06 December 2016
Visit aciworldwide.com

Citi fined for short-selling violations

18 March 2014  |  1646 views  |  0 Source: Finra

The Financial Industry Regulatory Authority (FINRA) and BATS Exchange1, Inc. announced today that they have jointly ordered Citigroup Global Markets Inc. to pay approximately $1.1 million in connection with short selling ahead of participating in five public offerings of securities, in violation of Rule 105 of Regulation M.

The payments include the disgorgement of more than $538,000, plus interest, of profits and improper financial benefits, and approximately $559,000 in fines. Citigroup also violated supervisory requirements related to Rule 105; and as part of the sanction, the firm was ordered to update its written supervisory procedures for Rule 105 compliance.

Rule 105 of Regulation M under the Securities Exchange Act of 1934 generally prohibits buying securities in secondary offerings when the purchaser sold short the security that is the subject of the offering during a specific restricted period - typically five business days - before the secondary offering is priced.

From May 26, 2009, to September 21, 2010, Citigroup sold securities short within the five business days leading up to the pricing of five public offerings in those securities, and then purchased securities in those offerings. Citigroup purchased a total of more than 1.5 million shares after having sold short 313,890 shares of the securities within the five business days leading up to the offerings.

Thomas Gira, FINRA Executive Vice President, Market Regulation, said, "Rule 105 of Regulation M remains vital to protecting the integrity of the offering process by prohibiting firms from engaging in certain prohibited activities before the pricing of secondary offerings. FINRA will continue to aggressively monitor firms for adherence to Rule 105's requirements and adequate supervisory systems to ensure such compliance."

In concluding this settlement, Citigroup neither admitted nor denied the charges, but consented to the entry of FINRA and BATS' findings.

[1] The settlement with BATS will become final and conclusive on April 9, 2014, unless called for review pursuant to BATS Rule 8.10(c).

Comments: (0)

Comment on this story (membership required)

Related company news

 

Related blogs

Create a blog about this story (membership required)
Visit aciworldwide.comhttp://www.financialcrimerisk.fiserv.com/aml?r=finextraVisit VocaLink.com

Who is commenting?

A Finextra member Finextra Member Commented on: Guesswork alone can cr...
A Finextra member Finextra Member Commented on: Guesswork alone can cr...
A Finextra member Finextra Member Commented on: Guesswork alone can cr...

Top topics

Most viewed Most shared
OCC to offer fintech firms bank charter statusOCC to offer fintech firms bank charter st...
6241 views comments | 23 tweets | 15 linkedin
Guesswork alone can crack Visa card security - Newcastle UniversityGuesswork alone can crack Visa card securi...
6169 views comments | 14 tweets | 23 linkedin
Bank CEOs fret about ROI as startups drive IT arms raceBank CEOs fret about ROI as startups drive...
6124 views comments | 16 tweets | 21 linkedin
Amazon signs up tech firms to financial services cloud programmeAmazon signs up tech firms to financial se...
5949 views comments | 14 tweets | 15 linkedin
R3 and Calypso to develop blockchain trade confirmation systemR3 and Calypso to develop blockchain trade...
5794 views comments | 13 tweets | 13 linkedin

Featured job

to Six-Figure Base, Commission, Benefits
London, UK

Find your next job