7th Jan 2016 06:51
LONDON (Alliance News) - The UK's Financial Conduct Authority is investigating traders at Lloyds Banking Group PLC over possible manipulation of the British government-bond market, the Wall Street Journal reported after the close on Wednesday, citing people familiar with the matter.
Part of the probe is considering whether the traders in question tried to boost their profits by driving down the prices that the British bonds, known as gilts, were able to achieve in government auctions or by artificially raising prices when they were sold on to other investors.
According to the report, the investigation is at an early stage and is currently focused on individual traders at Lloyds. It is not a broader probe into the gilt market, one person told the newspaper.
The UK government still owns roughly 9.2% of Lloyds Banking Group, according to a stock exchange filing last month, and has been selling down its stake since September 2013. The GBP20.5 billion state rescue required by Lloyds in the wake of its disastrous takeover of HBOS in the financial crisis of 2008-09 gave the UK taxpayer a holding that was once as large as 43%.
Shares in Lloyds closed down 0.8% at 71.00 pence on Wednesday.
http://www.wsj.com/articles/u-k-regulator-probes-lloyds-traders-for-possible-gilt-market-manipulation-1452103361
By Samuel Agini; [email protected]; @samuelagini
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