The lawsuit, which is the Electrical Workers Pension Fund Local 103 I.B.E.W. et al v Bank of America NA et al, was first reported by Reuters.
According to the complaint, the banks profited by conspiring to widen the bid-asked spreads they quoted, which increased the prices that investors paid for bonds and lowered the prices at which they sold bonds.
The lawsuit complaint said the banks’ tactics were “strikingly similar” to those used in the foreign exchange market that resulted in banks being fined more than $10 billion to settle enforcement claims in multiple countries.
The proposed class-action complaint accuses the banks of violating federal antitrust law, and comes after the European Union’s (EU) antitrust authority accused eight banks in January of breaking EU antitrust rules by colluding to distort competition when acquiring and trading European government bonds. European government bonds are sovereign bonds issued in euros by the central governments of the eurozone member states.
The EU didn’t mention the banks by name in its Jan. 31 “statement of objections” about the alleged collusion, but said the offenses occurred between 2007 and 2012 as the banks’ traders exchanged commercially sensitive information and coordinated on trading strategies. [Source 2]
A statement of objections is a formal step in the European Commission’s (EC) investigations into suspected violations of EU antitrust rules. The EC informs the parties concerned in writing of the objections raised against them, and the parties can then reply in writing and request an oral hearing to present their case before representatives of the EC and national competition authorities.
If the EC concludes that there is sufficient evidence of an infringement, it can adopt a decision prohibiting the conduct and impose a fine of up to 10% of a company’s annual worldwide revenue.