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Citigroup will pay $10.5 million for internal controls failures

Joe Mont | August 16, 2018

The Securities and Exchange Commission on Thursday announced that Citigroup has agreed to pay $10.5 million in penalties to settle two enforcement actions involving its books and records, internal accounting controls, and trader supervision.

The charges stem from $81 million of losses due to trader mismarking and unauthorized proprietary trading and $475 million of losses due to fraudulently induced loans made by a Mexican subsidiary. 

In the first action, Citigroup Inc. and its U.S. broker-dealer subsidiary Citigroup Global Markets Inc. (CGMI) agreed to pay a $5.75 million penalty to settle charges of inaccurate books and records and CGMI’s failure reasonably to supervise traders.

Citigroup and CGMI settled without admitting or denying the SEC’s findings and agreed to cease and desist from future violations. 

The SEC found that from 2013 to 2016, three CGMI traders mismarked illiquid...

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