Canada Regulator Says Has Power to Probe Libor ‘Cartel’
Canadian antitrust regulators are asserting their authority to investigate alleged interest-rate fixing by banks including JPMorgan Chase & Co. (JPM) and Royal Bank of Scotland Group Plc, saying the companies formed an “international cartel.”
The nation’s Competition Bureau asked a judge to quash a challenge to its jurisdiction by RBS, according to documents filed by the bureau this week in Ontario Superior Court. RBS obtained an “interim stay” in February on a court order compelling it to turn over records related to the case.
Canadian officials are examining whether firms conspired to affect prices on derivatives linked to the Yen London interbank offered rate, according to court documents filed in May 2011. Regulators in the U.S., Europe and Asia have also been probing the case.
To assist with the investigation, the bureau obtained a court order requiring the firms to provide documents such as a list of individuals responsible for making Yen Libor submissions and internal communications.
Such court orders “may be the only tool available to the commissioner to obtain evidence of an international cartel formed by foreign-based persons impacting the Canadian economy but where the records are held in a foreign jurisdiction, as is the situation in this inquiry,” Ann Salvatore, the Competition Bureau’s assistant deputy commissioner, said in a June 7 affidavit.
Antitrust regulators need the tools to investigate conduct abroad, given evidence that “international cartels are of a significant concern for the Canadian economy,” University of Toronto law professor Michael Trebilcock, who was hired by the bureau to study the case, said in a separate affidavit.
Pholida Phengsomphone, a spokeswoman for RBS, didn’t reply to a phone call and an e-mail seeking comment after normal business hours.
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