Citigroup Grapples With the Volcker Rule (C)

Bloomberg is reporting that Citigroup (NYSE: C) may be moving its proprietary traders (prop traders) into its hedge-fund unit in a bid to become compliant with the “Volcker Rule” provision in the Dodd-Frank Act.

These prop traders would be moved to the hedge-fund unit, where the bank would set up the traders as fund managers and seed the funds; they would then raise outside capital to redeem its stake, in effect turning the interest-plus-capital-appreciation business into another fee based business.

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http://www.bloomberg.com/news/2010-07-28/citigroup-may-move-prop-traders...