Zacks Investment Research | Feb 15, 2019 07:16AM ET
The Royal Bank of Scotland (LON:RBS) (NYSE:RBS) has been identified as one of the eight banks being investigated by the European Commission for involvement in a euro bond trading cartel. The news was first reported by Bloomberg.
In January 2019, the European regulator announced a probe alleging traders of colluding to acquire and trade sovereign bonds issued by eurozone governments to mislead competition, between 2007 and 2012.
The regulator said that some traders used online chatrooms to exchange commercially sensitive information and coordinated trading strategies on the euro-denominated bonds.
Also, the Commission added that its charges did not imply that anti-competitive conduct was a general practice in the euro zone government bond sector.
While there is no legal deadline for the regulator to complete the probe, the duration depends on a number of factors, including cooperation of concerned parties. Further, the Commission can impose fines of up to 10% of a company's annual worldwide turnover.
Previously, in December 2018, antitrust regulators accused Deutsche Bank (NYSE:DB) , Credit Agricole (OTC:CRARY) and Credit Suisse (NYSE:CS) of being involved in a similar bond trading cartel for a period of about seven years (2009-2015). One more global bank was said to be under suspicion.
The banks were charged of rigging prices of U.S. dollar-denominated government bonds by exchanging “commercially sensitive information and coordinated on prices”, mainly through online chatrooms.
Our Viewpoint
Notably, RBS is on the road to recovery. Also, resumption of dividend payment and special dividend announcement reflect its improving financial position, and is expected to act as a tailwind. However, heightened competition, volatility in the global economy and litigation costs are some major concerns surrounding the company’s growth.
Shares of RBS have gained 1.2% over the past six months against 1.1% decline recorded by the industry it belongs to.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here .
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, wouldn't you like to know about our 10 finest buy-and-holds for the year?
From more than 4,000 companies covered by the Zacks Rank, these 10 were picked by a process that consistently beats the market. Even during 2018 while the market dropped -5.2%, our Top 10s were up well into double-digits. And during bullish 2012 – 2017, they soared far above the market's +126.3%, reaching +181.9%.
This year, the portfolio features a player that thrives on volatility, an AI comer, and a dynamic tech company that helps doctors deliver better patient outcomes at lower costs.
Zacks Investment Research
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.