Citigroup Drawn into CFTC Probe, Investigating Global Rate-Swap Businesses

A new probe has been opened against Citigroup Inc., less than six months after reconciling allegations of derivatives market rigging – the latest investigation involves the US Commodity Futures Trading Commission (CFTC), relating in part to a 2015 antitrust lawsuit, per a Bloomberg report.

Don't miss your last chance to sign up for the FM London Summit. Register here!

Citigroup’s latest government probe emphasizes the group’s trading and clearing of interest-rate Swaps Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Read this Term business. The CFTC launched an investigation following a 2015 antitrust lawsuit that alleges many of the industry’s leading swap dealers had managed to effectively blocked fund managers from trading specific instruments on exchanges in a bid to preserve their profits.

The investigation is the latest string of probes to target lenders in the US and Europe – the sector had already been convulsed by a duality of scandals, including a wide range of LIBOR investigations and settlements, followed by the manipulation of foreign Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term (FX) rates. The resulting transgressions have collectively seen record fines totaling over $10 billion dolled out by leading banking institutions.

The latest disclosures however cast light on a new segment of bank’s operations, which supported the determination of the prices for a plethora of financial instruments. The investigation is not localized to Citigroup however, as the defendants in the 2015 complaint include Bank of America Corp., Citigroup, Goldman Sachs Group Inc., JPMorgan Chase & Co., UBS Group AG, Barclays Plc, Credit Suisse Group AG, and Deutsche Bank AG.