A Citigroup Inc. brokerage unit’s failure to run adequate background checks on thousands of employees led to three individuals who’d been convicted of crimes working for the firm, an industry regulator said.
Citigroup Global Markets Inc. insufficiently screened 10,400 workers from January 2010 until May 2017, triggering a $1.25 million fine, the Financial Industry Regulatory Authority said in a Monday statement. At least 520 of the employees weren’t finger-printed. All the workers were non-registered, meaning they weren’t brokers.
“Finra member firms must live up to their responsibility as a gatekeeper protecting investors from bad actors,” said Susan Schroeder, executive vice president of the regulator’s enforcement division. “It is important that firms appropriately screen all employees for past criminal or regulatory events that can disqualify individuals from associating with member firms, even in a non-registered capacity.”
Citigroup Global Markets didn’t admit or deny the allegations, and the firm self-reported the alleged infractions to Finra. A Citigroup spokeswoman said the firm is pleased to have the matter resolved.
JPMorgan Chase settled similar allegations with the industry backed regulator in 2017.
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