Bank of America and Deutsche Bank AG were among five banks sued over claims that traders conspired to manipulate the market in agency bonds, which is made up of an estimated $9 trillion of debt issued by government entities and institutions like the World Bank.
The suit, filed by the Boston Retirement System, a pension fund representing city workers, follows inquiries by the U.S. and U.K. into the market for the securities, known as supranational, sub-sovereign and agency bonds, or SSAs. The probes target alleged illegal collusion in international bank trading, after regulators reached billions of dollars in settlements over manipulation claims involving interest-rate benchmarks and currency markets.
The suit, filed Wednesday in Manhattan federal court, adds the threat of possible triple damages available under U.S. antitrust law for investors harmed by any illegal price-fixing. Also sued were Credit Agricole SA, Credit Suisse Group AG and Nomura Holdings Inc. or their units.
The SSA market is generally defined to include international development organizations, government-sponsored entities and some sovereign debt. Depending on the securities which are included, the market could range from $9 trillion to $15 trillion, according to data compiled by Bloomberg. The bonds generally have high credit ratings because many are backed by explicit or implicit guarantees.
The U.S. Justice Department is focusing on possible rigging of the market by London-based traders at different banks, people familiar with the matter said in December. The U.K.'s Financial Conduct Authority, which is aiding the Justice Department's efforts, is also conducting its own investigation, people familiar with the matter said in January.
Authorities from both nations are trying to determine whether traders coordinated with one another before deciding who would offer price quotes to potential buyers and sellers, according to the people. The period of trading under review is between 2011 and 2014, one of the people said.