March 29, 2018 / 9:06 AM / a year ago

UPDATE 1-Japan regulator says Deutsche, Bank of America violated antitrust laws

(Adds comments from FTC and banks, details)

By Junko Fujita and Takahiko Wada

TOKYO, March 29 (Reuters) - Japanese regulators on Thursday said Bank of America Merrill Lynch and Deutsche Bank had violated antitrust laws in the alleged fixing of bond prices.

Japan’s Fair Trade Commission said it had found that London-based traders for the banks in 2012 had exchanged information and agreed prices on U.S.-dollar bonds issued by the European Investment Bank.

Tsuyoshi Okumura, a senior investigator for the FTC’s International Antitrust Investigation Bureau, said this violated Japan’s anti-monopoly laws because a Japanese bank, Bank of Tokyo Mitsubishi UFJ, was the purchaser of the bonds.

It’s the first time the FTC came up with such a finding against foreign banks for offences committed outside Japan, Okumura said.

“Fixing prices means competition was undermined and it could distort fair business practice,” he told a media briefing.

The FTC, however, said it would not take further action against the banks because the five-year statute of limitations had expired, and that it had judged the banks were taking steps to prevent future violations.

The banks could have been ordered to improve internal compliance or pay a fine if the violation had been determined earlier, Okumura said.

A Tokyo-based spokeswoman for Deutsche said the bank had already taken measures to prevent a recurrence. A Tokyo-based spokesman for Bank of Japan Merrill Lynch declined to comment.

Various banks were sued by U.S. investors for colluding to fix bond prices, which investors argued forced them to accept unfair prices on securities.

Last year, Deutsche Bank and Bank of America agreed to pay a combined $65.5 million to settle investor litigation accusing large banks of rigging the roughly $9 trillion market for U.S. government agency bonds. (Reporting by Junko Fujita and Takahiko Wada; Editing by Chris Gallagher and Sam Holmes)

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