Argentina launched an investigation on the holdouts who closed the litigation against the country's defaulted bonds last week.

The Argentine administration said the debt mediator has been "biased" in conducting the negotiation.

Government officials also accused the mediator to be a "spokesman of the vulture funds," implicating that the holdouts had been in contact with the mediator before their meetings.

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The local financial industry was rattled on Monday as they waited for Argentina to release a public statement on when they could reach a deal with the creditors to exit the default.

At present, bonds in Argentina has been beginning to fall while Merval stocks has experienced an up and down movement.

The investigators are said to focus on the holdouts who disagreed in the initial restructuring Argentina proposed back in 2002.

Alejandro Vanoli, Argentina's head of Securities Commission, said they have contacted their U.S. counterpart for additional information on the holdouts and other details regarding the country's debt and credit swaps that could have been the cause of the default.

"The use of insider information, which would be the case here, and market manipulation are crimes in Argentina, they are crimes in the United States, and they imply economic sanctions and eventually criminal sanctions," said Vanoli in a press conference.

The representatives of the holdouts are not available for comment.

Argentina faced default on Wednesday midnight after they were not able to close a deal with the holdouts regarding the payment terms of the country's debt. A U.S. court ruled that Argentina should pay the holdouts in full before they can use their service exchange bonds.

Judge Thomas Griesa said that Argentina should reach out to negotiations mediator Daniel Pollack to be able to reach another deal with the holdouts. However, just as what Cabinet Chief Jorge Capitanich said Monday, the country does not consider Pollack to be "competent" enough to handle the matter.

TagsArgentina, default, holdouts, investigation, biased