Case 1:18-cv-02830-JPO Document 75 Filed 07/18/18 Page 1 of 103 UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK IN RE MEXICAN GOVERNMENT BONDS Master Docket No. 18-cv-02830 (JPO) ANTITRUST LITIGATION CLASS ACTION This Document Relates to: ALL ACTIONS CONSOLIDATED AMENDED CLASS ACTION COMPLAINT Case 1:18-cv-02830-JPO Document 75 Filed 07/18/18 Page 2 of 103 TABLE OF CONTENTS INTRODUCTION ........................................................................................................................................... 1 JURISDICTION AND VENUE ................................................................................................................... 3 A. Defendants Exploited the United States Market for MGBs. ........................................................ 5 B. Defendants Directed and Controlled their MGB Trading and Sales Businesses from the United States. ...................................................................................................................................... 12 PARTIES .......................................................................................................................................................... 20 A. Plaintiffs ............................................................................................................................................... 20 B. Defendants .......................................................................................................................................... 25 1. The Santander Defendants ............................................................................................................ 25 2. The BBVA Defendants .................................................................................................................. 27 3. The JPMorgan Defendants ............................................................................................................ 29 4. The HSBC Defendants .................................................................................................................. 30 5. The Barclays Defendants ............................................................................................................... 32 6. The Citi Defendants........................................................................................................................ 35 7. The Bank of America Defendants ................................................................................................ 36 8. The Deutsche Bank Defendants ................................................................................................... 37 9. The Credit Suisse Defendants ....................................................................................................... 38 10. The ING Defendants ..................................................................................................................... 40 11. “John Does” 1-10 ........................................................................................................................... 41 C. Defendants’ Dealer-Subsidiaries Sold MGBs in the United States as Agents for their Corporate Parents .............................................................................................................................. 42 1. Santander Investment Securities and Santander Investment Bolsa, Sociedad de Valores, S.A… ................................................................................................................................................. 42 2. BBVA Securities, Inc. ..................................................................................................................... 43 3. HSBC Securities (USA) Inc. .......................................................................................................... 44 4. Barclays Capital Inc. ........................................................................................................................ 46 5. Deutsche Bank Securities, Inc. ...................................................................................................... 49 6. ING Financial Markets LLC ......................................................................................................... 51 SUBSTANTIVE ALLEGATIONS ............................................................................................................. 52 I. Background ......................................................................................................................................... 52 A. The Mexican Government Bond Market ....................................................................................... 52 1. CETES .............................................................................................................................................. 54 2. BONOS ............................................................................................................................................ 56 3. UDIBONOS .................................................................................................................................... 58 i Case 1:18-cv-02830-JPO Document 75 Filed 07/18/18 Page 3 of 103 4. BONDES D .................................................................................................................................... 59 II. The Role of MGB Market Makers ................................................................................................... 60 III. Government Regulators Uncover Evidence of Collusion Among Defendants ....................... 62 A. The Admitted MGB Cartel ............................................................................................................... 62 B. Defendants’ Response to the Investigations .................................................................................. 65 IV. Economic Evidence Confirms that Defendants Conspired to Rig Bids and Fix Prices in the MGB Market ....................................................................................................................................... 66 A. Bid Dispersion Analysis Demonstrates that Defendants Rigged the MGB Auction .............. 66 B. Defendants Sold MGBs From the Auctions at Supra-Competitive Prices ............................... 72 C. Defendants Fixed Bid-Ask Spreads for MGBs ............................................................................. 75 V. The Structure of the MGB Market and the Close Relationships Among Defendants’ Traders Provided an Opportunity to Conspire ............................................................................................ 77 VI. Defendants Conspired to Fix Prices in Multiple Financial Markets during the Class Period . 80 A. Barclays ................................................................................................................................................ 80 B. Deutsche Bank .................................................................................................................................... 82 C. Bank of America ................................................................................................................................. 84 D. HSBC ................................................................................................................................................... 86 E. Citigroup .............................................................................................................................................. 86 F. JPMorgan ............................................................................................................................................. 87 G. Santander and BBVA ......................................................................................................................... 89 VII. Defendants’ Conspiracy Injured Plaintiffs .................................................................................... 89 CLASS ACTION ALLEGATIONS ............................................................................................................ 90 EQUITABLE TOLLING AND FRAUDULENT CONCEALMENT ............................................... 92 CLAIMS FOR RELIEF ................................................................................................................................. 93 FIRST CLAIM FOR RELIEF ...................................................................................................................... 93 SECOND CLAIM FOR RELIEF ................................................................................................................ 94 PRAYER FOR RELIEF ................................................................................................................................ 96 DEMAND FOR JURY TRIAL .................................................................................................................... 96 ii Case 1:18-cv-02830-JPO Document 75 Filed 07/18/18 Page 4 of 103 Plaintiffs Oklahoma Firefighters Pension Retirement System, Electrical Workers Pension Fund Local 103, I.B.E.W., Manhattan and Bronx Surface Transit Operating Authority Pension Plan, Metropolitan Transportation Authority Defined Benefit Pension Plan Master Trust, Boston Retirement System, Southeastern Pennsylvania Transportation Authority Pension Plan, Government Employees Retirement System of the Virgin Islands, and United Food and Commercial Workers Union and Participating Food Industry Employers Tri-State Pension Fund (collectively “Plaintiffs”) complain upon knowledge as to themselves