Citigroup Inc.’s former head of emerging markets, Victor Menezes, may be involved in a federal insider- trading lawsuit regarding a $29.8 million stock sale 18 days before the world’s largest bank reported a $2.2 billion loss in Argentina.

According to the NASD documents released last week, a 55 year-old Menezes got a so-called Wells notice in August from the U.S. Securities and Exchange Commission about the share sale. Citigroup’s Leah Johnson, speaking on behalf of Menezes, said that notice was about a sale of Citigroup shares taking place on March 28, 2002. On that very day Menezes sold 597,000 Citigroup shares, an SEC filing shows. A Wells notice is a formal warning identifying that the agency’s staff has fixed a sufficient wrongdoing to file a lawsuit.

Commenting this situation John Coffee, a professor who specializes in securities law at the Columbia University School of Law in New York said,``these facts create at least enough circumstantial evidence to explain why the SEC might be investigating whether he traded on non-public information related to Argentina and its problems for Citigroup.’’

SEC spokeswoman Carol Patterson refused to comment on Menezes’s Wells notice or a separate inquary into Citigroup’s accounting for Argentina.