US Justice Department probes Hedge Funds manipulations against euro

The Wallstreet Journal reported that the US Justice Department has asked hedge funds including SAC Capital Advisors LP, Greenlight Capital Inc., Soros Fund Management LLC and Paulson & Co. to retain trading records and emails relating to the euro.The letter requested that the funds "preserve all documents" and electronic communications relating to agreements to trade the euro or communications about agreements to trade currencies, the source said.The Justice Department's letter said the antitrust division "has opened an investigation into agreements among various hedge funds that trade euro contracts," the newspaper quoted a source as saying.

The euro has come under selling pressure during the Greek debt crisis, losing over 10 percent since November, and the newspaper said the request, dated February 26, coincided with its article describing gatherings of hedge fund managers where the euro was discussed.

One of the questions investigators are likely to examine is whether such information-sharing amounts to collusion, the Journal quoted the sources as saying.

The reported Justice Department probe comes at a time when financial institutions are facing scrutiny over their role in the Greek financial crisis.

NOTE EU-Digest: With the proper regulations in place this could not happen. When will these regulations be in place which have been promised by political leaders around the globe since last year.

For the complete report: U.S. probes hedge fund bets against euro: report | Reuters