Your "Tropical heat at Citibank" (Finance, May 17) story is wrong in its allegations and innuendo directed at a Citibank trader in Panamanian debt. You cited rumors he "had been selling Panamanian debt on Apr. 21, before reports that the talks [between Panama's negotiators and its bank creditors] had been inconclusive." In fact, we made no debt sales before that news hit the market.

The article disregarded a 9:23 a.m. Reuters report that the talks had "amounted to little more than what banking sources termed an exchange of information." BUSINESS WEEK referred to a call by our trader "sometime after noon," recollected by an anonymous "investor." From our records, we know that call was not to an investor but to another institutional market maker, a professional participant with the same access to information as our trader. In keeping with market practice, our trader asked for the other trader's prices for both buying and selling, and accepted the quoted buy price--a typical trading transaction.

The story seemed to endorse anonymous innuendo, although it ultimately conceded there is no evidence that Citibank's trader had privileged information. The evidence makes clear that he did not, as we stated to your reporter on the basis of our thorough investigation of the record of trades and tapes of all trading desk phone calls. You acknowledged that we have strict rules to prevent trading improprieties--and they worked on Apr. 21. Trades, in fact, were few in number, not substantial in volume, and consisted of buys as well as sells.

Malicious, unfounded rumors are an occasional byproduct of the flow of comment, information, and speculation in a market environment. Such rumors should not be the basis of articles in BUSINESS WEEK.

John M. Morris

Director, Media Relations

Corporate Affairs


New York

Editor's note: The 9:23 a.m. Reuters story reported on the previous day's talks and did not significantly affect Panamanian debt prices. Another Reuters story that "Panama does not intend to resume interest payments on its medium- and long-term bank debt in 1993" came over the wire about 5 p.m., after the trading cited in the story.

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