Citi failed to monitor its analysts’ communications properly, allowing the staff to indirectly participate in clients’ flotations, a top US regulator said yesterday.
The Financial Industry Regulatory Authority (Finra) fined Citigroup Global Markets $15m (£9.6m) for the failings from January 2005 to February 2014.
The US bank sent around 100 warnings to staff over the period on equity research analysts’ communications. But the bank was slow to act when it found any violations of the rules on selective dissemination of information.
On one occasion, the regulators found bank analysts met clients at dinner and gave investment advice counter to that in their published research. The bank failed to monitor behaviour at the event, despite the risks, Finra said.
“We are pleased to have resolved and put this matter behind us,” said the bank in a statement.
“Citi takes its regulatory compliance obligations seriously, and we believe that we have strong procedures and controls in place to address the issues that Finra has raised in this matter, and we are continually working to improve those procedures and controls going forward.”