while the suit offers circumstantial evidence against a different BofA unit that didn’t engage in parallel pricing, the judge found.

“These two halves do not make a whole,” Marrero wrote.

He dismissed claims against affiliates of NatWest Markets SA, Royal Bank of Canada, and UBS on somewhat similar grounds, saying the suit included only “aggregate statistics” that don’t specifically tie them to any alleged market manipulation.

The case is In re European Gov’t Bonds Antitrust Litig., S.D.N.Y., No. 19-cv-2601, 3/14/22.