Mexican antitrust debt probe could cast net wide: official

MEXICO CITY (Reuters) - A new probe into Mexico’s nearly 100 billion peso per day ($5.3 billion) public debt market could scrutinize possible breaches of competition laws by intermediaries in trades dating back up to 10 years, a senior antitrust official said.

Cofece said this week that it started its biggest ever probe into public debt sales in late October amid signs of potential wrongdoing. It has not named any suspects.

Any debt instrument issued by the federal government, states or municipalities, the state IPAB bank protection agency, development banks or state companies could come under review, Carlos Mena, head of the investigative unit of the Federal Economic Competition Commission (Cofece), said in an interview on Thursday.

“Any financial institution that participates as a bidder could be involved in the inquiry,” Mena said by phone.

“What we’re trying to determine is if credit institutions, brokerages or investment companies stopped competing or eased competition by exchanging information or manipulating prices or market demand,” he added.

Both primary securities placements and transactions in secondary markets will be examined, Mena said.

Mexico's financial sector is led by global players such as U.S.-based Citigroup CN, Spain's BBVA BBVA.MC and Santander SAN.MC, British HSBC HSBA.L, as well as local Banorte GFNORTEO.MX. At least 30 brokerage houses as well as investment and pension funds also take part in trades.

People involved in monopolistic practices could face up to 10 years in prison and companies could be slapped with fines equal to up to 10 percent of their earnings, Cofece says.

Mena said the investigation could also lead to a lawsuit by the state if monopolistic practices are confirmed.

“It’s an important issue and we have to look at it very carefully,” he said.

Reporting by Noe Torres and Sheky Espejo; Editing by Bernard Orr