REFILE-Lead Argentina holdout creditor seeks bank subpoenas: source

viernes 22 de agosto de 2014 12:56 GYT

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By Davide Scigliuzzo

NEW YORK, Aug 22 (IFR) - Elliott Management, the main holdout in Argentina's debt dispute, is preparing to subpoena a number of international banks as part of efforts to seize what it suspects are embezzled Argentine funds, a source at the hedge fund told IFR.

The action, part of Elliott's quest to recover around US$1.7bn in claims from its decade-long dispute with the sovereign, will target financial institutions including Citigroup, HSBC and Standard Chartered, the source said.

Through the subpoenas, Elliott hopes to collect information on transactions in Argentine sovereign bonds that it suspects have been used to launder embezzled state funds.

Some of the transactions targeted are related to Argentine businessman Lazaro Baez, who is accused in Argentina of having embezzled and laundered US$65m. He denies wrongdoing.

"We think a lot of money has moved around under the guise of Argentine sovereign bonds," said the source. "The banks don't take their obligations seriously when it comes to trading securities."

The source said Elliott is focusing on both foreign and domestic-law sovereign bonds, as both kinds of securities are widely traded internationally.

"Moving around bonds is much easier than moving around money," said the source. He indicated that this would be the first of several actions the hedge fund will pursue in relation to suspicious trading activity in Argentine sovereign bonds.   Continuación...