Citigroup Global Markets, Inc.

Newark, NJ: (Jul-24-07) The state Attorney General Anne Milgram's Office brought charges against Citigroup Global Markets, Inc., alleging that Smith Barney, a division of Citigroup, did not reasonably supervise agents who practiced market timing. Wall Street traders practice market timing by buying mutual fund shares after important events or market changes, but before the share price changes at the end of the trading day. This practice harms long-term mutual fund investors by increasing the fees and costs they pay and potentially decrease the value of mutual fund shares. The New York Stock Exchange Regulation (NYSE) claimed that the company did not maintain accurate books and records related to market timing activities.

In a settlement reached, Citigroup Global Markets agreed to pay $5 million in civil penalties to the State of New Jersey, $35 million in disgorgement and another $5 million in penalties to the New York Stock Exchange Regulation. The separate settlement with NYSE Regulation will be placed in a distribution fund to compensate allegedly injured customers. The agencies alleged that between Jan. 2000 and Sept. 2003, some Smith Barney agents engaged in more than 250,000 market timing exchanges on behalf of more than 1,100 customers, generating approximately $32.5 million in gross revenues. [LEGAL NEWS LINE: MARKET TIMING]

Legal Help

If you have a similar problem and would like to be contacted by a lawyer at no cost or obligation, please click the link below.
Published on Jul-25-07