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August 19, 2015

Posted  January 28, 2016

Citigroup Global Markets will pay a $15 million penalty to settle SEC charges that it failed to enforce policies to prevent transactions that involved misuse of material, nonpublic information.  Broker-dealer employees routinely have access to material nonpublic information.  Therefore, federal securities laws require firms to take reasonable steps to prevent misuse of such information.  An SEC investigation found that between 2002 and 2012, Citigroup’s monitoring for such abuse was inadequate because it failed to review thousands of trades executed by its trading desks.  Additionally, the SEC found that Citigroup inadvertently routed more than 467,000 transactions on behalf of advisory clients to an affiliated market maker which executed the transactions as principal at or near prevailing market prices.  SEC

Tagged in: Financial Institution Fraud, Regulatory Violations, Securities Fraud,