Citi violated bribery laws? SEC probes

The US SEC is investigating whether banks including Citigroup Inc violated bribery laws.

The US Securities and Exchange Commission is investigating whether banks including Citigroup Inc and private-equity firms such as Blackstone Group,violated bribery laws in their dealings with sovereign-wealth funds,according to a media report.

“The Securities and Exchange Commission (SEC) is investigating whether banks and private-equity firms,violated bribery laws in their dealings with sovereign-wealth funds,” The Wall Street Journal reported citing a source.

According to the publication,the SEC has sent letters of inquiry to banks such as Citigroup as well as private-equity firms including Blackstone Group LP.

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Besides,the report said that letters are said to have been sent to as many as 10 firms in the past week.

Though the letters did not contain specific allegations of bribery,they requested that firms retain documents and asked about the firms’ dealings with sovereign-wealth funds,the daily noted.

The report further said that one person that received a letter said it was brief,indicating the investigation is at the early stages.

However,the SEC declined to comment,the report pointed out.

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Sovereign-wealth funds,which are investment funds owned and generally operated by overseas governments,have invested in both private-equity managers and the biggest Wall Street firms over the past several years. In some cases,the sovereign funds have helped the firms stave off collapse. Sovereign wealth funds also invest in funds managed by private-equity firms.

The wave of investments by sovereign-wealth funds in the US financial companies over the past several years included stakes in Citigroup,Merrill Lynch & Co before its acquisition by Bank of America Corp,and Morgan Stanley,the report said.