European Commission fines 3 investment banks for collusion

UBS Group AG and Nomura Holdings Inc. and UniCredit SpA were fined a total of 371 million euros ($452 million) by the European Union for colluding on euro government bond trading during the region’s sovereign debt crisis, Report informs referring to Bloomberg.

UBS was fined 172 million euros and Nomura will have to pay 129.6 million euros for a traders’ cartel that swapped commercially sensitive information from 2007 to 2011 when euro region bond yields soared. UniCredit was fined 69 million euros.

Bank of America Corp. and Natixis SA participated in the cartel but weren’t fined because they had quit the cartel five years before the EU started its probe. The finding against them means they would be seen as repeat offenders and would face higher fines from any future EU cartel. Institutional investors could also sue all members of the cartel for damages.

The EU said traders on European government bond desks, and mostly in London, were in regular contact, mainly on chatrooms, where they “informed and updated each other on their prices and volumes offered in the run-up” to euro zone government bond auctions “and the prices shown to their customers or to the market in general.”

The EU didn’t seek to show that traders’ actions affected bond yields, with their case focusing on the illegality of sharing commercially sensitive information.