Banks reach $86M bond rigging settlement in Manhattan

Mexican subsidiaries of six major global banks have agreed to pay $86.4 million to settle claims they rigged the market for Mexican government bonds. The preliminary settlement, filed in Manhattan federal court, closes out an antitrust lawsuit that dragged on for more than eight years.

The banks involved include some of the biggest names in global finance: Bank of America, Banco Santander, BBVA, Citigroup, Deutsche Bank, and HSBC. None admitted wrongdoing.

A decade-long alleged conspiracy

The lawsuit, brought by US pension funds and other investors, accused the banks’ Mexican subsidiaries of fixing prices and coordinating allocations of Mexican government bonds, commonly known as MGBs. The alleged collusion ran from January 1, 2006 through April 19, 2017, covering more than 11 years of market activity.

Plaintiffs presented evidence that included chatroom transcripts from internal communications among traders at the various banks. The conversations, according to the lawsuit, revealed patterns of coordination among the banks. The banks are accused of suppressing prices when buying MGBs while inflating them during sales.

This latest $86.4 million settlement isn’t the first payout in the case. JPMorgan Chase settled separately for $15 million and Barclays for $5.7 million back in 2020, bringing the total recovery across the entire litigation to $107.1 million.

The lawyers get their cut

The plaintiffs’ legal team stands to request up to one-third of the total settlement sum. That works out to roughly $28.8 million in potential attorney fees, a figure that will need court approval before any checks get written.

The remaining funds, after fees and administrative costs, would be distributed among the class of affected investors. US pension funds led the plaintiff class.

Part of a much bigger pattern

This settlement fits neatly into a broader pattern of antitrust litigation in Manhattan federal court targeting alleged collusion by banks across multiple financial markets. Over the past decade, similar cases have targeted alleged price-fixing in everything from foreign exchange markets to interest rate benchmarks to credit default swaps.

With both this settlement and the earlier JPMorgan/Barclays deal now resolving all remaining claims, the institutions can close the books on a case that has been working its way through the federal court system since roughly 2018.

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