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Central bankers manipulate currency markets, and gold and silver are currencies
8:25p ET Monday, March 21, 2005
Dear Friend of GATA and Gold:
The news report appended here about Citigroup's
avoidance of criminal charges in Germany for its
euro bond market manipulation last August evokes
the dictum of the great American journalist
Charles Peters, editor emeritus of The Washington
Monthly.
The big scandal, Peters remarked, is seldom what
is illegal but what is perfectly legal.
And as the news report here explains, Citigroup's
market manipulation has prompted Germany to outlaw
any repetition.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
* * *
German Prosecutors Won't Probe Citigroup
By The Associated Press
Monday, March 21, 2005
http://biz.yahoo.com/ap/050321/germany_citigroup_7.html
BERLIN -- German prosecutors said Monday they won't launch a formal
investigation into bond trades last year by employees of Citigroup
Inc., citing a lack of evidence of criminal wrongdoing.
Prosecutors in Frankfurt said they were unable to find sufficient
evidence that a transaction worth billions of euros violated laws
against market manipulation.
"Like in cases of fraud, there must be evidence of deception in
order to press charges," the prosecutors said.
Citigroup, the largest U.S. financial institution, said it was
pleased with prosecutors' decision, and would continue to cooperate
with authorities regarding the transaction.
"As we have stated previously, we regret this trade because it did
not meet our standards," the New York-based bank said. "We are
committed to cooperating fully with all authorities to resolve this
matter."
The Frankfurt prosecutors' decision does not affect an ongoing
investigation by German market regulator BaFin, which was launched
last October. BaFin has worked closely with other European financial
market regulators including Britain's Financial Services Authority.
BaFin has said Citigroup sold some 11.8 billion euros ($15.4
billion) in European government bonds on 13 different trading
platforms in 11 different markets last Aug. 2, 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.
In early February, Citigroup said it placed four dealers on paid
leave pending investigation of the trade and accused the traders
of "inappropriate, unrealistic, and, in certain instances, juvenile
remarks about the trading strategy before it was executed."
Prosecutors said they had no evidence that traders attempted to
alter the price in such a way that only they would profit from it.
Nevertheless, under a law passed at the end of October, such a
transaction would be considered illegal, prosecutors said.
Citigroup shares fell $1.09, or 2.3 percent, to close at $45.76 in
Monday trading on the New York Stock Exchange. Its shares have
traded in a 52-week range of $42.10 to $52.88.
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----------------------------------------------------
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