Nomura, UBS and UniCredit fined €371 million for bond trading cartel

Despite its involvement, NatWest was not fined as it revealed the cartel, while Bank of America, Natixis and Portigon also evaded penalties.

Nomura, UBS, and UniCredit have been fined €371 million by the European Commission for their roles in a bond trading cartel that involved several banks between 2007 and 2011. 

NatWest was not fined for its involvement as it revealed the cartel to the European Commission while Bank of America and Natixis were not fined as their infringement fell outside of the limitation period for imposing a fine. 

Portigon, formerly WestLB, was also not fined as it did not generate any net turnover in the last business year and this served to cap any potential fines placed on it.

Traders on the seven investment banks’ European government bond trading desks shared sensitive information, coordinated on prices and aligned their trading strategies via chatrooms and Bloomberg Terminals, said the Commission.

The manipulative activity included giving updates on their bidding strategy in the run up to the auctions of the Eurozone Member States when issuing Euro denominated bonds on the primary market, and on later on trading parameters on the secondary market. 

“A well-functioning European government bonds market is paramount both for the Eurozone Member States issuing these bonds to generate liquidity and the investors buying and trading them,” said Margrethe Vestager, executive vice president of the commission.

“Our decision against Bank of America, Natixis, Nomura, RBS, UBS, UniCredit and WestLB sends a clear message that the Commission will not tolerate any kind of collusive behaviour. It is unacceptable, that in the middle of the financial crisis, when many financial institutions had to be rescued by public funding these investment banks colluded in this market at the expense of EU Member States.” 

This is the second bond trading cartel to be uncovered by the European Commission in less than two months after it fined Bank of America Merrill Lynch, Credit Agricole and Credit Suisse €28 million at the end of April.