Citigroup Inc. will pay $2.9 million to settle Securities and Exchange Commission allegations that the bank’s broker had flawed processes in its accounting in underwriting of securities offerings.
The SEC alleged Tuesday that the broker didn’t keep current records on the way it accounted for expenses charged in the underwriting of securities offerings.
From 2009 to 2019, Citigroup Global Markets had no policies, procedures or review processes for how it estimated indirect expenses in underwriting offerings, the regulator said.
A spokesman for Citigroup declined to comment. The bank didn’t admit to or deny the regulator’s allegations in settling.
Rajesh Markan earlier this year pleaded guilty to one count of criminal fraud related to his sale of fake investments to 10 clients totaling $2.9 million.
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"The outcome is correct, but it's disappointing that FINRA had ample opportunity to investigate the merits of clients' allegations in these claims, including the testimony in the three investor arbitrations with hearings," Jeff Erez, a plaintiff's attorney representing a large portion of the Stifel clients, said.
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