The General Court of the European Union issued a ruling that largely upheld the European Commission’s 2021 decision against seven global investment banks for operating a cartel in the European Government Bonds (EGB) market between 2007 and 2011.
The ruling reaffirms the Commission’s findings on collusion among traders and reinforces the principle that financial institutions are accountable for the anticompetitive conduct of their employees. While UBS’s €172.4 million fine was upheld, Nomura and UniCredit secured modest reductions in their penalties following successful challenges to specific aspects of the Commission’s fine calculations.
Core Allegations: Market Manipulation During Crisis
The Commission’s original decision found that traders from UBS, UniCredit, Nomura, Bank of America, Natixis, NatWest (formerly RBS), and WestLB (now Portigon) engaged in collusive behavior through multilateral chatrooms hosted on Bloomberg terminals. These traders shared sensitive pricing and bidding strategies related to EGB auctions and secondary market transactions. The conduct was particularly egregious as it occurred during the financial crisis, a period when several of the implicated institutions were supported by public funds.
According to Executive Vice-President Margrethe Vestager, responsible for competition policy, “It is unacceptable that in the middle of the financial crisis, when many financial institutions had to be rescued by public funding, these investment banks colluded in this market at the expense of EU Member States.”
The cartel activity spanned the entire European Economic Area and affected both primary market auctions—where government debt is first issued—and secondary markets—where bonds are subsequently traded among investors.
Court’s Findings: Responsibility and Sanctions Upheld
In its judgment, the General Court confirmed that the Commission correctly established a single and continuous infringement involving coordinated exchanges of commercially sensitive information and collusive behavior aimed at manipulating market dynamics. The court further emphasized that undertakings are liable for the conduct of their traders, irrespective of whether senior management was aware of the misconduct.
UBS, which had challenged the full €172.4 million fine, saw its appeal dismissed in full. The court upheld both the Commission’s factual findings and its methodological approach in calculating the fine, including considerations of the serious nature of the infringement and its broad geographic scope.
Nomura and UniCredit succeeded in securing slight reductions in their penalties:
- Nomura’s fine was reduced from €129.6 million to €125.6 million, due to the Commission’s failure to properly consider data provided by the bank during the investigation.
- UniCredit’s fine was reduced from €69.4 million to €65 million, as the court found the Commission had misstated the start date of the bank’s participation in the cartel by 17 days.
Other Parties and Procedural Aspects
While Bank of America and Natixis were found to have participated in the cartel, they were not fined due to the expiration of the limitation period under EU law. Portigon’s fine was effectively reduced to zero because the bank recorded no net turnover in its final business year, limiting the fine under EU rules. NatWest avoided any penalty altogether after securing full immunity by voluntarily disclosing the cartel to the Commission under the leniency programme.
All parties involved, as well as the Commission, retain the right to appeal the General Court’s ruling on points of law to the Court of Justice of the European Union, Europe’s highest judicial authority.
