Citigroup Inc was suspended from the primary group of dealers that participate at certain Japanese government bond auctions after it was found to have manipulated futures prices.
The Ministry of Finance ordered Citigroup Global Markets Japan Inc’s exclusion from participating in “non-price competitive auctions” and certain other government bond sales for a month from June 13, it said. The suspension comes days after the Financial Services Agency fined the firm
$1.2 million and ordered it to improve internal controls for failing to detect instances of manipulation of the Japanese government bond market.
Citigroup was found to have placed orders last October for JGB futures contracts without intending to execute them, a practice known as spoofing.
“The company had deficiency in trade surveillance related to market transactions of derivatives,” the finance ministry said.
Citigroup is ranked 12th among underwriters of Japanese corporate bonds over the past 12 months, data compiled by Bloomberg show.