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Bank
of America Corp, Credit Agricole SA, Credit Suisse Group AG,
Deutsche Bank AG and Nomura Holdings Inc were accused of
secretly agreeing to widen the "bid-ask" spreads they quoted
customers of supranational, sub-sovereign and agency (SSA)
bonds.
The lawsuit filed in Manhattan federal court by the Boston
Retirement System said the collusion dates to at least 2005, was
conducted through chatrooms and instant messaging, and caused
investors to overpay for bonds they bought or accept low prices
for bonds they sold.
"Only through collusion could a dealer quote a wider spread than
market conditions otherwise dictate without losing market share
and profits," the complaint said. "Defendants reaped millions of
dollar(s) in profits at the expense of plaintiff and members of
the class as result of their misconduct."
The proposed class-action lawsuit seeks triple damages, and
follows probes by U.S. and European Union antitrust regulators
into possible SSA bond price rigging.
Those probes are also examining the London-based defendant
traders Hiren Gudka of Bank of America, Bhardeep Singh Heer of
Nomura, Amandeep Singh Manku of Credit Agricole and Shailen Pau
of Credit Suisse, Thomson Reuters' IFR service reported in
January.
Bank of America, Credit Suisse, Deutsche Bank and Nomura
declined to comment on behalf of themselves and the traders who
have worked for them. Credit Agricole did not immediately
respond to a request for comment.
Gudka previously worked at Deutsche Bank, Manku at Bank of
America, and Pau at Credit Agricole, the complaint said.
The lawsuit is one of many in the Manhattan federal court
seeking to hold banks liable for alleged price-fixing in bond,
commodity, currency, derivatives, interest rate and other
financial markets.
One such lawsuit, concerning competition in the credit default
swaps market, led last September to a $1.86 billion settlement
with a dozen banks.
SSA bonds are sold in various currencies by issuers such as
regional development banks, infrastructure borrowers including
highway and bridge authorities, and social security funds.
Many carry explicit or implicit backing from governments, and
thus enjoy high investment-grade ratings.
The case is Boston Retirement System v Bank of America NA et al,
U.S. District Court, Southern District of New York, No.
16-03711.
(Reporting by Jonathan Stempel in New York; Editing by Toni
Reinhold)
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