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Urge your fund managers and mining company executives to attend Gold Rush 21
By Pivi Munter, Patrick Jenkins,
Thibaut Madelin, and Leslie Crawford
Financial Times, London
Tuesday, January 4, 2005
http://news.ft.com/cms/s/45dbc328-6e3b-11d9-a60a-00000e2511c8.html
BaFin, Germany's financial markets regulator, yesterday
said it had found evidence that Citigroup traders
manipulated the German government bond futures market
in August. It said it had asked prosecutors to launch a
criminal investigation into the case.
"There is concrete evidence that they attempted to push
up the price [of the bonds] artificially and then take
advantage of that," an official at the market regulator said.
A "handful" of traders is understood to be implicated,
though BaFin refused to name individuals. The prosecutor's
office in Frankfurt will determine whether to file criminal
charges against individual Citigroup employees involved in
a series of trades, which earned the bank profits of an
estimated 17 million euros ($22 million).
Citigroup disrupted the eurozone bond market and angered
the region's governments by selling 11 billion euros of cash
bonds in less than two minutes, only to buy 4 billion euros
of the paper back at lower prices soon after. The transactions
clogged the market and created uncertainty about prices,
forcing EuroMTS, the UK-based operator of Europe's trading
platform for cash bonds, to curtail liquidity.
The scale of Citigroup's trades, which spanned about 200
securities across the eurozone, has prompted parallel
investigations in several European Union countries, led by
BaFin and the Financial Services Authority of the UK.
Yesterday the FSA declined to comment.
The liquidity hiccups prompted by Citigroup's trades
alarmed the eurozone's 11 issuer governments, which
have striven to create more actively traded debt securities
since the euro's launch in 1999.
In addition to cash bonds on EuroMTS, the trades also
involved the use of German Bund futures, which are traded
on the Frankfurt-based Eurex exchange and regulated by
BaFin.
Eurozone cash bonds are priced against the benchmark
of the far more liquid Bund futures, making Eurex the
most important trading venue for eurozone government debt.
At the time, bond traders said an unexplained rise in the
Bund futures contract on a quiet Monday morning slightly
before Citigroup's sweeping cash trades had roused
suspicions of market abuse. A sudden rise in the Eurex
prices could have created a false expectation of a big buy
order on the cash market. Instead, Citigroup flooded the
market with sell orders.
The Citigroup investigation represents an important test
case in Germany, which adopted a new law on investor
protection in 2002, bringing its legislation on market
manipulation into line with the rest of the European Union.
According to an EU directive, market manipulation can,
among other things, involve transactions or orders to trade
that give misleading signals about the demand for or
supply of financial instruments.
Citigroup apologised in September for the controversial
trade, conceding its employees had not considered its
impact on the market. It was unavailable for comment
yesterday.
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http://www.goldismoney.info/index.html
http://www.minersmanual.com/minernews.html
http://www.a1-guide-to-gold-investments.com/euro-vs-dollar.html
http://www.investmentrarities.com
http://www.kereport.com
(Korelin Business Report -- audio)
http://www.plata.com.mx/plata/home.htm
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http://www.resourceinvestor.com
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http://www.interventionalanalysis.com
http://www.investmentindicators.com/
Eagle Ranch discussion site:
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Ted Butler silver commentary archive:
http://www.investmentrarities.com/
----------------------------------------------------
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The Moneychanger
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1-888-218-9226, 931-766-6066
----------------------------------------------------
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