Foreign Banks Subpoenaed Over Alleged Treasury Market Manipulation

Monday, May 1, 2017
By Paul Martin

by Tyler Durden
ZeroHedge.com
May 1, 2017

Federal prosecutors have subpoenaed several (foreign) banks as part of a criminal investigation into possible manipulation of the U.S. Treasuries market, according to people familiar with the matter.

U.S. authorities have been examining the U.S. Treasuries market for roughly two years. As Bloomberg reports, in November 2015, Goldman Sachs disclosed that U.S. authorities had sought information related to its trading of when-issued securities, which are among the least transparent instruments in the world’s largest debt market.

And now, the Justice Department issued subpoenas last month to banks including UBS, BNP Paribas, and the Royal Bank of Scotland seeking information on the $14 trillion market, said two people, who asked not to be named because the investigation is confidential. Read more here…

As a reminder, ‘When-issued’ securities have been a government-debt market fixture since the U.S. Treasury Department effectively authorized their use in 1975. Investors can buy them from a Wall Street bond dealer to guarantee they will be able to get their hands on a bond, bill or note once it’s auctioned by the government. When-issued securities act as placeholders for bills, notes or bonds before they’re auctioned. The instruments change hands over the counter, with lifespans of just days. There’s scant public information on trading volumes or the market’s biggest players.

The Rest…HERE

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