Trader talk good place to start as US looks at treasury markets probe

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The U.S. federal probe that ended last month with guilty pleas and $6bn in fines from global banks began with an open secret - that currency traders there could talk to each other to coordinate trades.

Bloomberg News reports that now, the Justice Department unit behind those prosecutions is turning its sights on the $12.7tril U.S. Treasury market, a world with some of its own open secrets.

Dozens of times a year before the Treasury holds an auction, salespeople at 22 primary dealers field billions of dollars in bids for government debt. Traders working at some of these financial institutions have the opportunity to learn specifics of those bids hours ahead of the auctions, according to several people familiar with these operations.

Traders at some of these dealers also have talked with counterparts at other banks via online chatrooms, according to people familiar with the operations, with one of them adding that the traders swapped gossip about clients’ Treasury orders as recently as last year.

To access the complete Bloomberg News article hit the link below:

As U.S. Probes $12.7 Trillion Treasury Market, Trader Talk Is a Good Place to Start

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