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US Treasury eyes Deutsche Bank in auction probe

Tuesday, May 31, 2016 - 10:56
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Deutsche Bank AG has emerged as a focus of a probe into whether traders rigged auctions for US government debt, the New York Post reported, citing unidentified people familiar with the matter.

[HONG KONG] Deutsche Bank AG has emerged as a focus of a probe into whether traders rigged auctions for US government debt, the New York Post reported, citing unidentified people familiar with the matter.

No bank has been accused of wrongdoing, but investigators are narrowing their focus after requesting documents and communications from all of the 22 primary dealers in Treasuries, the newspaper reported. That group includes the biggest Wall Street banks and their counterparts in Europe and Asia, the Post said.

Deutsche Bank has not disclosed that it is under investigation for Treasury trading and a spokeswoman for the lender declined to comment, the paper reported.

US authorities have been gathering information from primary dealers, scrutinizing how firms handled communications and whether any traders sought to improperly tilt Treasury auctions in their favor, people familiar with the situation said last year. The broad inquiries also were said to encompass when- issued securities - instruments that are generally sold to investors to guarantee their ability to get their hands on a bond, bill or note once it's issued. Investor lawsuits claim banks artificially sought to inflate prices of those instruments, later profiting in auctions.

In a November filing, Goldman Sachs Group Inc.added the offering and auction of securities, as well as "when-issued trading," to a list of activities that regulators and other government bodies are investigating. It said it's cooperating with all investigations.

BLOOMBERG

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