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In Reply to: Citigroup posted by Reuters on May 30, 2001 at 17:35:44:
: NEW YORK (Reuters) - The Securities and Exchange Commission has subpoenaed Citigroup Inc. (NYSE:C - News) for information of a natural gas transaction that improved the appearance of Dynegy Inc.'s (NYSE:DYN - News) finances, the Wall Street Journal reported on Friday, citing people familiar with the matter.
: The Journal said it was unclear to what extent the bank is a target of the investigation or whether it is simply being asked to provide information to aid the government's investigation into energy-trading Dynegy.
: Citigroup, the No. 1 U.S. financial services company, arranged a loan of $300 million that ended up with a specially created entity. This entity entered a series of gas-trading contracts with a partnership called DMT Supply LP, in which Dynegy held a stake.
: During the first nine months of the gas deal, DMT bought gas from the entity at prices below the market rate and resold it at a profit, Dynegy said in April.
: A number of energy-trading companies have acknowledged sham trades aimed at artificially pumping up trading revenue and volume -- buying and selling power at the same price with the same counterparty.
: Citigroup officials were not immediately available for comment.