UBS, Nomura Holdings fined $452 million as EU cracks down on bond cartel

UBS says impact could be $100 mn on quarter; may appeal

UBS Group AG and Nomura Holdings and UniCredit SpA were fined a total of 371 million euros ($452 million) by the European Union for colluding on euro government bond trading during the region’s sovereign debt crisis.

UBS was fined 172 million euros and Nomura will have to pay 129.6 million euros for a traders’ cartel that swapped commercially sensitive information from 2007 to 2011 when eurozone bond yields soared. UniCredit was fined 69 million euros. It was “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,” Marg­rethe Vestager, the EU’s antitrust chief said.

The EU has spent more than a decade probing how bank traders swapped information in chatrooms, leading to billions of euros in fines. At the same time it approved billions of euros in government support to keep many European lenders alive during the financial crisis.

Vestager’s criticism seems to be aimed at two banks that weren’t fined. A Royal Bank of Scotland Group Plc unit escaped a fine because it was the first to tell regulators. It received a U.K. bailout in 2008. Portigon AG, the successor bank to bailed-out and failed German lender WestLB, avoided a levy because it had no revenue last year.

UBS said the fine could hurt second-quarter results by as much as $100 million. It’s considering an appeal and has “taken appropriate action years ago to mitigate and improve processes,” it said.

Nomura said the fine “relates to historic behaviour” by two former employees “for an approximate 10-month period in 2011.”