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Banks Win as U.S. Judge Dismisses Mexico Bond Rigging Lawsuit

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U.S. District Judge, Paul Oetken, in Manhattan dismissed a proposed class action lawsuit that was filed in 2017 against several banks, alleging that they tried to rig the Mexican government bonds market, per Reuters.

In May 2017, the Investigative Authority of the Mexican Federal Economic Competition Commission (“COFECE”) conducted an inquiry on several banks to find proof of a possible collusion to manipulate bond prices.

The authority first announced the investigation in April 2017. It wanted to find out if the banks, which bought notes from the government at auctions, colluded to suppress prices. It also planned to investigate whether the banks coordinated to reduce the price and raise yields for holders, leading to higher interest rates for the government and companies.

Notably, JPMorgan Chase & Co. (JPM - Free Report) , Bank of America Corp. (BAC - Free Report) , Citigroup (C - Free Report) , HSBC Holdings plc (HSBC - Free Report) and Barclays PLC (BCS - Free Report) are amongst the several banks that had been accused and hence had been under the focus of COFECE.

However, Oetken dismissed the lawsuit because according to him, the accusers were unable to directly link the defendants with a conspiracy.

In fact, he said that he has not yet been able to find any possible existence of an antitrust conspiracy. Nevertheless, he added that the plaintiffs are allowed to try to amend their complaint.

A lawyer for the plaintiffs said that they are evaluating the ruling.

Many finance companies across the globe have been facing increasing scrutiny for their business practices. Many of these firms paid billions of dollars as fines and compensation to settle lawsuits and probes.

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