HSBC to pay $30 million to settle bond rigging lawsuit in U.S.

HSBC Holdings Plc has agreed to pay $30 million to settle litigation by investors who accused 11 big banks of rigging the roughly $9 trillion government agency bond market from 2009 to 2015.

The settlement with the British bank was made public late Wednesday night in the federal court in Manhattan, and requires approval by U.S. District Judge Edgardo Ramos.

HSBC is the third bank to settle, after Deutsche Bank AG and Bank of America Corp agreed in August 2017 to pay a respective $48.5 million and $17 million and cooperate with the plaintiffs.

Investors led by two Alaska government entities and the Iron Workers Pension Plan of Western Pennsylvania accused banks of colluding to manipulate prices of U.S. dollar-denominated supranational, sub-sovereign and agency bonds.

They said the banks used chatrooms and other means to share price data and coordinate trading, effectively functioning as a single “super-desk,” to reduce competition and boost profit on “virtually every trade” at customers’ expense.

“Rare is an antitrust case like this one, where a large volume of ‘smoking gun’ evidence exists at the pleading stage,” they said in an amended complaint filed on Nov. 13.

HSBC denied liability, but settled to avoid more litigation that could prove “extraordinarily expensive and time-consuming,” according to its settlement agreement.

It also agreed to cooperate with the plaintiffs, including by providing evidence such as electronic chats among the banks.

A spokesman, Rob Sherman, declined additional comment on Thursday.

The remaining defendants include Barclays Plc, BNP Paribas SA, Citigroup Inc, Credit Agricole SA, Credit Suisse Group AG, Nomura Holdings Inc, Royal Bank of Canada and Toronto-Dominion Bank.

Ramos has yet to rule on their requests to dismiss the amended complaint.

He had dismissed an earlier version of the complaint last Aug. 24, but gave the investors another chance to prove their case.

The Manhattan federal court is home to a slew of private litigation accusing banks of conspiring to rig various financial markets, interest rate benchmarks and commodities.

The case is In re: SSA Bonds Antitrust Litigation, U.S. District Court, Southern District of New York, No. 16-03711.