January 26, 2017

– Citigroup Global Markets will pay $18.3 million to settle charges that it overbilled investment advisory clients and misplaced client contracts.  The SEC’s order finds that at least 60,000 advisory clients were overcharged approximately $18 million in authorized fees because Citigroup failed to confirm the accuracy of billing rates entered into its computer systems in comparison to fee rates outlined in client contracts, billing histories, and other documents.  Citigroup also improperly collected fees during time periods when clients suspended their accounts.  The billing errors occurred during a 15-year period, and the affected clients have since been reimbursed.  The SEC’s order further found that Citigroup could not locate approximately 83,000 advisory contracts for accounts opened from 1990 to 2012.  Without the contracts, Citigroup could not properly validate whether the fee rates negotiated by clients when accounts were opened were the same advisory fee rates being billed.  It is estimated that Citigroup received approximately $3.2 million in excess fees from advisory clients whose contracts were lost.  SEC

Tagged in: Financial and Investment Fraud,