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BLOOMBERG
Bank of America Corp. and Deutsche Bank AG were among five banks sued over claims that traders conspired to manipulate trading agency bonds issued by government entities and institutions like the World Bank, harming investors who bought and sold the securities.
The suit by Boston Retirement System, a pension fund representing city workers, follows inquiries by US and UK authorities into the market for the debt, known as supranational, sub-sovereign and agency bonds, or SSAs. The probes target alleged illegal collusion in international trading and follow billions of dollars in settlements over claims that banks rigged interest-rate benchmarks and currency markets.
“Defendants’ scheme was driven by greed and opportunity,†the fund said in the complaint filed Wednesday in Manhattan federal court.
The lawsuit, which also names Credit Agricole SA, Credit Suisse Group AG and Nomura Holdings Inc. or their units as defendants, resembles claims made against banks over misconduct in currency markets. It accuses traders of colluding with one another to fix prices at which they bought and sold SSA bonds in the secondary market. It adds the threat of possible triple damages available under U.S. antitrust law for investors harmed by any illegal price-fixing.
The SSA market is generally defined to include
international development organizations, government-sponsored entities and some sovereign debt. Depending on the securities, the market could range from $9 trillion to $15 trillion.
according to data compiled by Bloomberg. The bonds generally have high credit ratings because of explicit or implicit guarantees they carry.
Among those being probed by U.S. and U.K. authorities are London traders Hiren Gudka, formerly at Bank of America and Deutsche Bank, Amandeep Singh Manku, formerly of Credit Agricole, Bhardeep Singh Heer of Nomura and Shailen Pau, formerly of Credit Suisse, people familiar with the matter have said. All four are named as defendants in the complaint. They couldn’t immediately be reached for comment on the lawsuit and didn’t respond to earlier requests for comment on the US and UK investigations.