The Financial Industry Regulatory Authority has censured Citigroup Global Markets after finding the financial services firm failed to report transactions promptly to its Trade Reporting and Compliance Engine.
Citgroup was fined $400,000 and ordered to pay $10,000 in restitution to customers. Citigroup neither admitted nor denied FINRA’s case. Citigroup did not respond to Securities Technology Monitor requests for further comment.
FINRA found Citigroup purchased municipal securities for its own account from a customer, which it did not name, and sold municipal securities for its own account to a customer at a price that was not fair and reasonable; and, failed to report report the correct symbol indicating whether transactions were a buy, sell, sell short or cross for reportable securities transactions.
FINRA also determined that Citigroup failed to immediately display customer limit orders in NASDAQ securities in its public quotationor when the order was priced equal to the firm’s bid or offer and the national best bid or offer for each such security, and the size of the order represented more than a de minimis change in relation to the size associated with the firm’s bid or offer in each such security.
Moreover, FINRA found that the firm failed to transmit Reportable Order Events to the Order Audit Trail System (OATS). In addition, some reports contained incorrect destination codes and ailed to adjust the price or shares in orders by amounts of dividends, payments or other distributions.
Without admitting or denying the findings, Citigroup consented to the described sanctions and to the entry of findings that it failed to report transactions in TRACE-eligible securities to TRACE within 15 minutes of execution time.
The orders that were not promptly reported to TRACE from 2006 to 2008, according to FINRA’s case, reported in its December summary of disciplinary actions newly published.
In other disciplinary actions reported by FINRA:
* Keybanc Capital Markets of Cleveland, Ohio was censured and fined $100,000 for “unresolved differences” in its books, after it switched to a new back-office system.
Without admitting or denying the findings, FINRA said the firm consented to findings that some of the firm’s wash accounts and suspense accounts experienced “significant posting problems after the conversion”; a number of transactions were posted to multiple wash accounts in error, resulting in reconciling items in the accounts that the firm was not able to pair off. Keybanc also was not taking “appropriate charges for net capital and customer reserve computations” as a result.
* Tyler McKittrick Eddy, a registered representative in New York City, was fined $200,000 and suspended from association with any FINRA member in any capacity for one month. Without admitting or denying the findings, Eddy consented to the entry of findings that he engaged in improper communications with other inter-dealer brokers about proposed reductions in credit default swaps dealers’ brokerage fees. The suspension ran from November 15 through December 14.
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