Mexico fines 7 international banks for manipulating debt market


Cofece found that Barclays, Deutsche Bank, Santander, Citibank, Bank of America, BBVA, and JP Morgan Chase made 142 illegal agreements to buy or sell at a certain price

The Mexican competition regulator reported Monday that it imposed fines totaling 35 million pesos ($ 1.75 million) on seven international banks and 11 operators for colluding to manipulate the secondary sovereign debt market between 2010 and 2013.

The authority said it found evidence that the local subsidiaries of the banks Barclays, Deutsche Bank, Santander, Citibank, Bank of America, BBVA and JP Morgan Chase made 142 illegal agreements to sell or buy at a certain price or not to trade or acquire certain papers of government debt.

“(These behaviors) had a direct impact on the price of the related instruments in said transactions in the secondary market,” added the antitrust entity, Cofece, in a statement.

The damage caused to investors who acquired the bonds with manipulated prices was almost 30 million pesos (1.46 million dollars), according to the authority’s estimate. In one case, the agreement was to sell more expensive debt papers to a pension fund, he added.

To carry out the agreements, the operators exchanged messages through the platforms contracted by the banks as tools to carry out the transactions, said the agency, which made the investigation public in 2017.

In 2018, the competition regulator had already imposed fines on some of the banks for manipulating operating volumes, but the decision was appealed.

The amount of the current sanction, Cofece explained, was calculated based on the previous regulation of the agency, so the amounts were lower than those that would correspond to pay under the methodology established in current legislation.

Santander responded in a statement that “it does not accept the accusations” of Cofece and that “it will resort to courts in order to legally fight” the determination. BBVA, the other defendant Spanish bank, said it has “a different interpretation” than the authority and that it will analyze its next steps. The rest of the institutions declined to comment.


Mexico Daily Post