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Gold miners will keep cutting hedges, if not as fast, analysts say
.... No, the firm's policy is not to create
incriminating evidence and not to get caught.
* * *
By The Associated Press
Tuesday, February 1, 2005
http://biz.yahoo.com/ap/050201/germany_citibank_2.html
BERLIN -- An internal memo from banking conglomerate
Citibank discussing strategies for squeezing out smaller
European bond market dealers does not reflect official
policy, the bank said Tuesday.
German prosecutors were already considering whether to
launch a formal investigation into suspicions of market
manipulation over bond trades by Citigroup Inc., the
world's largest financial institution.
The Financial Times reported that the memo, sent within
the bank's European government bond trading desk, also
discussed using liquidity differences between the futures
market and the cash market to set profitable trades.
"As this is the subject of regulatory inquiry, we are
unable to comment other than to say that this memo is
filled with inappropriate and unrealistic statements," the
bank said in a statement, Dow Jones Newswires reported.
"It was not seen by, nor does it represent the views of, the
supervisors who approved the trade, nor of the firm."
Prosecutors said last week that they had received a
complaint from regulators against six Citigroup
employees and were considering a formal inquiry.
Regulators say they suspect possible illegal activity
during a large bond trade on Aug. 2 last year.
According to prosecutors, Citigroup Global Markets
sold some 11.8 billion euros ($15.4 billion) in European
government bonds on 13 different trading platforms in
11 different markets, causing prices to fall across the
board. The bank then bought back roughly 4 billion
euros ($5.22 billion) in bonds at lower prices.
The bank allegedly made a profit of $17.5 million
(13.4 million euros) on the trade, prosecutors said.
Germany's BaFin regulatory agency opened an
investigation in October into the transaction.
Citigroup CEO Charles Prince told The Wall Street
Journal in October that the trading by the company's
London desk wasn't illegal "as far as we can tell."
But he called the trade "a completely knuckleheaded
thing to do," the Journal reported.
Citigroup said last week that it will cooperate with
regulatory authorities. Its shares rose 44 cents to
$49.52 in trading Tuesday on the New York Stock
Exchange.
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