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HSBC to pay $30M to settle government bond market rigging suit

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HSBC to pay $30M to settle government bond market rigging suit

HSBC Holdings PLC agreed to pay $30 million to settle a lawsuit alleging that it rigged the government agency bond market, Reuters reported.

The settlement requires approval from U.S. District Judge for the Southern District of New York Edgardo Ramos, according to Reuters, which added that HSBC denied all liability, but settled in order to avoid further expensive litigation.

The Boston Retirement System on May 18, 2016, filed a class-action lawsuit in the Southern District of New York alleging that the defendants, who were the largest dealers in the supranational, sub-sovereign and agency bond market, colluded with each other to fix the prices of the bonds in the secondary market.

The plaintiffs accused the defendants of forcing investors to pay a higher price to purchase bonds and lowering the price at which they sold the bonds, and using electronic means to communicate their collusion and exchange confidential information about customers' identities and trading habits, according to the lawsuit.

The original bank defendants in the suit were Bank of America NA, Bank of America Merrill Lynch International Ltd., Crédit Agricole Corporate & Investment Bank, Credit Suisse Group AG, Deutsche Bank AG and Nomura International PLC, with additional banks including HSBC added as the case progressed.