By Abhinav Ramnarayan

LONDON, May 19 (IFR) - At least four more law firms may be lining up to sue a group of five banks for alleged collusion in bond trading, following a lawsuit brought by a US pension fund this week.

Boston Retirement System filed the lawsuit against Bank of America Merrill Lynch, Credit Agricole, Credit Suisse, Deutsche Bank and Nomura for alleged collusive activities to fix the prices of the US$9trn sovereign, supranational and agency bonds

The action is being brought on behalf of Boston Retirement itself and "all others similarly situated", according to the lawsuit's documentation.

The lawsuit also names as defendants individual traders Hiren Gudka, Amandeep Singh Manku, Shailen Pau and Bhardeep Singh Heer, all of whom are or were employed by the banks in question in London.

The action comes at a time when the traders and banks in question are already under investigation by the US Department of Justice for potential collusion, as IFR reported exclusively in January this year

It has since emerged that the matter was also being investigated by the FCA in the UK and the European Commission.

LINING UP

The action, filed with the US District Court for the Southern District of New York, may be only the first of many class action lawsuits to be brought against those parties, according to one person with knowledge of the matter.

"A number of firms have been considering bringing a class action lawsuit against these banks and traders but my sense is that no one else could figure out a credible theory of what the market-wide collusion entailed," the person told IFR.

"[The law firms representing Boston Retirement System have] filed a case anyway, perhaps to try and obtain the advantage of being the first to file the case."

Labaton Sucharow and Hausfeld are the counsel for Boston Retirement System and the proposed class action. They were not immediately available for comment.

If there are a number of lawsuits, the court will appoint one of the law firms involved as lead lawyers. As a result, this first suit may trigger others, he said.

"People will worry that if they stay on the sidelines, these firms will get to run the case," said the person.

EXPERT ADVICE

There is very little in the way of information on what the alleged wrongdoing is that is being investigated by the DOJ and its British and European counterparts.

According to the lawsuit, Boston Retirement System is suing on the basis of independent research on bid-ask spread data for SSA bonds and on the fact that there is an investigation into those banks and traders.

Experts hired by the plaintiff found "anomalous intraday movements of between 2 and 4 basis points in the bid-ask spreads for certain SSA bonds", which support the inference of conspiracy among the defendants, the lawsuit says.

"Defendants have inflated the prices at which they sold SSA bonds to investors and reduced the prices at which they purchased these products from investors, including plaintiff and members of the class," the lawsuit says.

"Thousands of US-based investors have purchased and sold billions of dollars' worth of SSA bonds directly from the defendants," the suit adds.

INVESTIGATION

As IFR reported exclusively in January, the DOJ (along with the FCA and the European Commission) is investigating allegations that the SSA traders named in the lawsuit agreed prices and shared information on certain US dollar bonds in chatrooms they established for the purpose.

The bonds were issued by sovereigns, agency borrowers such as German state-backed development bank KfW and supranationals including the European Investment Bank.

The US DOJ is looking into whether any of the discussions in those chatrooms amounted to manipulation of market prices, sources told IFR.

Bank of America Merrill Lynch, Credit Suisse, Deutsche Bank and Nomura declined to comment. Credit Agricole did not immediately respond to requests for comment.

(Reporting by Abhinav Ramnarayan, Editing by Matthew Davies)