LAWFUEL – The Law Newswire — Citigroup Inc.’s Smith Barney unit on Tuesday was fined $50 million by the New York Stock Exchange’s regulatory arm for market-timing violations, Market Watch reports.
Of the $50 million total, $5 million will go to the state of New Jersey in connection with a separate regulatory matter arising out the same conduct.
The NYSE said Citigroup failed to supervise trading of mutual fund shares and variable annuity mutual fund sub-accounts between January 2000 and September 2003. Citi also failed to prevent violative market timing by its brokers, and failing to maintain adequate books and records.
Citigroup was ordered to pay $40 million in compensation to customers.
“Member firms that inadequately supervise their businesses run the risk of disgorging profits and paying additional penalties,” Susan L. Merrill, the NYSE’schief of enforcement, said in a statement. “The issuance of internal policies and memoranda is not enough: they must be effectively enforced. Actions must follow words.”
