Argentina seeks deal with the SEC amid debt buyback leak investigation

Amid suspicions related to the debt buyback, the government’s market regulation office, the CNV, aims to expand its information exchange agreement with its U.S. counterpart.


The Argentine market regulation office (CNV) is seeking to expand its current information exchange agreement with its American counterpart, the SEC, sources inside the CNV told the Herald.

After the opposition raised suspicions regarding a potential leak of information regarding the US$1 billion sovereign debt buyback announced last Wednesday, Economy Minister Sergio Massa instructed the CNV to investigate the allegations last week. In the same request, Massa also asked the regulatory office to research possible “speculative maneuvers” in the bond market destined to provoke a spike in the MEP dollar, which saw a sharp rise that the debt buyback aimed to appease.

However, according to sources inside the CNV, that information is not accessible since some of those transactions, which operate in the blue-chip swaps, are made overseas. To access information on who the beneficiaries may have been, the CNV is now seeking to expand its current deal with the U.S. Securities and Exchange Commission (SEC).

International bondholders are of particular interest to the CNV. Investment funds such as Templeton and Pimco, which deal in the blue-chip swap exchange rate, still hold peso debt.

The sources claim that the expansion of the information agreement will be a permanent change, and will make the operation with Argentine bonds overseas “more transparent” from now on.

Meanwhile, investigations regarding foul play around the debt swap are still advancing in the CNV. Ten of the largest stock brokers in Argentina are being interrogated about their own portfolios and those belonging to their clients, to determine whether there were unusual movements. Among the targeted maneuvers are unusually high-rated bonding insurances that could indicate prior knowledge of the bond buyback. Information on the clients’ funds, tax statements, and wire transfers around the time the buyback was announced will also be reviewed.

The CNV expects to report findings by March or April.

Since the regulatory office is not allowed to determine if a party is guilty, it will limit itself to presenting its findings to the Justice system. The CNV will also report its findings to Congress if it is asked to do so, abiding by stock market confidentiality, the sources told the Herald.

With reporting by Estefanía Pozzo


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