Citigroup Global Markets has been fined $500,000 by the Financial Industry Regulatory Authority (Finra) for failure to supervise a former registered sales assistant, Tamara Moon, who allegedly engaged in unauthorized trades.
According to Finra, Moon misappropriated $749,978 in funds from 22 customers, falsified account records and engaged in unauthorized trades in customer accounts over an 8 year period.
Finra found that Citigroup failed to detect or investigate a series of exception reports highlighting conflicting information in new account applications and suspicious transfers and disbursements of funds between unrelated accounts.
Citigroup also failed to implement reasonable systems and controls regarding the supervisory review of customer accounts.
Finra Executive Vice President and Chief of Enforcement Brad Bennett said that Citigroup had the right to know Tamara’s misdoings and could have taken steps to refrain her from further frauds.
"Tamara Moon used her knowledge of Citigroup’s lax supervisory practices at the branch to take advantage of some of the firm’s most vulnerable customers, including the elderly," Bennett added.
FINRA said that Moon was previously stopped for her actions but Citigroup neither admitted nor denied the charges, but consented to the entry of FINRA’s findings.
Jessica Hopper, Anthony Trambley and Sandra Del Buono had conducted the FINRA’s investigation.