Citigroup said today that it has placed the traders involved in last year's controversial euro zone bond trade on leave of absence while the transaction is being investigated by European regulators.
"The traders involved with the MTS matter are on leave of absence pending the outcome of various regulatory investigations," the bank said in a statement. A spokesman for the firm declined further comment.
Citigroup is being investigated by German prosecutors and Britain's Financial Services Authority for a multi-billion-euro trade in euro zone government bonds, part of which was over electronic bond trading platform MTS, last August.
German prosecutors are looking into whether the firm manipulated the market when it sold and then bought billions of euros worth of debt in quick succession last August.
In recent days media reports and sources close to the matter said a number of other national regulators would be looking into the trade.
On Thursday the European Central Bank President Mr Jean-Claude Trichet weighed in with the comment that "regulators and surveillance authorities are doing what they have to do in such a case".
Citigroup has expressed its regret over the trade, which chief executive Mr Chuck Prince referred to as "knuckle-headed", but it does not believe it has broken any market rules or regulations.