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Company CitiGroup [Company Info]
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Date Issue Title
25th Jan 2005 Fraud Investigation Criminal probe on Citigroup deals

Report
Traders at US banking giant Citigroup are facing a criminal investigation in Germany over a controversial bond deal.

The deal saw the sale of 11bn euros ($14.4bn; 7.6bn) of government bonds in a few minutes on 2 August, with 4bn euros-worth then bought back later.

The move was widely criticised at the time, and now the German regulator has said it has found evidence of possible market manipulation.

Citigroup said it would continue to co-operate fully with the authorities.

"We are disappointed that the BaFin has referred to the prosecutor the question of whether action should be brought against individuals involved," Citigroup said.

If the traders are found guilty, they could face a five-year jail term or a fine, Reuters reported BaFin as saying.

However, under German criminal law, prosecutors cannot pursue Citigroup itself.

Germany's financial watchdog BaFin has now transferred the investigation to the public prosecutor.

"I can confirm that BaFin has passed through the case to the public prosecutor," a BaFin spokeswoman said.

"It is now a criminal investigation."

"We found clues of possible market manipulation," the spokeswoman said, which included signs of linked bond trading ahead of the main trades on 2 August.

"Germany's Securities Trading Act says that if BaFin finds such clues, it has to put the case in the hands of the prosecutor."

Regulatory investigations are still going on in France, the UK and elsewhere.

Some Citigroup operations elsewhere in the world came under regulatory criticism in 2004.

Its private banking operation in Japan was closed down by regulators in Tokyo after an "aggressive sales culture" led the bank to flout anti-money laundering rules.

Other Reports on CitiGroup
Date Issue Company Report
7th Aug 2008 Questionable Practice CitiGroup Citigroup reaches SEC settlement
10th May 2006 Other Issue CitiGroup Citibank overcharged customers in Japan
28th Jun 2005 Other Issue CitiGroup Citigroup fined 14m by UK watchdog
10th Jun 2005 Fraud Investigation CitiGroup Citigroup pays $2bn in Enron case
4th Oct 2004 Fraud Investigation CitiGroup South Korea to scrutinise Citigroup
17th Sep 2004 Questionable Practice CitiGroup Japan closes Citigroup branches
11th May 2004 Fraud Investigation CitiGroup Citigroup settles Worldcom claims
19th Jun 2003 Other Issue CitiGroup Citicorp Brokerage Executive Fired

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