Finra arbitrators ordered a division of Citigroup Inc. to pay $725,383 in compensatory damages to a former broker who was involved in a trading violation.
A three-person Financial Industry Regulatory Authority Inc. arbitration panel held Citigroup Global Markets Inc. liable for failing to pay Shlomo Salant compensation he earned in 2014, according to an Aug. 26 award. That year, Salant agreed to settle with the Chicago Board of Trade for his role in a scheme to create false market interest in U.S. Treasury futures.
The Chicago board “found that during the time period of September 2011 through December 2012, Salant entered orders without the intent to trade and to create the appearance of an imbalance in buy/sell pressure,” according to a disclosure on Salant’s BrokerCheck record.
In 2017, the Commodity Futures Trading Commission reached a non-prosecution deal with Salant and two other traders for their cooperation in the investigation of the illegal “spoofing.”
Citigroup terminated Salant in 2015. But in an arbitration claim filed in March 2019, Salant alleged that Citigroup did not pay what it owed him for his work in 2014.
The Finra arbitrators unanimously ruled that Citigroup must pay Salant $107,619.50 for cancelled deferred cash and stock benefits, as well as $617,763.82 for a cash bonus attributable to his employment in 2014, for a total of $725,383.32 in compensatory damages.
“We’re very pleased with the award,” said Michael Deutsch, a partner at Singer Deutsch, who represented Salant. “The arbitrators recognized his right to a bonus as well as the deferred compensation that had been confiscated and cancelled by Citigroup.”
Salant had requested a minimum $1 million in compensatory damages and $3 million in punitive damages.
Citigroup indicated it might dispute the arbitration ruling.
“We’re disappointed in the award since Mr. Salant admittedly engaged in spoofing,” Citigroup spokesperson Mark Costiglio said in a statement. “We’re considering options with respect to it.”
But Deutsch said Salant earned his pay in the year before his departure from Citigroup.
“This arbitration decision reflects an understanding by the panel that employees deserve to be paid based on their performance and the value they bring to their companies,” he said.
Salant was hired in 2015 by Mizuho Securities USA, where he continues to work.
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