Citigroup Inc faces a ￥133 million (US$1.2 million) fine for allegedly manipulating prices in the Japanese government bond (JGB) futures market, its latest regulatory setback in Asia.
Japan’s securities watchdog said Citigroup in October last year placed orders for JGB futures contracts at the Osaka Exchange without intending to execute them, a practice known as spoofing.
The Japanese Securities and Exchange Surveillance Commission recommended that the Japanese Financial Services Agency impose the fine on Citigroup Global Markets Ltd.
The allegation put another spotlight on Citigroup’s trading in markets in Asia, where it has a major presence.
In Hong Kong, the US bank ousted eight equities traders following an investigation into whether staff properly disclosed the bank’s financial interest when facilitating stock trades, people familiar with the matter said last week.
An employee of London-based Citigroup Global Markets placed large buy and sell orders outside of Japan trading hours that were not executed, misleading other investors into believing that the 10-year JGB futures market was “thriving,” the commission said in a statement yesterday.
The watchdog reports to the agency, which usually carries out its recommendations.
APOLOGY
“Citi takes the recommendation seriously and apologizes for any inconvenience or concern the conduct that gave rise to today’s recommendation may have caused,” the New York-based company said in a statement.
It pledged to enhance governance and internal controls.
The accusation bears similarities to a case involving Mitsubishi UFJ Financial Group Inc’s joint venture with Morgan Stanley, which was found to have manipulated JGB futures prices last year.
As well as receiving a ￥218 million fine from the agency, Mitsubishi UFJ Morgan Stanley Securities Co was suspended from a key group of JGB dealers and dropped from managing several bond sales, hurting its reputation and fee income.
Citigroup is ranked 13th among underwriters of Japanese corporate bonds for the fiscal year ending on Sunday, data compiled by Bloomberg show.
Local unit Citigroup Global Markets Japan Inc is among 21 primary dealers in the JGB market that participate in bond auctions and exchange information with Japanese Ministry of Finance officials, according to the ministry’s Web site.
The Wall Street firm had another regulatory setback in Asia.
In India, it decided against seeking a new term for local chief Pramit Jhaveri after the central bank signaled that it would not approve an extension, Bloomberg reported last month.
The Reserve Bank of India’s decision stemmed from personal investments by Jhaveri, a person with knowledge of the matter said.
In the US, Citigroup was fined US$25 million in 2017 after regulators found that five of its traders manipulated the US Treasury futures market more than 2,500 times.
The fine was the biggest spoofing settlement on record at the time.
TECH RACE: The Chinese firm showed off its new Mate XT hours after the latest iPhone launch, but its price tag and limited supply could be drawbacks China’s Huawei Technologies Co (華為) yesterday unveiled the world’s first tri-foldable phone, as it seeks to expand its lead in the world’s biggest smartphone market and steal the spotlight from Apple Inc hours after it debuted a new iPhone. The Chinese tech giant showed off its new Mate XT, which users can fold three ways like an accordion screen door, during a launch ceremony in Shenzhen. The Mate XT comes in red and black and has a 10.2-inch display screen. At 3.6mm thick, it is the world’s slimmest foldable smartphone, Huawei said. The company’s Web site showed that it has garnered more than
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
Vanguard International Semiconductor Corp (世界先進) and Episil Technologies Inc (漢磊) yesterday announced plans to jointly build an 8-inch fab to produce silicon carbide (SiC) chips through an equity acquisition deal. SiC chips offer higher efficiency and lower energy loss than pure silicon chips, and they are able to operate at higher temperatures. They have become crucial to the development of electric vehicles, artificial intelligence data centers, green energy storage and industrial devices. Vanguard, a contract chipmaker focused on making power management chips and driver ICs for displays, is to acquire a 13 percent stake in Episil for NT$2.48 billion (US$77.1 million).
RSS