10 Global Banks Sued for Alleged Bond Market Rigging
Ten global banking giants, including Goldman Sachs, J.P. Morgan, Citigroup and Credit Suisse, face a lawsuit alleging corporate bond price rigging for over 14 years.
An investor group led by U.S. resident Isabel Litovich claimed that the 10 banks had overcharged investors on odd lot trades of less than $1 million, which represents 90 percent of all corporate bond trading and targets non-institutional investors.
According to a «Reuters» report citing an 81-page complaint, the banks had leveraged their position as underwriters of two-thirds of U.S. corporate bonds leading to odd lot trade spreads of 25-300 percent higher than round lot trades.
«No Reasonable Economic Justification»
The complaint underlined a profit motive that extended well beyond reason, adding that the odd lot spreads were even wider than those in foreign bond markets with lower volumes and liquidity.
«No reasonable economic justification explains the magnitude of the pricing disparity,» the complaint said.
The defendants include Bank of America, Barclays, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, J.P. Morgan, Morgan Stanely, Royal Bank of Scotland, Wells Fargo and their respective affiliates.
