(Bloomberg) -- Credit Suisse’s new owner UBS Group AG and Credit Agricole SA lost a European Union court fight against multimillion-euro penalties for a bond trading cartel between rival banks.
Judges at the EU’s General Court in Luxembourg backed the European Commission’s 2021 decision to slap Credit Suisse and Credit Agricole SA with fines of €11.9 million ($12.8 million) and €3.9 million for allegedly colluding in chatrooms on trading of U.S. supra-sovereign, sovereign and agency bonds.
“The court holds that the conduct adopted by the traders of the banks concerned formed part of an overall plan pursuing a single anti-competitive objective,” judges at the EU General Court said on Wednesday. It added that it backs the full amount of the fines imposed. The ruling can be appealed to the bloc’s EU Court of Justice.
The EU’s antitrust arm had accused the banks — along with Bank of America and Deutsche Bank AG — of colluding on trading strategies, exchanging sensitive pricing information and coordinating on prices.
Margrethe Vestager, the EU’s competition commissioner, said at the time that traders restricted competition “in a market in which investment and pension funds regularly buy and sell bonds on behalf of their investors and pensioners.”
Credit Agricole said it’s considering whether to appeal the ruling. It said the fine was already paid and so the judgment will have no impact on its future results. UBS declined to comment.
Inspired by a BBC TV comedy show, the accused traders called themselves “the Kumars.” They chatted with each other on an almost daily basis, switching from group chat groups to one-on-one messages and even phone calls after banks tried to curb communications with rivals in the wake of massive fines from previous traders’ cartels.
As part of the package of penalties doled out, Bank of America was also fined €12.6 million. Deutsche Bank AG dodged a potential penalty of about €21.5 million because it was the first to inform the EU about the illegal behavior.
The fines were far lower than previous EU cartel penalties, due to the relatively small size of the market concerned. Citigroup Inc., Royal Bank of Scotland Group Plc and JPMorgan Chase & Co. were among five banks that agreed in 2019 to pay EU fines totaling 1.07 billion euros for colluding on foreign-exchange trading strategies.
UBS acquired Credit Suisse in a government-brokered rescue last year and since then has been dealing with a raft of legal issues inherited from its former rival.
In 2021, UBS was seperately hit with a €172.4 million fine for taking part in a European government bond trading cartel during the European debt crisis between 2007 and 2011. It also appealed that penalty to the bloc’s lower court.
(Updates with comments in sixth paragraph.)
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