German regulators have alerted prosecutors to possible illegal activity by Citigroup Inc., during a large bond trade last year.
German regulatory agency BaFin opened an investigation in October into an August transaction in which Citigroup Global Markets sold some 11.8 billion euros ($15.67 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 ($5.31 billion) in bonds at lower prices an hour later, according to an Associated Press report.
BaFin has now turned over evidence of possible market manipulation resulting from the trade to Frankfurt prosecutors, Sabine Reimer, a spokeswoman for the BaFin regulatory agency, told The Associated Press. “We have reason to suspect market manipulation took place in connection with Citigroup transactions last August,” Reimer said.
“We are disappointed that the BaFin has referred to the prosecutor the question of whether action should be brought against individuals involved in the … matter,” a statement released by Citigroup said.