Japan watchdog seeks $1.2 mn fine against Citigroup on bond manipulation

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Japan watchdog seeks $1.2 mn fine against Citigroup on bond manipulation

Japanese SESC market watchdog told on Tuesday, the 26th of March 2019, that they had recommended a financial penalty of $.12 million against the British unit of Citigroup Inc. for alleged Japanese government bond (JGB) price manipulation.

The incident had been the recent counterblast of Japanese authorities over price manipulation in JGB futures market. According to SESC, an employer of the UK-based Citigroup global market had made both buy and sell orders for 10-year JGB futures without any intention to execute in a near-term outlook.

Following a probe on the issue, the Japanese SESC had recommended a fine of 133 million Japanese Yen, while the Citigroup had been quoted saying that the financial institution had taken the recommendation seriously. Addressing to maintaining compliance with financial regulations and directives, in a statement Citigroup Inc.

said, “Citi will place the utmost priority on further enhancing governance and internal control to comply with the financial regulations and directives”. Never the less, the Japanese SESC does not hold the authoritative power to issue fine, and it could only recommend financial penalties and conduct investigations.

Financial penalties in Japan are usually handled by the Financial Service Agency Regulator. Last July, there had been a similar incident on JGB manipulation, which SESC had caught red-handed and the financial regulators had smacked a fine of 218 million yen on a joint venture of Mitsubishi UFJ Financial Group, alongside Morgan Stanley over manipulating bond future prices.