Seven Banks Said to Be Focus of Mexico Bond Collusion Probe

5/16/2017 Bloomberg

bank of americaMexican authorities have zeroed in on seven banks, including three from the U.S., as part of a widening investigation into price manipulation in the nation’s bond market, according to a person with knowledge of the matter.

Local units of Banco Santander SA, Banco Bilbao Vizcaya Argentaria SA, JPMorgan Chase & Co., HSBC Holdings Plc, Barclays Plc, Citigroup Inc. and Bank of America Corp. have become the focus of the probe, according to the person, who asked not to be identified because the information is private. None of the banks has been accused of wrongdoing.

The investigation, first made public April 19 in an attempt to attract informants, threatens to upend trading in Mexico’s $400 billion market for local bonds from government entities. At issue is whether players known as market makers, which buy the notes at auctions, colluded in order to suppress prices. The probe follows long-running cases over interest-rate rigging in the U.K. and after U.S. prosecutors in January charged workers from some of the world’s biggest banks with conspiring to coordinate trading of dollars and euros to manipulate prices.

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