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July 24, 2015 at 09:50 AM
Bank of America Corp., Goldman Sachs Group Inc. and JPMorgan Chase & Co. are among 22 financial companies accused of colluding to manipulate auctions of U.S. Treasury securities in a lawsuit filed by investors.
A pension fund for Boston public employees alleged the so-called primary dealers used electronic chatrooms and instant messages to inflate the prices of treasuries they sold to investors and to deflate the prices they paid for those treasuries at auction.
“As a result of defendants’ unlawful manipulation of the treasuries market, the prices of when-issued treasury securities were artificially high and the prices of treasury securities at auction were artificially low,” the fund said in a complaint filed Thursday in federal court in Manhattan. “This scheme maximized defendants’ profits at the expense of their customers and others in the market.”
The U.S. Justice Department has begun looking at possible collusion in the $12.7 trillion U.S. Treasury market after securing guilty pleas and $6 billion in fines from global banks in a similar investigation of currency rigging.
