US probing possible rigging in agency bond market, say sources

Washington

THE US Justice Department is examining possible manipulation in the trading of agency bonds - US$9 trillion or more in debt issued by the likes of German states, government entities and the World Bank - according to three people familiar with the matter.

The inquiry into the market for supranational, sub-sovereign and agency bonds, or SSAs, is gathering momentum as the US investigates whether traders violated fraud statutes or antitrust laws that prohibit collusion, said the people, who asked not to be named because details of the investigation aren't public.