Citigroup Global Markets hit with $11.5 Million in Sanctions

Citigroup Global Markets Reportedly displayed inaccurate research ratings

 According to the Financial Industry Regulatory Authority, the regulator fined Citigroup Global Markets Inc. $5.5 million on Thursday and required the firm to pay at least $6 million in compensation to retail customers for displaying inaccurate research ratings for numerous equity securities.

Citigroup reportedly disseminated its research ratings to customers on account statements, email alerts and an online portal. The firm’s brokers and supervisors, meanwhile, relied on internally disseminated research ratings to make security recommendations and to monitor customer transactions and portfolio allocations.

According to FINRA’s findings, between February 2011 and December 2015, Citigroup displayed inaccurate research ratings for more than 1,800 equities—more than 38 percent of those covered by the firm—to its brokers, retail customers and supervisors.

Because of errors in the electronic ratings feed that the firm provided to its clearing firm, the firm displayed “buy” instead of “sell” ratings for a number of equities.

Additionally they displayed ratings for other securities that Citigroup did not cover and failed to display ratings for securities that Citigroup rated.

Citigroup brokers allegedly solicited thousands of transactions inconsistent with the firm’s actual ratings and negligently made inaccurate statements to customers about those ratings. FINRA says the inaccurate ratings had widespread, adverse consequences.

Brokers also solicited transactions that violated certain firm-managed portfolio guidelines, in violation of Citigroup prohibitions against securities with “sell” ratings.

According to FINRA, Citigroup self-reported the inaccurate research ratings. The firm also established a remediation plan to compensate affected customers and provided substantial assistance to regulators.

Investigating Potential Claims

The White Law Group is investigating the liability that Citigroup Global Markets may have for losses sustained by their clients.  Brokerage firms are required to adequately supervise their agents to ensure they are complying with FINRA rules. If it is determined that the broker dealer failed to supervise their agents, they can be held responsible for losses in a FINRA arbitration claim.

FINRA is dedicated to investor protection and market integrity. It regulates one critical part of the securities industry – brokerage firms doing business with the public in the United States. FINRA administers a dispute resolution forum for investors and brokerage firms and their registered employees.

Are you concerned about your investments with Citigroup Global Markets?  The attorneys at The White Law Group may be able to help you. For a free consultation with a securities attorney, please call (888) 637-5510.

The foregoing information, which is all publicly available on FINRA’s website, is being provided by The White Law Group. 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.

For more information on The White Law Group, please visit www.whitesecuritieslaw.com