Mexico’s antitrust fee is planning to positive a number of world banks and particular person merchants after ruling that they conspired to control costs for peso bonds early final decade, individuals conversant in the matter stated.
The choice, which was reached on Jan. 14, is ready to be made public in coming days, the individuals stated, asking to not be recognized as a result of the ruling hasn’t been introduced.
It wasn’t instantly clear which corporations and people will probably be fined. However the fee’s investigative unit discovered proof in 2019 of collusion by the Mexican models of Barclays Plc, Bank of America Corp., Banco Bilbao Vizcaya Argentaria SA, Deutsche Bank AG and JPMorgan Chase & Co., in addition to Banco Santander Mexico SA and Citigroup Inc.’s native unit, Citibanamex.
A spokesperson for the antitrust fee, often known as Cofece, declined to remark. The company is barred from talking publicly about its rulings till all of the events concerned have been notified.
JPMorgan, Bank of America, Citigroup, Deutsche Bank and Barclays declined to remark, and a spokesman for Santander Mexico stated the corporate would remark when there’s a public decision of the matter by Cofece. BBVA didn’t instantly reply to a request for remark.
Banks may face fines of as a lot as 10% of their native models’ income beneath Mexican regulation, nevertheless it isn’t but clear if all the businesses that have been named in 2019 will probably be fined or how giant the levies will probably be. Eleven present and former merchants additionally testified within the case, registries on the antitrust fee’s web site present. Banks have been being notified Thursday and Friday, one of many individuals stated.
The choice by the antitrust regulator would mark a uncommon rebuke for banks and merchants in Mexico, the place jail time for monetary crimes is extraordinarily uncommon and fines are comparatively small. Mexico lagged behind different international locations practically a decade in the past after regulators uncovered manipulation in interest-rate markets within the U.S. and Europe.
“Mexico was behind in terms of investigating potential collusion among traders, but since that was already a big issue in the U.S. or the UK, those regulators influenced the banks, and that worked toward addressing the problem in Mexico even before the antitrust agency started to look into it,” stated Sergio Luna, the previous chief economist at Citibanamex who stepped down late final 12 months and now works as a marketing consultant.
The antitrust ruling, which one of many individuals stated is round 2,000 pages lengthy, follows a probe launched in 2016 that seemed again into 10 years of merchants’ chats and bank data.
Whereas Cofece initially stated it was investigating banks for colluding to control costs in each central bank auctions and when promoting to funds and purchasers, the fees deal with alleged price rigging within the secondary market through the early a part of the final decade, the individuals stated. The case doesn’t embody proof concerning central bank auctions, they stated.
Final 12 months, Barclays and JPMorgan agreed to pay a mixed $20.7 million to settle prices in New York that their Mexican associates conspired with different banks to promote Mexican bonds at inflated costs to U.S. pension funds. That case stemmed from info gathered within the Cofece probe. The U.S. choose later threw out prices in opposition to the remainder of the banks, arguing he didn’t have jurisdiction over alleged manipulation in Mexico.
The U.S. case cites transcripts obtained by Cofece that allegedly present merchants fashioned chat rooms, together with one referred to as the “hamster squad,” the place they mentioned buyer orders and coordinated trades.
Mexico’s securities and banking regulator did its personal investigation and fined six world banks and merchants in late 2018 a complete of a little bit over $1 million for manipulating bond-trading volumes.
— With help by Nacha Cattan