The Financial Industry Regulatory Authority said it ordered Citigroup Inc. (C) to pay more than $1.2 million in fines, restitution and interest related to alleged excessive markups and markdowns on corporate and agency bond transactions.
Finra said that from July 2007 to September 2010, Citi International Financial Services LLC, a subsidiary of the global bank, charged bond markups and markdowns that Finra found to be excessive compared to market conditions, the value of the service rendered and other factors. Also, from April 2009 through June 2009, the unit allegedly failed to use reasonable diligence in buying and selling corporate bonds, so the resulting prices to its customers weren’t as favorable as possible under market conditions, Finra said.
The subsidiary’s supervisory system was found to have significant deficiencies relating to the markdowns and markups, the amounts taken from a selling price or added to a buying price, respectively, Finra said