Defendant Name: Smith Barney Fund Management LLC

Defendant Type: Subsidiary of Public Company
Public Company Parent: Citigroup Inc.
SIC Code: 6021
CUSIP: 17296710

Document Reference: 34-51761

Document Details

Legal Case Name In the Matter of Smith Barney Fund Management LLC and Citigroup Global Markets, Inc.
Document Name Order Instituting Administrative and Cease-and-Desist Proceedings Pursuant to Sections 203(e) and 203(k) of the Investment Advisers Act of 1940 and Section 15(b)(4) of the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order
Document Date 31-May-2005
Document Format Administrative Proceeding
File Number 3-11935
Allegation Type Investment Advisers/Investment Companies
Document Summary On May 31, 2005, the SEC instituted settled administrative and cease-and-desist proceedings against Smith Barney Fund Management LLC (the "Adviser") and Citigroup Global Markets, Inc. According to the SEC: "In this case, the Adviser, which serves as investment adviser to the Smith Barney Family of Funds (the 'Funds'), recommended the Funds contract with an affiliate of the Adviser, which would perform limited transfer agent services and sub-contract with the Funds' existing transfer agent. The existing transfer agent would perform almost all of the same services it had performed previously, but at deeply discounted rates, permitting the affiliate of the Adviser to keep most of the discount for itself and make a high profit for performing limited work. In making this recommendation, the Adviser misled the boards by omitting material facts, which led the boards to believe that the Adviser's recommendation was made in the Funds' best interests, which was not true. This self-interested proposal permitted the Adviser and its affiliates to profit from the transfer agent function at the expense of the Funds."

Disgorgement & Penalty Information

Resolutions
Censured
Other Compliance Related Undertaking
Various undertakings
Fair Funds
Plan of Distribution
Monetary Penalties:

Disgorgement

Individual:     Shared:     $109,004,551.00
Shared with: Citigroup Global Markets, Inc.

Civil Penalty

Individual:     Shared:     $80,000,000.00
Shared with: Citigroup Global Markets, Inc.

Pre-Judgment Interest

Individual:     Shared:     $19,055,630.00
Shared with: Citigroup Global Markets, Inc.

Related Documents:

34-61312 07-Jan-2010 Administrative Proceeding
Notice of Proposed Plan of Distribution and Opportunity for Comment
On January 7, 2010, the SEC issued a Notice of Proposed Plan of Distribution and Opportunity for Comment. Previously, on May 31, 2005, the SEC instituted settled administrative and cease-and-desist proceedings against Smith Barney Fund Management LLC and Citigroup Global Markets Inc.
34-61312-pdp 07-Jan-2010 Administrative Proceeding
Proposed Plan of Distribution
On January 7, 2010, the SEC published a Proposed Plan of Distribution. Previously, on May 31, 2005, the SEC instituted settled administrative and cease-and-desist proceedings against Smith Barney Fund Management LLC and Citigroup Global Markets Inc. According to the SEC, the proceedings related to "the appointment and operation of an affiliated transfer agent that served the Smith Barney Family of Funds".
34-61587 25-Feb-2010 Administrative Proceeding
Notice of Proposed Plan of Distribution and Extension of Opportunity for Comment
On February 25, 2010, the SEC issued a Notice of Proposed Plan of Distribution and Extension of Opportunity for Comment. The SEC noted that: "Because exhibits to the proposed plan were inadvertently not attached to the plan that was published to the Commission's web site, the period for comment on the plan has been extended for an additional 30 days from the date of this notice."
34-61587-pdp 25-Feb-2010 Administrative Proceeding
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On February 25, 2010, the SEC published a Proposed Plan of Distribution. Previously, on May 31, 2005, the SEC "instituted and simultaneously settled administrative proceedings against Smith Barney Fund Management LLC and Citigroup Global Markets Inc. ... relating to the appointment and operation of an affiliated transfer agent that served the Smith Barney Family of Funds".
34-61917 15-Apr-2010 Administrative Proceeding
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On April 15, 2010, the SEC issued an Order Approving Plan of Distribution. The SEC appointed Alison T. Conn, Assistant Regional Director in the SEC's New York Regional Office as Fund Administrator. Previously, on May 31, 2005, the SEC instituted settled administrative and cease-and-desist proceedings against Smith Barney Fund Management LLC and Citigroup Global Markets Inc. The May 31, 2005 SEC Order established a Fair Fund.
34-62088 12-May-2010 Administrative Proceeding
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On May 12, 2010, the SEC issued an Order Directing Disbursement of Fair Fund. Pursuant to the Order, "the Commission staff shall transfer $110,782,362.95 of the Fair Fund to the custodians for the entitled funds and that these custodians shall distribute such monies, as provided for in the Plan of Distribution."
34-65460 30-Sep-2011 Administrative Proceeding
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On September 30, 2011, the SEC ordered that: "the Commission modify the Distribution Plan by directing (i) Legg Mason to arrange for the disbursement of $626,556.96 from the Fair Fund to former shareholders of the Capital Preservation II Fund; and (ii) the return of the money that would have used to reimburse Legg Mason had it properly paid the advancements to the Legg Mason Partners Variable Government Portfolio and the Legg Mason Partners Variable Equity Index Portfolio to the Commission for transmittal to the U.S. Treasury upon termination of the Fair Fund."
34-81064_3-11935 30-Jun-2017 Administrative Proceeding
Notice of Name Change of Appointed Tax Administrator
On June 30, 2017, the SEC announced a Name Change of Appointed Tax Administrator, and amended the Omnibus Order, beginning June 2017 and for calendar year 2018, to replace all references to Damasco with "Miller Kaplan Arase LLP which acquired Damasco & Associates LLP" in order to reflect Damasco's name change.
34-81700 25-Sep-2017 Administrative Proceeding
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Other Defendants in Action:

Citigroup Global Markets, Inc.

Related Actions:

SEC v. Thomas v. Jones and Lewis E. Daidone
Lewis E. Daidone
Thomas W. Jones