Lawsuit: Wall Street Bankers Secretly Used Chat Rooms to Rig Treasury Bond Market

Wall Street banks secretly shared client information in online chat rooms in an effort to rig auctions in the $14 trillion U.S. Treasury market and pad their bottom lines, according to a class-action lawsuit filed Wednesday in a federal court in Manhattan. The filing expands on claims that emerged in July 2015 and triggered an investigation by the U.S. Justice Department, Securities and Exchange Commission, and several state and foreign regulators. It also reveals one of the original plaintiffs appears to be quietly cooperating with investigators. The suit, which names Morgan Stanley, Goldman Sachs, Deutsche Bank, BNP Paribas, the Royal Bank of Scotland, and UBS as plaintiffs, claims the banking giants worked together from 2007 to 2015 to manipulate the price of bonds and skimmed profits from clients while padding the banks’ profits, according to the pension funds and individual investors who filed the suit.