BaFin, the German financial market regulator, has been investigating US banking giant Citigroup since October over possible market manipulation in the euro-zone government
bond futures market, a BaFin spokeswoman said on Wednesday. The investigation was being carried out in "close cooperation" with the regulatory authorities in Britain and Europe, the spokeswoman said. BaFin's inquiry had already reached the "formal" stage, meaning that the findings from a preliminary probe had hardened the suspicions, she explained. From there, the BaFin could either decide to pass the case on to prosecutors, impose a fine itself or drop the investigation. The BaFin probe focuses on whether Citigroup's bond traders manipulated the Bund (German government bonds) futures market on the Eurex exchange in the summer. Under investigation are some controversial bond trades by Citigroup in August.