Citi Settles SEC Compliance Charges for $15 Million -- Update
August 19 2015 - 12:25PM
Dow Jones News
By Lisa Beilfuss
Citigroup Inc. on Wednesday agreed to pay $15 million to settle
charges of compliance and surveillance failures, according to the
Securities & Exchange Commission.
An investigation found the bank didn't review thousands of
trades executed by several of its trading desks during a 10-year
period. While personnel used electronically generated reports to
review trades on a daily basis, technological errors caused the
reports to omit several sources of information about thousands of
relevant trades, according to the regulator.
The SEC also said Citi inadvertently routed about 467,000
principal transactions on behalf of advisory clients to an
affiliated market maker because its policies and procedures to
avoid such occurrences weren't reasonably designed or
implemented.
The violations both involved long-term technology problems,
according to the SEC.
"Today's high-speed markets require that broker-dealers and
investment advisers manage the convergence of technology and
compliance," and "firms must ensure that they have devoted
sufficient attention and resources to trade surveillance and other
compliance systems," said SEC enforcement official Andrew
Ceresney.
A Citi representative said the bank is pleased to have resolved
the matter.
Meanwhile, under another agreement reached Wednesday, New York
Attorney General Eric Schneiderman said Citi will offer additional
reimbursements totaling about $4.5 million to some customers who
were overcharged fees on their investment accounts.
The refunds follow an agreement the bank reached in October with
the New York Attorney General to return $16 million in principal
and interest to 31,000 customers after it was discovered those with
certain types of investment accounts were overcharged for advisory
fees.
The additional $4.5 million in reimbursements will go to about
15,000 customers for whom the bank later found it failed to rebate
after periods of inactivity.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
August 19, 2015 12:10 ET (16:10 GMT)
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