In one of its final regulatory acts before being folded into the NASD, the New York Stock Exchange’s regulatory unit has censured and fined Smith Barney $50 million over illegal trades, failures to supervise and record-keeping violations. The firm agreed to the sanctions without admitting or denying the charges.
The Smith Barney unit of Citigroup Global Markets Inc. will pay a fine of $10 million to the NYSE, and a fine of $5 million to the State of New Jersey, related to a “separate regulatory matter arising out of the same conduct.” An additional $35 million will be paid into a restitution fund to compensate victims.
The NYSE regulators say Smith Barney agreed to these huge sanctions to resolve charges related to a variety of fraudulent trading activities, including excessive trading, improper trading in mutual fund shares, improper trading in variable annuity mutual fund sub-accounts, illegal market timing trades, plus the firm’s failures to supervise and to maintain adequate books and records.
The market timing charges also included deceptive acts to conceal the identities of the brokers involved as well as their customers, said the NYSE adding that, during a two year period, Citigroup financial consultants engaged in 250,000 market timing trades, generating approximately $32.5 million in gross revenues.
Shepherd Smith and Edwards represents investors nationwide in claims against members of the securities industry. We have helped numerous clients to recover in claims against both Smith Barney and Citicorp. To learn whether we can also assist you to recover contact us to arrange a free consultation with one of our attorneys.