New York

Antitrust in the Financial Sector: Hot Issues & Global Perspectives

Second edition of Antitrust in the Financial Sector conference co-organized by Concurrences, Morgan Lewis and Fordham University, with the support of Charles River Associates, Compass Lexecon. MLex and PaRR were the media sponsors.

OPENING KEYNOTE SPEECH

ANDREW FINCH

Endorsing the application of antitrust law to the financial sector, Mr. Andrew FINCH (Principal Deputy Assistant Attorney General Antitrust Division, US DOJ) offered his two-fold perspective as a former attorney in private practice who, for the past year, has been overseeing the criminal program of the DOJ. The Division has a significant recent enforcement record in the financial services industry. Awareness that financial services may be susceptible to antitrust crimes has developed in the past decade. As in other sectors, antitrust investigations in the financial sector may begin with one institution or individual seeking leniency. Mr. Finch detailed the main similarities and differences between investigations in the financial sector and investigations in other sectors. Similarities include the infringing conduct, such as price fixing or bid rigging, although there has been some recent discussion on the specific use of computer algorithms in the financial services sector. Mr. Finch noted that once an anticompetitive agreement has been detected, the means of implementation are irrelevant. Penalties for violations of the Shearman Act, i.e. fines and criminal sentences, are also similar across industries, as well as the types of defenses which are often put forward. The Division aims to examine each defendant’s arguments during the investigation to ensure just, appropriate and sound decisions. Some important differences are linked to the specificities of the financial services sector. The functioning and regulation of financial firms affect the way in which employees and representatives conduct their work. As banks tend to have more interaction and employees’ work conduct may be subject to more freedom and privacy, it may be more difficult to prevent as well as detect anticompetitive behavior. Antitrust penalties may also have specific collateral consequences in the financial sector, which the Division aims to anticipate. Finally, the rise of global commerce has expanded the scope of financial markets, which may now be global. Consequently, multi-jurisdictional investigations are developing. Mr. Finch pointed to the very effective coordination in several financial services investigations between the DOJ and a variety of U.S. and foreign authorities. All market actors should aim to understand the overlapping civil and criminal enforcement regimes, with cooperation being the key to smoother proceedings. To conclude, Mr. Finch commended antitrust compliance programs, as these are critical in the financial sector to prevent violations from occurring and to make sure that violations which occur are identified, reported and mediated. The DOJ has sought to introduce rewards for extraordinary compliance efforts of companies which cooperate in financial investigations, such as Barclay’s and BNP Paribas in the Foreign Exchange case, and is considering how to recognize pre-existing compliance programs when their effectiveness can be established.

Photos © Vincent Soyez

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Speakers

  • Morgan Lewis (London)
  • Morgan Lewis (New York)
  • The Brattle Group (New York)
  • US Department of Justice (Washington)
  • Office of the New York State Attorney General (Albany)
  • Wilson Sonsini Goodrich & Rosati (New York)
  • Compass Lexecon (Washington)
  • Morgan Lewis (Washington)
  • Boston University - Questrom School of Business
  • US Federal Trade Commission (FTC) (Washington DC)
  • A.T. Kearney

Testimonial