European Union (EU) antitrust regulators unexpectedly inspected Deutsche Börse due to suspicions that the company might be implicated in a cartel concerning financial derivatives. According to a representative from the company, the surprise inspection took place on Monday, with Deutsche Börse fully cooperating with the investigation.
The European Commission declared that these inspections were executed across two EU countries and the implicated firms could have infringed upon EU antitrust laws prohibiting limiting business operations. However, officials lacked further elaboration on the matter.
These so-called ‘dawn raids’ may lead to potential penalties equating to 10% of the companies’ worldwide sales, although such hefty fines are rarely imposed. The antitrust division of the EU also emphasised that the companies, while under scrutiny, haven’t been found guilty of any misdeeds thus far. There isn’t a specific legal timeline for the closure of the commission’s inquiry.
This surprise inspection can be seen as the most recent in a series of EU investigations over the past decade directed towards the finance industry and main benchmarks. These investigations include the distortion of pricing elements for derivatives through traders exchanging information in chat rooms, as well as the manipulation of bonds denominated in euros and state-backed securities.
These investigations were carried out after EU gave the green light for government aid to preserve several European banks during the financial crisis, following the collapse of Lehman Brothers Holdings in 2008.