UBS, Nomura, UniCredit fined $601m by EU over financial crisis bond cartel

UBS was fined €172 million (S$279 million), Nomura will have to pay €129.6 million, and UniCredit was fined €69 million. PHOTOS: REUTERS

BRUSSELS (BLOOMBERG) - UBS Group, Nomura Holdings and UniCredit were fined a total of US$452 million (S$601 million) by the European Union for colluding on euro government bond trading during the region's sovereign debt crisis.

UBS was fined €172 million (S$279 million) and Nomura will have to pay €129.6 million for a traders' cartel that swopped commercially sensitive information from 2007 to 2011 when euro zone bond yields soared. UniCredit was fined €69 million.

It was "unacceptable that in the middle of the financial crisis, when many financial institutions had to be rescued by public funding, these investment banks colluded in this market at the expense of EU member states", the EU's antitrust chief Margrethe Vestager said in an e-mail statement.

The EU has spent more than a decade probing how bank traders swopped information in chatrooms, leading to billions of euros in fines. At the same time, it approved billions of euros in government support to keep many European lenders alive during the financial crisis.

Ms Vestager's criticism seems to be aimed at two banks that were not fined. A Royal Bank of Scotland (RBS) Group unit escaped a fine because it was the first to tell regulators. It received a British bailout in 2008. Portigon, the successor bank to bailed-out and failed German lender WestLB, avoided a levy because it had no revenue last year.

Bank of America and Natixis participated in the cartel but were not fined because they had quit the cartel five years before the EU started its probe. While the euro-bond fines are far lower than those of previous EU cartels, they do allow the banks' customers to sue for damages if they can prove higher costs were passed on to them.

UBS said the fine could hurt second-quarter results by as much as US$100 million. It is considering an appeal and has "taken appropriate action years ago to mitigate and improve processes", it said in a statement.

UniCredit "vigorously contests" the fine and will appeal to the EU courts, it said in a statement. The bank "maintains that the findings do not demonstrate any wrongdoing". Nomura did not immediately respond to a request for comment.

Citigroup, RBS and JPMorgan were among five banks that agreed in 2019 to pay EU fines of over €1 billion for colluding on foreign-exchange trading strategies. The EU is still investigating some banks over a related cartel.

Bank of America, Credit Suisse and Credit Agricole were fined about €28.5 million last month over chatrooms where traders swopped information on trading of United States supra-sovereign, sovereign and agency bonds.

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