Collusion prosecutions loom for 17 big banks
The Competition Commission yesterday referred a collusion case against 17 major banks to the Competition Tribunal for prosecution.
The banks include Absa, Investec and Standard Bank.
The commission said this followed an investigation into price-fixing and market allocation in the trading of foreign currency pairs involving the rand since April 2015.
The banks involved are: Bank of America Merrill Lynch International Limited; BNP Paribas; JP Morgan Chase and Co; JP Mor- gan Chase Bank NA; Investec Ltd; Standard New York Securities Inc; HSBC Bank Plc; Standard Chartered Bank; Credit Suisse Group; Standard Bank of South Africa Ltd; Commerzbank AG; Australia and New Zealand Banking Group Limited; Nomura International Plc; Macquarie Bank Limited; Absa Bank Limited; Barclays Capital Inc; and Barclays Bank Plc.
The commission found that from at least 2007, the banks had a general agreement to collude on prices for bids, offers and bid-offer spreads for spot trades in relation to currency trading involving US dollar/rand pairs.
The commission also found the banks manipulated the price of bids and offers through agreements to refrain from trading and creating fictitious bids and offers at particular times. It said the banks traders primarily used platforms such as the Reuters currency trading platform to carry out their collusive activities. They also used Bloomberg instant messaging system, or chatroom; telephone conversations; and had meetings to coordinate their collusive trading activities.
They assisted each other to reach the desired prices by coordinating trading times. They reached agreements to refrain from trading, taking turns in transacting and by either pulling or holding trading activities on the Reuters platform. They also created fictitious bids and offers, distorting demand and supply to achieve their profit motives.
The commission is seeking an order from the tribunal declaring the respondents have contravened the Competition Act and an order declaring the banks are liable for a penalty equal to 10% of their annual turnover.