BERLIN, Feb. 1 (UPI) -- Two weeks before Citigroup launched questionable European bond trades, now being investigated, an internal memo specified how to profit from such moves.
Last August the U.S. company abruptly sold $14.3 billion in eurozone cash bonds in less than 2 minutes, slamming the price down so sharply that when, minutes later, it bought back $5.2 billion of those bonds, the giant bank had pocketed a $22 million profit, the Financial Times said Tuesday.
Two weeks earlier, Simon Wivell of Citigroup's European government bond trading desk in London wrote a memo to a colleague describing how to pull off just such a maneuver.
The July 20 memo described how Citigroup wanted to "turn the European government bond market into one that more closely resembles" the less transparent U.S. Treasury bond market, dominated by a much smaller number of investment banks.
"Over time, this may help to kill off some of the smaller dealers," the memo says.
British and German authorities are investigating the August trades, and German investigators vowed to raise the memo with Citigroup, which refused to comment on it.
