Finra fines Citigroup $100,000 for overcharging clients

Investors placed in the wrong mutual fund share classes were overcharged by more than $260,000

Sep 10, 2018 @ 1:34 pm

By Jeff Benjamin

Citigroup Global Markets Inc. has been fined $100,000 by the Financial Industry Regulatory Authority Inc. for failing to properly supervise the sale of mutual funds to certain retirement plan and charitable organization customers.

According to Finra, between January 2011 and September 2016, customers who were eligible to purchase no-load mutual fund shares were instead sold funds with sales loads and higher ongoing expenses.

(More:Finra orders Citi to pay $4 million in wrongful dismissal case)

In May 2016, after Finra initiated an examination of CGMI, it started its own review of the sales practices, according to Finra.

The Finra report found that approximately 274 customer accounts purchased mutual fund shares without receiving the appropriate sales-charge waiver.

CGMI estimates that during the relevant period, customers were overcharged $264,844.

As part of the settlement, CGMI agreed to pay $309,093 of restitution to eligible customers.

"We are pleased to have resolved this matter," said Citi spokesman Drew Benson.


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