News Column

Argentina says holdouts may be fraudsters

August 5, 2014


ARGENTINIAN officials accused hedge funds of insider trading yesterday, and demanded the US authorities investigate.

In the country's latest attack on bondholders who refused to accept a low payout on their investments, regulator Alejandro Vanoli asked the US Securities and Exchanges Commission (SEC) for data on credit default swaps.

He argued that if the holdouts bought the insurance against a default while they were involved in negotiations with Argentina, they may be guilty of market abuse.

The country officially defaulted last week when it failed to pay either the holdouts or the investors who took a haircut on their bonds.

"The use of insider information, which would be the case here, and market manipulation are crimes in Argentina, they are crimes in the US, and they imply economic sanctions and eventually criminal sanctions," said Vanoli, who heads the Argentinian Securities Commission.

The government has refused to pay the holdouts, but is now suffering as a result - defaulting on its debts will make it harder for Argentina to access international debt markets again in future.

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Source: City A.M. (UK)

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