Five major banks breached competition laws by sharing "sensitive" information on UK government bond trading in online chats beginning more than a decade ago, Britain's financial regulator said Wednesday.
Citi, Deutsche Bank, HSBC, Morgan Stanley and Royal Bank of Canada "each unlawfully shared competitively sensitive information... in one or more series of one-to-one conversations in chatrooms", the Competition and Markets Authority (CMA) said in provisional findings.
The alleged behaviour took place at various times from 2009 to 2013 via Bloomberg online forums, between a "small number" of traders, it added.
The CMA may issue fines if it concludes that two or more lenders engaged in anti-competitive activity.
"The information exchanges... related to the buying and selling of UK government bonds," the watchdog added.
"This included details on pricing and other aspects of their trading strategies."
The alleged actions deprived the benefits of competition for pension funds, the UK Debt Management Office -- and ultimately the government and taxpayers.
The CMA said Deutsche Bank had alerted the regulator to its participation in alleged unlawful behaviour and will not face a fine.
Citi admitted its involvement in anti-competitive activity, and has also entered into a settlement agreement. As a result, any fine it receives will be discounted.
The CMA added that HSBC, Morgan Stanley and Royal Bank of Canada have not admitted any wrongdoing.
"We have co-operated fully with the CMA on this matter and are pleased to put it behind us," Citi said in a separate statement.
Morgan Stanley noted it has "cooperated fully" with the watchdog but added that "we disagree with the CMA's provisional allegations and intend to contest them".
HSBC said it "refutes the CMA's allegations" and will "continue to make our case... whilst we await a final decision" from the inquiry.