Citigroup Inc. disclosed a new government probe involving theindustry's trading and clearing of interest-rate swaps five monthsafter paying $425 million to resolve claims that it attempted torig derivatives markets.

The bank is cooperating with the U.S. Commodity Futures TradingCommission, New York-based Citigroup said Monday in a regulatoryfiling. The case is related to a pension fund's 2015 antitrustlawsuit alleging that 12 of the biggest swap dealers blocked fundmanagers from trading the instruments on exchanges to preservetheir profits, according to a person with knowledge of theinvestigation who asked not to be identified because theinformation isn't public.

The disclosure is the latest questioning the role of WallStreet's biggest dealers in helping determine the prices for arange of financial instruments. Authorities around the world havebeen clamping down on the derivatives and currency markets since2013 after allegations that bank traders rigged benchmarks. Inthe currency market, more than a half-dozen lenders have been fineda total of more than $10 billion and scores of traders have beendismissed. Other investigations into gold markets and currencyoptions are also under way.

Mark Costiglio, a spokesman for Citigroup, and Steven Adamske ofthe CFTC declined to comment. Citigroup agreed earlier this year topay $425 million to resolve a CFTC claim that it tried to riginterest-rate benchmarks including ISDAfix from 2007 to 2012,without admitting or denying the allegations.

Defendants in the 2015 complaint include Bank of America Corp.,Citigroup, Goldman Sachs Group Inc., JPMorgan Chase & Co., UBSGroup AG, Barclays Plc, Credit Suisse Group AG and Deutsche BankAG. ICAP Capital Markets LLC and Tradeweb Markets LLC were alsosued. Bloomberg LP, the parent company of Bloomberg News, competeswith ICAP and Tradeweb in offering swap trading to itscustomers.

'Critical Benefits'

Banks named in the antitrust lawsuit conspired to prevent theircustomers “from enjoying the critical benefits of exchange trading,including transparent and competitive pricing and fasterexecution,” according to the 2015 complaint. “The dealer defendantsdid this for one simple reason: to preserve an extraordinary profitcenter.”

Blocking changes to the market that would allow exchange-styletrading resulted in profit equal to billions of dollars a year forthe banks, the lawsuit alleged, without naming an exact figure.

Citigroup said in the filing Monday that both the trading andclearing of rate swaps were being probed. Previous CFTCinvestigations of ISDAfix and other markets have involved thetrading of interest-rate swaps, but not necessarily the clearing ofthe instruments.

Under the Dodd-Frank Act, most rate swaps must be traded onelectronic systems known as swap-execution facilities and thenbacked by a clearinghouse. The mandate is meant to improve pricetransparency for investors while a clearinghouse reduces the effectof a default on the broader market by requiring collateral in casea user goes bankrupt.

The changes mean that, theoretically, two investors can tradewith each other, bypassing investment banks' traditional role inthis market.

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