Securities regulator Finra fined Citigroup’s capital markets unit $725,000 for
failing to disclose conflicts of interest in stock-research reports and during
public appearances by Citi research analysts. What happened? Well, apparently
Citigroup’s computers weren’t keeping close track of the bank’s clients.
If you’ve ever read a
stock-research report, you know at least half of the pages are packed with
disclosures about the firm issuing the research: whether the bank has ever done
investment-banking work for the company that is the subject of the report, or
whether the analyst has any personal financial stake in the company. All this
disclosure is intended to give investors a glimpse at whether the stock
research is unbiased and independent from company being written about.
But Citigroup had a technology
fail. Finra said in a news release:
FINRA found that Citigroup failed to disclose the required
information because the database it used to identify and create the disclosures
was inaccurate and/or incomplete due primarily to technical deficiencies. In
addition, Citigroup failed to have reasonable supervisory procedures in place
to ensure that the firm was populating its research reports with required
disclosures.
Finra said in agreeing to a
settlement, Citigroup neither admitted or denied the charges, but consented to
the entry of the regulator’s findings. Read More at the WSJ Blog
No comments:
Post a Comment