(November 30 – 16:05 ET) – Several U.S. investment banks are under investigation by the Department of Justice for possible anti-trust violations, The Industry Standard is reporting.

Merrill Lynch, Morgan Stanley and Goldman Sachs, are being examined by the DOJ for possible antitrust violations from their involvement in online bond-trading systems, says the Standard story. The big banks involved in these trading systems have allegedly received questionnaires from the DOJ looking for information about the workings of these bond-trading consortiums.

Merrill Lynch and Morgan Stanley have admitted the investigation is underway and say they are cooperating with the DOJ. Goldman Sachs has refused to comment.

The DOJ seems to be worried about the possibility of price-fixing in these markets. “If you increase transparency between buyers and buyers or sellers and sellers you reduce the fear factor, which is what induces competition – the fear you will be beaten out by the other guy,” says Joe Sims, antitrust partner at Jones, Day, Reavis & Pogue in Washington, D.C.
-IE Staff