Collusion

Collusion is an agreement between two or more parties to defraud, deceive, or gain an unfair advantage over another party. In the context of finance, collusion can take many forms, such as price-fixing, bid-rigging, or market manipulation.

Price-fixing occurs when two or more businesses agree to set the same price for a product or service. This can artificially inflate prices and harm consumers. Bid-rigging occurs when two or more businesses agree to submit artificially low bids for a contract. This can prevent the most qualified businesses from winning the contract and can drive up costs for the government or other entity that is awarding the contract. Market manipulation occurs when two or more businesses work together to artificially inflate or deflate the price of a security. This can mislead investors and cause them to lose money.

Collusion is a serious crime and can result in significant fines and penalties. In the United States, collusion is prohibited by the Sherman Antitrust Act of 1890. The Act makes it illegal for any person or entity to conspire to restrain trade or monopolize any part of the market.

The U.S. Department of Justice (DOJ) is the federal agency responsible for enforcing the Sherman Antitrust Act. The DOJ has a number of tools at its disposal to combat collusion, including criminal prosecution, civil lawsuits, and administrative orders.

The DOJ has successfully prosecuted a number of collusion cases in recent years. In 2015, the DOJ fined 10 major banks a total of $5.8 billion for conspiring to fix the prices of interest rate swaps. In 2016, the DOJ fined 14 major airlines a total of $1.7 billion for conspiring to fix the prices of airfares.

Collusion is a serious crime that can have a significant impact on the economy. The DOJ is committed to enforcing the Sherman Antitrust Act and prosecuting collusion cases.

In addition to the criminal penalties that can be imposed for collusion, companies that engage in collusion may also face civil liability. In a civil lawsuit, a plaintiff can sue a defendant for damages caused by the defendant's collusion. The plaintiff can also seek an injunction to prevent the defendant from continuing to engage in collusion.

The damages that can be awarded in a civil lawsuit for collusion can be significant. In a recent case, a class of consumers who were injured by a price-fixing conspiracy was awarded $10 billion in damages.

The potential for civil liability can be a powerful deterrent to collusion. Companies that are considering engaging in collusion should be aware of the risks involved.

Collusion is a serious crime that can have a significant impact on the economy. The DOJ is committed to enforcing the Sherman Antitrust Act and prosecuting collusion cases. Companies that engage in collusion may face criminal and civil penalties.