Banks reach $86.4 million Mexican bond rigging settlement in Manhattan

• Bank of America, Banco Santander, BBVA, Citigroup, Deutsche Bank, and HSBC settled claims they conspired to fix prices and allocations of Mexican government bonds from January 2006 to April 2017, though the banks denied wrongdoing
• Investors cited chatroom transcripts as evidence that banks suppressed prices of bonds they purchased and inflated prices of bonds they sold
• The case is part of over a decade of litigation in Manhattan targeting alleged collusion by major banks to manipulate interest rates, U.S. Treasuries, bonds, currencies, and commodities

Summary

Six major international banks have agreed to pay $86.4 million to settle an antitrust lawsuit alleging manipulation of the Mexican government bond market. The Mexican banking affiliates of Bank of America, Banco Santander, BBVA, Citigroup, Deutsche Bank, and HSBC reached the preliminary settlement, filed late Friday in Manhattan federal court.

Key Details:

• Total settlement value: $107.1 million (before legal fees), including prior settlements of $20.7 million by Barclays and JPMorgan Chase in 2020
• Current settlement amount: $86.4 million from the six banks
• Alleged conspiracy period: January 1, 2006 to April 19, 2017
• Legal fees: Plaintiff lawyers may seek up to one-third ($28.8 million) of the total payout

Allegations:

Investors, led by several pension funds, accused the banks of conspiring to fix prices and allocations of Mexican government bonds. Evidence included chatroom transcripts allegedly showing coordination to suppress purchase prices and inflate selling prices. All banks denied wrongdoing while agreeing to settle.

Market Context:

This case is part of a broader pattern of litigation spanning more than a decade targeting major banks for alleged collusion in manipulating various financial markets, including interest rates, U.S. Treasuries, bonds, currencies, and commodities.

The eight-year-old lawsuit will be resolved pending judicial approval. The settlement underscores ongoing regulatory scrutiny of potential market manipulation by major financial institutions and the significant financial and reputational risks banks face from antitrust litigation in fixed-income markets.