BRUSSELS - The European Union has imposed a €26.6 million fine on Rabobank for participating in a cartel that colluded on euro-denominated and government-guaranteed bonds trading, a practice that occurred from 2006 to 2016. This decision comes as part of a broader effort by the EU to crack down on illegal financial market activities, particularly following the financial crisis triggered by the collapse of Lehman Brothers.
Deutsche Bank AG (NYSE:DB), which was also involved in the collusion, managed to avoid penalties by acting as an informant to the European Commission's executive arm. By revealing the existence of the cartel, Deutsche Bank qualified for immunity under the EU's leniency program and evaded a substantial sanction that could have reached nearly €156 million.
The collusion between Rabobank and Deutsche Bank was conducted through chat-rooms, where traders from both banks coordinated their trading strategies. This revelation marks yet another instance where major financial institutions have been penalized for market manipulation. In April and May of 2021, the EU levied billions of euros in fines against several banks for similar collusion involving US Dollar and European government bonds.
The European Commission has emphasized that entities harmed by the banks' actions have the right to seek damages through national courts. The fines and legal actions aim to restore trust in the financial markets by holding institutions accountable for their misconduct and deterring future violations.
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