Citigroup Global Markets agreed to pay $15 million to settle SEC charges that it failed to adequately review thousands of securities transactions by several of its trading desks over 10 years.
Technological errors by Citigroup caused electronically generated reports that reviewed each day's trades to omit several sources of information about thousands of trades from 2002 to 2012, the Securities and Exchange Commission said in an administrative order issued Wednesday.
“These reports were created electronically, and several trading platforms, or electronic systems, that contained information about relevant trades were omitted from these trade reports that (Citigroup Global Markets) used for daily surveillance,” according to the SEC order.
The SEC also said Citigroup Global Markets “inadvertently routed more than 467,000 transactions” on behalf of advisory clients to market-maker subsidiary Automated Trading Desk Financial Services. Under SEC rules, Citigroup was required to either direct investment advisory clients' trades away from ATD or seek client consent to trade on the desk; Citigroup had policies and procedures in place to reroute the orders, but they “were not reasonably designed or implemented, and failed to divert certain advisory orders away from ATD,” the SEC order said.
Citigroup did not admit or deny the SEC charges in settling with the SEC, according to the agency.
“We are pleased to have resolved this matter.” said Scott Helfman, Citigroup spokesman. He wouldn't comment further.