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The European Commission is currently investigating whether Deutsche Bank and Rabobank broke EU antitrust rules by colluding to distort competition through a bond trading cartel.
From 2005-2016, Deutsche Bank and Rabobank allegedly shared sensitive information and coordinated pricing and trading strategies through email and chat network communications when trading euro-denominated government bonds, SSAs, covered bonds and government-guaranteed bonds, as would distort competition.
After deciding to abandon the settlement with the banks due to a lack of progress, the watchdog is now in the process of following an antitrust proceeding that includes providing the parties with rights of reply and defense. If, after completing this procedure, the supervisory authority finds evidence of a violation, it can prohibit the conduct and impose a fine of up to 10% of the company’s annual worldwide turnover.
“Deutsche Bank proactively cooperated with the European Commission on this issue and as a result was granted conditional immunity,” the Deutsche Bank statement said.
“In accordance with the guidelines of the European Commission, Deutsche Bank does not expect a fine.” As this is an ongoing investigation, we are unable to comment further.
Rabobank did not respond to a request for comment at the time of publication.
The investigation is the third of its kind in recent years after five major investment banks – Barclays, Royal Bank of Scotland (RBS), Citigroup, JP Morgan and MUFG – were fined a total of around €1 billion by European authorities in 2019 for participation in cartels for fixing the foreign exchange spot market for 11 currencies.
Most recently, in 2021, in two separate bond cartels, Nomura, UBS and UniCredit in May and Bank of America Merrill Lynch, Credit Agricole and Credit Suisse in April were fined 371 and 28 million euros, respectively.
Regulators around the world have increasingly clamped down on unregulated communication channels like WhatsApp as these cases have become more common.
The U.S. Securities and Exchange Commission (SEC) confirmed in November that its enforcement fines rose to a record for the government’s fiscal year, with enforcement actions totaling $6.4 billion in fines, up from $3.9 billion last year. years. Penalties related to using messaging services like WhatsApp to conduct business have largely led to this increase. In July, Bank of America was fined $200 million by the Securities and Exchange Commission (SEC) over the use of “unapproved personal devices,” joining JP Morgan and Morgan Stanley that also received multimillion-dollar fines from regulators in the same month.
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