Citigroup Will Pay $15 Million to Settle SEC Trade-Review Claims

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Citigroup Inc. will pay $15 million to resolve U.S. Securities and Exchange Commission claims that its Global Markets unit failed to enforce policies to prevent transactions that could lead to misuse of nonpublic information.

The bank didn’t review thousands of trades executed by several of its trading desks over a 10-year period, the SEC said in a statement Wednesday. The New York-based bank routed more than 467,000 transactions on behalf of advisory clients through an affiliated market maker without seeking consent.

“Firms must ensure that they have devoted sufficient attention and resources to trade surveillance and other compliance systems,” Andrew Ceresney, director of the SEC’s enforcement division, said in the agency’s statement.

The bank has faced several SEC actions since 2003, including understating its risks to subprime mortgages in the credit crisis and misleading investors in the offering of municipal securities, according to the SEC complaint. Earlier this week, the bank agreed to pay $180 million to resolve allegations it defrauded wealthy clients in two failed hedge funds.

Scott Helfman, a Citigroup spokesman, said the bank was pleased to have resolved the matter. Citigroup, which didn’t admit or deny the SEC’s findings, agreed to hire a consultant to recommend improvements to its trading surveillance systems.

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