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FINRA Fines Citigroup $2 Million for Trade Reporting Violations

By Adam Gana

The Financial Industry Regulatory Authority, the agency charged with broker-dealer regulation and overseeing arbitrations, fined Citigroup's global-markets unit $2 million for trade-reporting violations.

Finra explained that Citigroup's system failures caused the incorrect publication of over 6,800 transactions in over 170 securities. The false publications created a furry of trading that indirectly caused other brokerage firms to execute transactions related to the incorrect value placed on the Citigroups "transactions" in the 170 securities.

According to Mike Barris on the Dow Jones Newswires "Finra also found Citigroup didn't report about 6 million orders to Finra's Order Audit Trail System, between Aug. 1, 1999 and July 10, 2006. The regulator also found that from July 2002 through September 2006, Citigroup inaccurately reported or failed to report over 300,000 transactions to Finra's Trade Reporting and Compliance Engine and inaccurately reported or failed to report more than 480,000 transactions to the Municipal Securities Rulemaking Board."

Citigroup did not admit to the claims, but consented to entry of the findings. Citigroup said that is has taken "remedial steps to prevent a recurrence of the systems issues" and is "pleased to have resolved these matters."

In a separate action, Finra fined Comerica Inc.'s (CMA) securities operation $750,000 for its role in the auction rate securities debacle. Without admitting or denying FINRA's findings, Comerica consented to the sanctions. Comerica explained that it "used advertising and marketing materials with customers and prospective customers that were not fair and balanced, and did not provide a sound basis for evaluating the facts in regard to ARS purchases."

If you invested in auction rate securities, or in any securities with citibank from 2002 - 2006, Napoli Bern Ripka LLP can help. Contact Adam Gana, 212-267-3700 ext. 115.

Originally posted at InjuryBoard by Adam Gana

Full post as published by New York City Personal Injury Lawyer on March 18, 2009 (boomark / email).