RBS Fined $42m for Loan Pricing Collaboration with Barclays
The Office of Fair Trading (OFT) in the UK fined the Royal Bank of Scotland (RBS) £28.59m ($42.6m) for disclosing future pricing information of loan products to Barclays Capital (BCS). The fine was reduced from £33.6m when RBS admitted to the breaching the competition law between October 2007 and March 2008 and agreeing to cooperate. The information concerned the pricing of loans to real estate firms for which RBS and Barclays are the main providers, among other corporate businesses. The OFT investigation found that individuals in the RBS Professional Practices Coverage Team disclosed generic and specific confidential future pricing information to their counterparts at Barclays through telephone conversations and at social and industry events. The OFT also found evidence that Barclays took the information into account when determining its own pricing. Barclays will not be fined for its involvement because it brought the matter to the attention of the OFT. Under the leniency policy, the first company to report its participation in an infringement could qualify for immunity from penalties. “This is a deeply regrettable and isolated case from nearly two years ago, involving only two members of staff, one of whom has left the Bank and one other who faces suspension and further investigation now the case has been settled," an RBS spokesperson told HousingWire. A spokesperson at OFT told HousingWire the details of the loans were not available but the companies involved “were quite large” and generated more than £25m in yearly profits. “Any company that discloses confidential future pricing information to its competitors risks a substantial penalty. It is important that companies operating in the UK understand the seriousness of such conduct and ensure effective competition compliance throughout their organization,” said Ali Nikpay, OFT senior director of cartels and criminal enforcement. The spokesperson for RBS added the bank has co-operated with the OFT throughout the investigation and introduced additional competition law training. Barclays did not immediately respond to an inquiry. Write to Jon Prior.