LOS ANGELES -- Financial authorities are aghast over the latest near-death international financial collision. It involved a lightening-fast dumping earlier this month of nearly $14 billion in securities. The perpetrator was Citigroup, operating out of London.
In about two minutes, it flooded the European market with euro-zone government bonds, sending the price southward. Citigroup then began buying them back in huge gobs, realizing a complex but substantial profit in the end.
Furious over the ploy, the enforcement division of Britain's Financial Services Authority has launched a formal investigation. In a brusque statement, the FSA said its "key aims include maintaining efficient, orderly and clean financial markets. In the view of the FSA, achievement of that aim requires large players in financial markets to have regard for the likely consequences of their trading strategies."