Five banks sued in U.S. for rigging $9 trillion agency bond market

Five major banks and four traders were sued on Wednesday in a private U.S. lawsuit claiming they conspired to rig prices worldwide in a more than $9 trillion (£6 trillion) market for bonds issued by government-linked organisations and agencies.

Bank of America Corp (>> Bank of America Corp), Credit Agricole SA (>> CREDIT AGRICOLE), Credit Suisse Group AG (>> Credit Suisse Group AG), Deutsche Bank AG (>> Deutsche Bank AG) and Nomura Holdings Inc (>> Nomura Holdings, Inc.) were accused of secretly agreeing to widen the “bid-ask” spreads they quoted customers of supranational, sub-sovereign and agency (SSA) bonds.

The lawsuit filed in Manhattan federal court by the Boston Retirement System said the collusion dates to at least 2005, was conducted through chatrooms and instant messaging, and caused investors to overpay for bonds they bought or accept low prices for bonds they sold.

Read on.

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