Investment Losses in CitiFX Alpha?

Are you concerned about investment losses in CitiFX Alpha? If so, The White Law Group may be able to help you recover your losses. The brokerage firm that sold you the investment could be held liable through FINRA arbitration.

The SEC announced today that Morgan Stanley Smith Barney and Citigroup Global Markets have agreed to pay more than $2.96 million apiece to settle charges that they made false and misleading statements about CitiFX Alpha.

CitiFX Alpha is a foreign exchange trading program that was sold to Morgan Stanley customers from August 2010 to July 2011, according to the SEC press release. At the time, Citigroup held a 49 percent ownership interest in Morgan Stanley Smith Barney and representatives at both firms were pitching the foreign exchange trading program.

Unfortunately for investors, the sales pitch was based on the program’s past performance and risk metrics, and there were undisclosed leverage and markups causing investors to suffer significant losses, according to the SEC.

What is Forex?

The foreign exchange market (forex, FX, or currency market) is a global decentralized market for the trading of currencies. This includes all aspects of buying, selling and exchanging currencies at current or determined prices.  Trading in the forex market carries above-average risk.

“Citigroup and Morgan Stanley sold securities in a complex trading program without giving certain investors important information about the risks and costs of the program,” said Eric I. Bustillo, Director of the SEC’s Miami Regional Office.  “Investors simply cannot be sold investments based on disclosures that are inaccurate or incomplete.”

Without admitting or denying the SEC’s findings, Morgan Stanley and Citigroup agreed to pay a total of more than $5.9 million combined.

Recovering Investment Losses in CitiFX Alpha

The White Law Group is investigating the liability that Morgan Stanley may have for selling these products to their clients.  Specifically, The White Law Group is investigating the liability that brokerage firm’s may have for recommending this risky investment.  Brokerage firms are required to perform adequate due diligence on any investment they recommend and to adequately disclose the risks of any investment.  Additionally, brokerage firms are required to ensure that all investment recommendations made are suitable in light of the client’s age, investment experience, investment objectives, net worth, and income.

If it can be demonstrated that a brokerage firm failed to perform adequate due diligence, to properly disclose the risks, or recommended an investment unsuitably, the firm may be held responsible for any resulting losses in a FINRA arbitration claim.

If you suffered losses invested in CitiFX Alpha and would like to discuss your litigation options, please call the securities attorneys of The White Law Group at 888-637-5510 for a free consultation.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Franklin, Tennessee.  The firm represents investors throughout the country in FINRA arbitration claims against their brokerage firm.

For more information on The White Law Group, visit http://whitesecuritieslaw.com.