Corrective Action Report

Citigroup Global Markets Hit With $500000 Fine in FINRA Failure to ...

On August 25, 2009 , the Financial Industry Regulatory Authority (“FINRA”) announced that it had barred from the securities industry Tamara Lanz Moon (a former sales assistant for Citigroup Global Markets Inc. (“CGMI”) at the firm’s Palo Alto, California, branch office) for wrongfully taking over $850,000 in funds from at least 22 customers, whom FINRA found she had targeted because they were elderly, ill, or otherwise vulnerable and unable to monitor their accounts.  FINRA additionally charged her with falsifying numerous account records, engaging in unauthorized trades in customer accounts and related recordkeeping violations. 

In furtherance of her scheme, Moon forged signatures on letters of instruction requesting unauthorized address changes, trades and transfers between and to accounts controlled by Moon for the purpose of paying her personal expenses, remodeling her home and making personal investments in other real estate properties. In settling this matter, Moon neither admitted nor denied the charges, but consented to the entry of FINRA’s findings.  Citigroup compensated the victims.

That was August 2009.

And then the days fall off the calendar and the hours tick by.  Not six months. Not a year. Nearly two years come and go.  Then, as if awakened from a deep slumber, FINRA takes some belated action against CGMI as a result of allegations arising, in part, from the Moon fiasco.

For the purpose of proposing a settlement of alleged rule violations and without admitting or denying the findings, CGMI submitted a Letter of Acceptance, Waiver and Consent (“AWC”) to FINRA, which the self-regulatory organization accepted.  (AWC 2008013231502, August 9, 2001).

SIDE BAR : CGMI is a wholly-owned, New York City-based subsidiary of Citigroup Financial Products, Inc. and indirectly is a wholly-owned subsidiary of Citigroup, Inc. CGMI, a full-service broker-dealer, provides a full range of financial services including investment banking, underwriting debt and equity securities and providing financial advice to corporate and institutional clients. Among such services, CGMI trades securities for institutional and retail customers and proprietary accounts.

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