UK Regulator Fines Four Banks $127m For Sharing Sensitive Information

The UK’s competition regulator has fined four banks due to their employees exchanging sensitive information about UK government bonds.

The Competition and Markets Authority (CMA) has fined Citi, HSBC, Morgan Stanley, and the Royal Bank of Canada (RBC) a total of £100 million ($126.5 million).

Citi has been fined £17.16 million, HSBC £23.4 million, Morgan Stanley £29.7 million, and RBC the largest penalty at £34.2 million. The banks have until April 22 to pay.

Each bank was fined after individual traders shared sensitive information relating to buying and selling gilts in private one-on-one Bloomberg chatrooms.

In May 2023, the watchdog found the four banks and Deutsche Bank had breached competition rules following an investigation that began in 2018.

The exchanges occurred at various times between 2009 and 2013, with the last instances in 2010 for HSBC, 2012 for Morgan Stanley, and 2013 for Citi and the Royal Bank of Canada.

Deutsche Bank employees were also involved in sharing sensitive information, but the bank avoided a financial penalty by reporting its participation to the CMA under the authority’s leniency policy.

Citi also applied for leniency during the investigation and received a 35% reduction in its fine as a result.

The CMA confirmed that since the investigation concluded, each bank has implemented "extensive"  compliance measures to prevent such behavior from occurring again.

Juliette Enser, executive director of competition enforcement at the CMA, said: “The fines imposed today reflect the CMA’s commitment to dealing with competition law breaches and deterring anti-competitive conduct. The fines would have been substantially higher had the banks not already taken unusually extensive steps to make sure that this doesn’t happen again.”