Citigroup Global Markets Inc. (CRD #7059, New York, New York) was fined $225,000 and “required to revise its supervisory system and WSPs” according to FINRA. This fine was brought down upon the firm because they allegedly conducted a short sale without having borrowed a security or documented compliance for the sale.
The Citigroup Global Markets Inc. had multiple counts of alleged instances of oversight including that they:
- “Failed to establish, maintain and enforce written policies and procedures reasonably designed to prevent the execution or display of a short sale order in a covered security
- Failed to report short sale exempt transactions in the NMS stocks to a FINRA trade reporting facility with the appropriate short sale exempt modifier
- Failure to include the short sale exempt modifier when it reported the non-media legs of riskless principal transactions to the trade reporting facility
- Erroneously reported short sales to a FINRA trade reporting facility as long sales
- the firm’s WSPs failed to provide guidance as to how the primary supervisor would conduct his or her review for locate compliance for securities that were not on an easy to borrow list
- the firm’s review process did not call for evidence that reviews were actually conducted”. (FINRA March 2020 Disciplinary Actions)
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