Citigroup unit Citibanamex, Spain’s BBVA Bancomer, Britain’s Barclays, Switzerland’s Credit Suisse and Germany’s Deutsche Bank have been notified of the fines. Picture: SUPPLIED
Citigroup unit Citibanamex, Spain’s BBVA Bancomer, Britain’s Barclays, Switzerland’s Credit Suisse and Germany’s Deutsche Bank have been notified of the fines. Picture: SUPPLIED

Mexico City — Mexico’s securities regulator has fined top banks, traders and brokers for simulating bond trades to pump up volumes, according to a government document and source, in one of the country’s widest probes into the industry since the financial crisis.

Citigroup unit Citibanamex, Spain’s BBVA Bancomer, Britain’s Barclays, Switzerland’s Credit Suisse and Germany’s Deutsche Bank have been notified of the fines, according to the document.

The fines for the banks, eight traders and two brokers totalled more than $1m, according to a government source with direct knowledge of the matter. Those sanctioned can still appeal against the fines.

Citibanamex said in a statement it was aware of the fines and was evaluating whether to appeal. Barclays, Credit Suisse and Deutsche Bank declined to comment. BBVA Bancomer did not respond to a request for comment.

Over the last decade, regulators in the US, Britain and other markets have slapped banks with billions of dollars in fines for manipulating rates and currency markets.

No criminal charges

The probe by Mexico’s regulator CNBV did not find evidence of price manipulation, the source said. While simulating trades violates Mexico’s stock market law, the source said the regulator is not seeking any criminal charges.

The CNBV did not respond to a request for comment.

The probe discovered traders had pre-arranged trades through local brokers in order to boost the apparent volume of trades in government bonds, said the source, who was not authorised to speak to the media, and who requested anonymity.

It was not immediately clear what the banks would gain from manipulating trading volumes but to be market-makers in government bonds, banks need to meet minimum trading volumes.

The Mexican unit of Swiss broker Tradition and Mexican broker Enlace were also fined, according to the document. Tradition did not respond for a request for comment.

A spokesperson for Enlace said in a statement the broker had received a notification from the CNBV for one trade in 2013.

“We cannot give more details about it because it is an ongoing legal issue, but we consider that the imposition of the fine is improper, so we will be challenging it,” it said.

The CNBV launched its probe of government bond players in Mexico in 2017  after Mexican anti-trust regulator Cofece announced an investigation into possible price-rigging in the market for peso-denominated government debt.

Cofece has until 2019 to reveal the results of its investigation into the alleged price-rigging. 

Reuters