Four of the world’s banks have agreed to pay fines totalling more than £100mn following an investigation by the UK’s competition watchdog into exchanges of sensitive information about the trading of gilts.
Citi, HSBC, Morgan Stanley and Royal Bank of Canada will pay the penalties after a Competition and Markets Authority investigation found that, between 2008 and 2013, a small number of traders at the banks shared sensitive information in private Bloomberg chat rooms relating to buying and selling gilts on specific dates.
Deutsche Bank was also subject to the probe, which opened in 2018, but has immunity for reporting its conduct to the regulator.
Three of the banks received a 10 per cent reduction in the penalty for settling after the CMA raised its objections. RBC was fined £34.2mn, Morgan Stanley £29.7mn and HSBC £23.4mn.
Citi was fined £17.2mn after being granted a 35 per cent leniency discount and a 20 per cent reduction for settling before the watchdog issued its objections.
The banks have since implemented extensive compliance measures, the CMA said on Friday.
Juliette Enser, executive director of competition enforcement at the CMA, said: “The fines imposed today reflect the CMA’s commitment to dealing with competition law breaches and deterring anti-competitive conduct.”
“The fines would have been substantially higher had the banks not already taken unusually extensive steps to make sure that this doesn’t happen again,” she added.
The four banks have been contacted for comment.
Morgan Stanley said it had “taken the commercial decision to draw a line under this long-running CMA investigation into the actions of a single former employee approximately 15 years ago”.
“The CMA has made no findings regarding impact on the market or of financial benefit to the firm,” the bank added. “Since the time in question the whole industry, including Morgan Stanley, has undergone significant changes, including enhanced supervision and compliance controls.”
