FINRA FINES CITI INTERNATIONAL FINANCIAL AND ORDERS RESTITUTION FOR EXCESSIVE MARKUPS AND MARKDOWNS CHARGED TO CUSTOMERS
The Financial Industry Regulatory Authority (FINRA) has fined Citi International Financial Services, LLC (“Citi”), a subsidiary of Citigroup, Inc., $600,000 and ordered it to pay $648,000 in restitution for excessive markups and markdowns charged to customers on bond transactions.
FINRA’s investigation revealed that, from July 2007 through September 2010, Citi charged its customers markups and markdowns on corporate and agency bond transactions ranging from below 2.73% to more than 10%. FINRA found that this range was higher than reasonable based on several factors including market conditions, the cost of execution and the value of services rendered to the customers.
FINRA also found that from April 2009 to June 2009, Citi failed to use reasonable diligence in buying and selling corporate bonds so that the resulting price charged to its customers was as favorable as possible in light of current market conditions.
FINRA also charged Citi with having inadequate supervisory procedures regarding fixed income transactions, including deficiencies in the review of markups and markdowns and the utilization of a pricing grid that was based on the par value of the bonds instead of the actual value of the bonds.
Investors nationwide who have incurred recoverable investment losses due to specific failures by stockbrokers and brokerage firms, and who may have a FINRA arbitration claim, may contact the Florida securities lawyers at McCabe Rabin, P.A. for a free and confidential consultation by calling toll free at 877.915.4040 or by e-mail to email@example.com.