The Wall Street Journal reports that US regulator the Securities and Exchange Commission (SEC) has launched a probe to ascertain whether UBS was 'involved in improper manipulation of Treasury-services prices'. According to the newspaper, a US government inquiry has been quietly unfolding in recent weeks.
It remains unclear exactly what the SEC is investigating, although James Clouse, a senior US Treasury official, told the Bond Market Association in a speech last month that he was concerned that Treasury-securities prices were possibly being manipulated. The newspaper does, however, quote an unnamed 'senior bond trader' who has said that Treasury officials 'have been worried about whether hedge funds or other investors were asking brokers to take certain securities off the market, to make certain positions more valuable'. A UBS spokesperson has confirmed that the bank 'is co-operating with the investigation'.
The Journal has also reported that a Credit Suisse bond trader, Thomas Brown, has left the firm after he came under scrutiny by regulators. Credit Suisse refused to comment, other than to say that the matter 'concerns an individual, not the institution'.