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Citigroup to Pay US$7 Million Penalty for Providing Incomplete Data to SEC

The U.S. Securities and Exchange Commission (SEC) has slapped a US$7 million fine on Citigroup to settle charges that a computer coding error caused the firm to provide the agency with incomplete 'blue sheet' information about trades it executed. The snafu occurred in the software that Citigroup used from May 1999 to April 2014 to process SEC requests for blue sheet data, including the time of trades, types of trades, volume traded, prices, and other customer identifying information. During that 15-year period, Citigroup consequently omitted 26,810 securities transactions from its responses to more than 2,300 blue sheet requests.

After discovering the coding error, Citigroup failed to report the incident to the SEC or take any steps to produce the omitted data until nine months later. SEC said that broker-dealers have a core responsibility to promptly provide the SEC with accurate and complete trading data for them to analyze during enforcement investigations. Citigroup did not live up to that responsibility for an inexcusably long period of time, and it was liable to pay the largest penalty to date for blue sheet violations. Previous violations of blue sheet trade reporting due to botched coding cost Credit Suisse Securities US$4.25 million in September 2015, and Scottrade US$2.5 million in January 2014.

News Characteristics

Date : Jul 14, 2016
Region : North America
Industry : Banks
Function : Risk Management
Sub-Function : Fraud Management