Deutsche Bank, Rabobank European Government Bond Trading Antitrust Class Action

This antitrust class action goes after two banks and their affiliated securities companies, alleging they conspired to fix or otherwise manipulate the price of Euro-denominated bonds that are issued by various European governments. The defendants include Deutsche Bank, AG and its dealer affiliate Deutsche Bank Securities, Inc., and Cooperative Rabobank UA (formerly known as Cooperatieve Centrale Raiffeisen-Boerenleenbank UA) and its dealer affliate Rabo Securities USA, Inc.

The class for this action is all persons or entities who bought or sold European Government Bonds in the US directly from the defendants in this case, between at least as early as January 1, 2005 and at least December 31, 2016.

The complaint alleges, “European Government Bonds are sovereign debt issued by European central governments that have the euro as their official currency, including Austria, Belgium, Finland, France, Germany, Italy, Portugal, Greece, Ireland, the Netherlands, and Spain, among others…” The bonds are bought as investments by US institutional investors, mutual funds, hedge funds, pension funds, and insurance companies.

The bonds are issued in the primary market, where Deutsche Bank AG and Rabobank UA were designated as primary dealers of the bonds during the period at issue. The bonds are then traded in the secondary market, the complaint alleges. Dealers normally compete for customers via the bid (buy) and ask (sell) prices they set for the bonds, the complaint claims, and the smaller the “spread” between the two prices, the more competitive the prices are for the customer.

But the complaint alleges that dealers for the defendants in this case conspired to fix the bid-ask spreads for the bonds in the secondary market. According to the complaint, they did this by communicating by email and in private online chat rooms, where the “traders secretly exchanged commercially sensitive information and coordinated their pricing and trading strategies before agreeing to prices that they would quote to their customers for European Government Bonds.”

The European Commission issued a Statement of Objections to the two banks in December 2022, the complaint claims, that said “that between 2005 and 2016 the two banks, through some of their traders, exchanged commercially sensitive information and coordinated their pricing and trading strategies when trading [European Government Bonds] in the secondary market in the European Economic Area…” The complaint is contending that they have done the same thing in the US, in the New York market for the bonds.

Deutsche Bank has been given conditional immunity in exchange for its cooperation, the complaint says, and claims that one condition is that it admit that it participated in the cartel.

Article Type: Lawsuit
Topic: Antitrust
Tags: Antitrust, Collusion and Price Fixing, Securities