Justice Dept. eyes anti-euro collusion
The European Union flag is seen waving above the ancient Parthenon in Athens, Greece.
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Bill Radke: The prime minister of Greece today announced a plan to cut bonus pay for government workers and increase the sales tax. It's an attempt to reduce the country's deficit and convince other European nations to help out as well. Meanwhile, the Wall Street Journal is reporting the U.S. Justice Department is investigating whether several hedge funds added to the Greek debt problems by conspiring to drive down the value of the euro. Christopher Werth has that story from London.
Christopher Werth: Several hedge funds, including one owned by billionaire investor George Soros, have been told to preserve their e-mails and other records. The Justice Department wants to see if they made any deals that would amount to collusion in betting against the euro.
In fact, investigators are specifically looking at a dinner in Manhattan last month, where managers were urged to make big bets against the European currency. It's lost about 10 percent of its value since the end of last year.
Some say these kinds of large trades are similar to those that helped bring down Lehman Brothers in 2008. Charles Baden-Fuller of London's Cass Business School says he's not surprised that U.S. investigators have taken notice:
Charles Baden-Fuller: The circumstances for collusion are definitely there, if you know what I mean. These hedge funds are highly connected, because they tend to share very similar locations like London and New York, often within quite short distance of each other.
But he says despite those close connections, he expects the inquiry will show that hedge funds don't collude in a legal sense, and proving that they do would be extremely difficult.
In London, I'm Christopher Werth for Marketplace.