Defendant Name:
Citigroup Global Markets Inc.
Defendant Type:
Subsidiary of Public Company
Public Company Parent:
Citigroup Inc.
SIC Code:
6021
CUSIP:
17296742
Initial Case Details
Legal Case Name
In the Matter of Citigroup Global Markets, Inc.
First Document Date
24-Jan-2017
Initial Filing Format
Administrative Action
File Number
3-17808
Allegation Type
Broker Dealer
Resolutions
First Resolution Date
24-Jan-2017
Headline Total Penalty and Disgorgement
$2,963,736
Related Documents:
33-10288
24-Jan-2017
Administrative Proceeding
Order Instituting Cease-and-Desist Proceedings Pursuant to Section 8A of the Securities act of 1933, Making Findings, and Imposing a Cease-and-Desist Order
On January 24, 2017, the SEC instituted a settled proceeding against Citigroup Global Markets, Inc. According to the SEC: ""Between August 2010 and July 2011, certain registered representatives of CGMI and certain registered representatives of Morgan Stanley Smith Barney LLC ("MSSB") presented to certain brokerage customers and advisory clients of MSSB a foreign exchange trading program known as 'CitiFX Alpha.'The programwas pitched both in writing and orally to investors based on its past performance and risk metrics. These presentations, however, were rendered materially misleading because they failed to adequately disclose that the Relevant Investors could be placed into the program using substantially more leverage than was disclosed and that mark-ups would be charged on each trade."
Morgan Stanley, Citigroup Charged With Misleading Investors About Forex Trading Program
On January 24, 2017 the SEC announced in a press release that Citigroup Global Markets has agreed to pay a monetary penalty to "settle charges that they made false and misleading statements about a foreign exchange trading
program they sold to investors." According to the SEC: CGMI's "written and verbal presentations were based on the program’s past
performance and risk metrics, and they failed to adequately disclose that investors could be placed into the program using substantially more leverage than advertised and markups would be charged on each
trade. The undisclosed leverage and markups caused investors to suffer significant losses."
34-81634
14-Sep-2017
Administrative Proceeding
Corrected Order Appointing Tax Administrator
According to the SEC: "... Miller Kaplan, pursuant to and in accordance with the Omnibus Order, is appointed the Tax Administrator for the QSF in the above-referenced proceeding."
Order Consolidating Fair Funds
The Commission ordered that: "the Fair Funds created pursuant to the Orders are consolidated into a single Fair Fund, the Morgan Stanley Smith Barney Fair Fund, for purposes of distribution to harmed investors."
Notice of Proposed Plan of Distribution and Opportunity for Comment
The Commission stated: "Notice is hereby given . . . that the Division of Enforcement has submitted to the Commission a proposed plan of distribution (the "Proposed Plan") for the distribution of monies paid in the above-captioned matters."
Proposed Plan of Distribution
The Commission stated: "The Division of Enforcement submits this Proposed Plan of Distribution (the “Plan”) to the United States Securities and Exchange Commission (the “Commission”) . . . . This Plan provides for the distribution of a Fair Fund (the “Fair Fund”) comprised of disgorgement, prejudgment interest, and civil money penalties paid by Citigroup Global Markets, Inc. (“CGMI”) and Morgan Stanley Smith Barney LLC (“MSSB”) (collectively, the “Respondents”) in the above-captioned matters."
Order Approving Plan of Distribution
The Commission ordered that: "the Proposed Plan is approved, and the approved Plan of Distribution shall be posted simultaneously with this order on the Commission’s website at www.sec.gov."
Plan of Distribution
The Commission stated: "The Division of Enforcement has prepared this Plan of Distribution (the “Plan”) to the United States Securities and Exchange Commission (the “Commission”) . . . . This Plan provides for the distribution of a Fair Fund (the “Fair Fund”) comprised of disgorgement, prejudgment interest, and civil money penalties paid by Citigroup Global Markets, Inc. (“CGMI”) and Morgan Stanley Smith Barney LLC (“MSSB”) (collectively, the “Respondents”) in the above-captioned matters."
Order Directing Disbursement of Fair Fund
The Commission ordered that: "the Commission staff shall direct the payment of $903,012.09 from the Fair Fund for distribution in accordance with the Plan."
