EC: Fines with regard to interest rate derivatives cartels

The EC has fined Barclays, Citgroup, Deutsche Bank, JPMorgan, RBS, RP Martin, SocGen and UBS a total of €1 712 468 000 for participating in illegal cartels in markets for financial derivatives covering the EEA. Four of these institutions were found to have participated in a cartel relating to interest rate derivatives denominated in the euro currency. Six of them were found to have participated in one or more bilateral cartels relating to interest rate derivatives denominated in yen. The euro cartel operated between September 2005 and May 2008. The settling parties are Barclays, Deutsche Bank, RBS and SocGen. It is noted that Barclays was not fined as it benefited from immunity under the EC’s 2006 Leniency Notice for revealing the existence of the cartel to the EC. The other banks received a reduction of their fines for their cooperation in the investigation under the EC’s leniency programme as well as a . further fine reduction of 10% for agreeing to settle the case with the EC. The press release notes that proceedings were opened against Crédit Agricole, HSBC and JPMorgan and the investigation will continue under the standard (non-settlement) cartel procedure. With regard to the yen cartel, collusion lasted between one and 10 months from 2007 to 2010. The entities involved in one or more of the infringements are Citigroup, Deutsche Bank, JPMorgan, RBS, RP Martin and UBS. UBS received full immunity under the EC’s 2006 Leniency Notice for revealing to the EC the existence of the infringements. Citigroup also benefited from full immunity for its participation in one bilateral infringement. For their cooperation with the investigation, the EC granted fine reductions to Citigroup, Deutsche Bank, RBS and RP Martin, under the EC’s leniency programme as well as a fine reduction of 10% for agreeing to settle the case. It is noted that the EC is currently investigating ICAP under the standard (non-settlement) cartel procedure. A statement by Joaquin Almunia describes the actions and concludes “antitrust enforcement therefore comes in complement to the action of financial regulators and authorities worldwide, including those that have sanctioned market abuses. Indeed, what is shocking about the LIBOR and EURIBOR scandals is not just the manipulation of benchmarks, but also the setting up of genuine cartels between a number of financial players …. Enforcing competition rules can help ensure that financial markets truly work at the service of the real economy, not the interests of a few”.