Six major banks have agreed to pay $86.4 million to resolve a long-running antitrust lawsuit in Manhattan in which investors accused their Mexican banking affiliates of manipulating the market for Mexican government bonds.
The settlement involves Mexican affiliates of Bank of America, Banco Santander, BBVA, Citigroup, Deutsche Bank and HSBC. The agreement was filed late Friday in Manhattan federal court and would settle all remaining claims in the eight-year-old case, subject to approval by a judge.
The total amount recovered by investors would reach $107.1 million before legal fees. That figure includes $20.7 million in settlements reached in 2020 with Barclays and JPMorgan Chase.
The lawsuit was brought by investors, including several pension funds, who alleged that the banks had worked together to distort prices and allocations in the Mexican government bond market. According to the allegations, the conduct took place between January 1, 2006, and April 19, 2017.
Investors cited evidence such as chatroom transcripts in support of their claims. They accused the banks of coordinating their trading activities in ways that affected the prices of Mexican government securities. The allegations included suppressing the prices of bonds the banks were purchasing while raising the prices of bonds they were selling.
The banks have denied wrongdoing. They agreed to the settlement without admitting liability.
Under the proposed agreement, lawyers representing the investors could request as much as one-third of the settlement amount in legal fees. That would amount to approximately $28.8 million if the full fee request is approved.
The case is part of a broader series of lawsuits brought in Manhattan over the past decade involving allegations that major financial institutions coordinated to manipulate financial markets. The litigation has covered a wide range of assets and markets, including interest rates, U.S. Treasury securities, other bonds, foreign exchange and commodities.
The Mexican bond case has remained active for eight years, with the latest agreement aimed at resolving the claims that were still outstanding. A federal judge must approve the preliminary settlement before it can become final.
The allegations center on trading practices involving Mexican government debt, a market in which the banks’ local operations played an important role. Investors argued that coordinated behavior among the financial institutions harmed market participants by influencing the prices at which securities were bought and sold.
The settlement follows earlier agreements involving other major banks. Barclays and JPMorgan reached settlements totaling $20.7 million in 2020, which forms part of the $107.1 million combined recovery outlined in the latest filing.
The lawsuit adds to a long history of legal scrutiny surrounding the trading practices of large global banks. Regulators and investors have pursued cases involving allegations of coordination and market manipulation across several major financial markets. The Mexican government bond allegations represent one part of that wider wave of litigation.
While the latest agreement brings the remaining claims closer to a conclusion, it does not establish that the banks engaged in the conduct alleged by investors. The institutions continue to deny the accusations, and the settlement remains subject to judicial approval. The proposed $86.4 million payment by the six banks therefore represents a resolution of the investors’ remaining claims rather than an admission of wrongdoing. If approved, it will add to the settlements already reached in the case and bring the eight-year legal dispute closer to an end.
