Citigroup Global Markets Censured and Fined $380,000 for Supervisory Failures
Posted on Wednesday, June 26th, 2019 at 3:37 pm
In June 2019, FINRA censured Citigroup Global Markets, fined the firm $225,000 and ordered them to pay $152,488.59 in restitution plus interest for supervisory failures in connection with the sale of Unit Investment Trusts (UITs).
According to FINRA, between 2011 and 2017, Citigroup Global Markets failed to identify and apply sales charge discounts to certain eligible purchases of UITs and failed to establish written supervisory procedures for UIT sales. During this six-year period, 1,476 transactions at Citi eligible to receive a rollover discount in addition to or independent of a breakpoint discount. However, FINRA alleges that Citigroup Global Markets failed to apply sales charge discounts to 594 of these eligible UIT purchase transactions, resulting in customers paying excessive sales charges of $152,488.59
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, Citigroup Global Markets may be liable for investment or other losses suffered by its customers.
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