Frankfurt prosecutors and Germany’s financial regulator are to meet in order to define whether six Citigroup Inc. traders should be charged with market manipulation concerning controversial bond trades known as "Dr. Evil."

The meeting between representatives from the Frankfurt prosecutors’ office and experts in market manipulation from Bafin, the markets watchdog, is aimed at discussing the aggressive bond trades made by Citigroup in August 2004. The prosecutors want to know whether it can be proved that the Citigroup traders manipulated prices on Eurex, a derivatives exchange for futures contracts trade based on the benchmark German 10-year bond.

"There are talks between the prosecutor and the Bafin about the Citigroup matter at the end of this week," Thomas Bechtel, a spokesman for the Frankfurt prosecutor’s office saidn in an interview with the Wall Street Journal. "No decision will be made until this meeting has taken place."

A spokeswoman for Bafin refused to comment.

In Germany market manipulation is regarded a criminal offense. If prosecutors were to win a trial related to market manipulation, the traders could be imprisoned for five years, legal experts say. Regulators could also make Citigroup return any profit from the trades, which has been evaluated at $17.5 million, or about €13 million.

In a statement released on March 16, a Citigroup spokeswoman said, "As we have stated previously, we regret this trade because it did not meet our standards although we continue to believe it did not violate any applicable rules or regulations. We are committed to cooperating fully with all authorities to resolve this matter."