Brokerage Firm Review: Citigroup Global Markets Inc.

Citigroup Global Markets Inc. (“Citigroup Global Markets”) (CRD#7059) has many different complaints filed by FINRA (Financial Industry Regulatory Authority), state regulatory organizations, and investors such as yourself. At the Law Offices of Robert Wayne Pearce, we have investigated Citigroup Global Markets, its regulatory and customer complaints, and have also represented investors with claims of fraud, negligence, and breach of fiduciary duty against this organization and its financial advisors.

If you believe you have a claim against Citigroup Global Markets, you should strongly consider hiring an investment fraud lawyer. You should not wait until it’s too late to file a claim. The Law Offices of Robert Wayne Pearce, P.A., offers free consultations. Give us a call at 800-732-2889. Let’s discuss your case and see what we can do to help you get the compensation you need and deserve.

Can I Sue Citigroup Global Markets?

If you’ve lost money caused by Citigroup Global Markets and/or its employees’ misconduct then the answer is, YES, you can sue Citigroup Global Markets, but the odds are you signed away your right to sue in court and agreed to resolve your dispute in a FINRA arbitration proceeding. Attorney Robert Wayne Pearce has over 40 years of personal experience in FINRA arbitration proceedings and knows very well how you can not only sue Citigroup Global Markets in FINRA arbitration proceedings but WIN that arbitration. The easiest way to know if you have a viable case against Citigroup Global Markets is to call Attorney Pearce at our office at 800-732-2889.

Investment Losses? We Can Help

Discuss your legal options with an attorney at The Law Offices of Robert Wayne Pearce, P.A.

Get A Free Consultation

or, give us a ring at (800) 732-2889.

What is Citigroup Global Markets?

Citigroup Global Markets (CRD#7059) is a registered broker-dealer. It operates as a full-service broker-dealer, providing a range of financial products and services to individual investors and financial advisors.

As a registered broker-dealer, Citigroup Global Markets is subject to regulations and oversight by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). It is required to comply with industry standards and regulations to ensure the protection of its clients’ interests.

A failure to comply with industry standards by either its brokers or the firm itself can result in disciplinary actions, fines, or other penalties imposed by regulatory authorities.

Citigroup Global Markets Has Many Different Regulatory Problems 

Citigroup Global Markets’ rapid growth has not been without consequences. There have been approximately 570 state and self-regulatory body disclosure events; that is, final and formal proceedings initiated by a regulatory authority (e.g., a state or federal securities agency like the U.S. Securities and Exchange Commission (SEC) or self-regulatory body like the Financial Industry Regulatory Authority (FINRA) and the North American Securities Administrators Association (NASAA) for a violation(s) of investment-related rules or regulations. In addition, there have been hundreds of customer complaints filed against Citigroup Global Markets for misconduct by its securities sales and investment advisory representatives that are not reported by the firm on its Central Depository Record. 

We have reported and written about these regulatory problems and customer complaints over many years. Citigroup Global Markets is a repeat offender: there are over 570 FINRA-reported proceedings citing the firm with one form of supervisory lapses or another.

A Brief Overview of Some of the Regulatory Problems Citigroup Global Markets Has Faced Over the Years*

Citigroup Global Markets has been repeatedly censured, warned, and fined multi-millions of dollars for its own misconduct and failure to supervise its army of financial advisors.* A few of the notable FINRA Sanctions for its Supervisory Failures are below:

FINRA Censures and Fines Citigroup Global Markets for Inaccurate Trade Confirmations to Customers

Brief Overview: Without admitting or denying the findings, the Citigroup Global Markets consented to the sanctions and to the entry of FINRA findings that it issued inaccurate trade confirmations to customers in connection with its principal trading activity on its alternative trading system. FINRA stated that the firm inaccurately reported its execution capacity as agent when, in fact, the firm acted in a principal capacity. The firm was censured and fined $250,000.

FINRA Censures and Fines Citigroup Global Markets for Failure to Amend Form U4 of 43 Registered Representatives

Brief Overview: Without admitting or denying the findings, Citigroup Global Markets consented to the sanctions and to the entry of FINRA findings that it failed to amend the uniform application for securities industry registration or transfer (Form U4) of 43 registered representatives to disclose unsatisfied tax liens and judgments and failed to establish and maintain a supervisory system and written supervisory procedures reasonably designed to ensure that it disclosed unsatisfied liens or judgments on U4s when the firm received a wage garnishment order. FINRA stated that the firm failed to conduct a sufficient inquiry to determine if the underlying event triggering each garnishment order involved a disclosable event that should have been reported on the registered representative’s U4. Citigroup Global Markets failed to file the required U4 amendments, or filed them late, because although it had a system in place to determine whether the wage garnishment orders arose from a disclosable lien or judgment, the system was not reasonably designed. The firm simply relied on the representatives as to whether it was a reportable event. As a result, the firm was censured and fined $375,000.

FINRA Censured and Fines Citigroup Global Markets for Failure to Implement Supervisory System to Monitor Employee Trading

Brief Overview: Without admitting or denying the findings, Citigroup Global Markets consented to the sanctions and to the entry of FINRA findings that its supervisory system was not reasonably designed to ensure that employees timely uploaded statements and that the firm reviewed employees’ personal trading. FINRA stated that the firm failed to promptly request statements appearing on the missing statement exception reports, and it failed to formally discipline employees who were significantly and repeatedly delinquent in uploading their statements. Hence, the firm had incomplete records from which to conduct its review, resulting in its failure to timely identify instances where employees did not appropriately pre-clear transactions in violation of its personal employee trading policy. As a result, the firm was censured and fined $350,000.

FINRA Sanctions Citigroup Global Markets For Not Supervising 529 Savings Plans

Brief Overview: Without admitting or denying the findings, Citigroup Global Markets consented to the sanctions and to the entry of FINRA findings that it failed to establish and maintain a supervisory system reasonably designed to supervise representatives’ recommendations to customers to purchase particular share classes of 529 savings plans. Specifically, FINRA stated the firm’s supervisory system was not reasonably designed to supervise 529 share-class recommendations executed through transactions made directly with plan fund companies. Representatives were allowed to establish and effect sales in 529 plan accounts through both its internal order entry and account system, as well as through off platform transactions conducted directly with 529 plan fund companies. For the 529 plan accounts and transactions that occurred off-platform, which was more than most of the firm’s 529 plan business, the firm did not consistently apply the same level of supervisory review and approval. If firm representatives did not take additional and voluntary steps to create a shell account that would link off-platform 529 plan business with the firm’s internal order entry and account system, supervisors lacked information necessary to oversee those accounts and transactions. As a result, Citigroup Global Markets was censured and paid restitution of $514,932.

NYSE Censured and Fines Citigroup Global Markets for Failure to Comply with Due Diligence and Best Execution for Customer Order

Brief Overview: Without admitting or denying the findings, Citigroup Global Markets consented to the sanctions and to the entry of NYSE findings that it failed to comply with its due diligence and best execution obligations with respect to its handling of a customer order. The investigation was initiated by the NYSE found that a trade was executed at a higher price than what was originally quoted and available to the customer. This resulted in customer harm in the amount of $18,000. In determining to resolve this matter, the NYSE regulation took into consideration that the firm offered restitution to its customer in the amount of $18,000. Citigroup Global Markets was also censured and fined $95,000.

Why Does Citigroup Global Markets Have So Many Regulatory Problems And Customer Complaints?

Independent broker-dealers are notorious for their lax supervisory practices and procedures. The business model of these franchise type operations is to open many offices nationwide for steady growth of fixed monthly revenues without the costs attendant to a full-service branch office with on-site manager, compliance officer and operation personnel. The registered representatives of these independent broker-dealers generally operate as separately incorporated businesses. They are not employees of the broker-dealer and therefore not controlled in the same manner as full-service brokerage firm representatives. The registered representatives control their structure and costs to maximize profits and often leave the protection of investors’ rights and interests as their lowest priority.

The typical supervisory organization of independent broker-dealer operations is to have other independent contractors operate Offices of Supervisory Jurisdiction (OSJs) to monitor the registered representatives from geographically remote offices and then report to the main franchisor’s compliance office at national headquarters. The supervisors at the OSJs are not employees of the franchisor and often run their own brokerage, insurance and other businesses. They are not devoted full-time supervisors of the smaller branch offices. Consequently, OSJ managers cannot and do not supervise the day-to-day operations of the registered representatives of these Independent broker-dealers. 

Generally, there is no immediate review of new accounts opened, securities transactions, business records, cash or securities receipts and deliveries, correspondence and business activities unrelated to the securities brokerage operation at these independent brokerage firms. The lax supervision leaves investors who have transferred their accounts to the smaller independent broker-dealer vulnerable to sales of securities that have not been reviewed or authorized by anyone other than the sales representative earning a commission. There may be no one onsite to detect forgeries of clients’ signatures on documents, the placement of inaccurate information about a client’s investment objectives and financial condition to document the suitability of a particular investment recommendation. Oftentimes there is no daily review of sales literature and client correspondence to protect against misrepresentations and misleading statements being made to investors. In fact, it is not unusual for there to be only one compliance audit visit per year at many of these offices.

These Independent brokerage business operations are worrisome to the North American Securities Administrators Association (NASAA), which has documented more instances of sales abuse and consequently investor losses at these firms than the traditional brokerage firms with branch offices with on-site managers and compliance personnel.

Did Citigroup Global Markets Advisor Misconduct Cause You Investment Losses?

When financial advisor misconduct has caused you to lose substantial value to your investment accounts, you have the right to seek reimbursement from the responsible parties. Citigroup Global Markets is responsible like any employer for its financial advisors acts and omissions. In addition, it has an independent duty to supervise its stockbrokers and investment advisors. These cases can be extremely complex, and so having the support of a reputable attorney who is experienced in recovering investment losses for investors is key to your success. Many customers make the mistake of contacting Citigroup Global Markets without representation with an attorney about their complaints and have their complaints denied.

Related Read: Can You Sue Your Brokerage Firm?

Investment Losses? We Can Help

Discuss your legal options with an attorney at The Law Offices of Robert Wayne Pearce, P.A.

Get A Free Consultation

or, give us a ring at (800) 732-2889.

Consult With An Attorney Who Recovers Investment Losses Caused By Citigroup Global Markets Today!

The investment loss attorneys at The Law Offices of Robert Wayne Pearce, P.A., have helped countless investors over the last 40 years recover the losses from their investment accounts that were caused by broker negligence or misconduct. The firm has extensive experience with Citigroup Global Markets cases, and Attorney Pearce is committed to seeing that those responsible for the losses you have suffered are held fully accountable.

Give us a call at 800-732-2889. Let’s discuss your case and see what we can do to help you get the compensation you need and deserve.

Robert Wayne Pearce

Robert Wayne Pearce of The Law Offices of Robert Wayne Pearce, P.A. has been a trial attorney for more than 40 years and has helped recover over $170 million dollars for his clients. During that time, he developed a well-respected and highly accomplished legal career representing investors and brokers in disputes with one another and the government and industry regulators. To speak with Attorney Pearce, call (800) 732-2889 or Contact Us online for a FREE INITIAL CONSULTATION with Attorney Pearce about your case.

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