{"id":18502,"title":"Citigroup Global Markets Fined $11 Million for Faulty Ratings","publisher":"Share Talk","author":"sharetalk","published":"2017-12-29T10:10:29+00:00","modified":"2017-12-29T10:10:29+00:00","canonical_url":"https://www.share-talk.com/citigroup-global-markets-fined-11-million-for-faulty-ratings/","markdown_url":"https://www.share-talk.com/citigroup-global-markets-fined-11-million-for-faulty-ratings.md","json_url":"https://www.share-talk.com/citigroup-global-markets-fined-11-million-for-faulty-ratings.json","category":"Regulatory News","categories":["Regulatory News"],"tags":["Citigroup"],"featured_image":"https://i0.wp.com/www.share-talk.com/wp-content/uploads/2023/11/Stencil-Google-Chrome-2023-04-19-at-2.47.43-PM.jpeg?fit=1231%2C615&ssl=1","format":"news","language":"en-GB","content":"Photo: Reuters\n\n##### **The mistakes affected investment decisions ‎that were based on CGMI’s ratings‎.**\n\n \n\nCitigroup Global Markets Inc. (CGMI) concluded an $11.5 million settlement ‎with the Financial Industry Regulatory Authority (FINRA) to settle charges of ‎inaccurate research ratings of certain equity securities. ‎\n\nAs part of the deal with the Wall Street self-regulator, CGMI recognized ‎that it had mis-published its research ratings to customers on account ‎statements, email alerts and its online portal between from February 2011 ‎through December 2015.‎\n\nThe errors in the ratings feed that CGMI provided to its customers either ‎dropped or showed wrong ratings for some covered securities or ‎displayed ratings for other securities that the firm did not cover.‎\n\nThe mistakes affected the investment decisions based on CGMI’s ratings and violated certain firm-managed portfolio guidelines.‎\n\nWall Street’s industry-funded watchdog was concerned that investors relied on CGMI’s credit ratings to be objective and accurate, and ‎they naturally expected the company to audit its own published research ‎ratings.‎\n\nIn concluding the filing, Finra said that that firm issued ‎inaccurate statements regarding more than 19,000 research ‎ratings. It also emailed more than 1,000 customer alerts with inaccurate ‎ratings and displayed wrong evaluations ‎on online portals available to ‎customers.‎\n\nThe agreement requires CGMI to pay $5.5 million to the watchdog, and at ‎least $6 million in compensation to the affected customers. The settlement ‎also included non-monetary measures, agreed on with the FINRA, designed ‎to ensure the accuracy of future credit ratings the firm issues.‎\n\nThe group has agreed to settle, however, it neither admitted ‎nor denied the charges despite consenting with the order.‎\n\nSusan Schroeder, FINRA Executive Vice President and Head of ‎Enforcement, commented: “Member firms must reasonably ensure that the research ‎rating information that they display and on which they rely to supervise ‎business activities is complete and correct. The display and use of ‎incomplete and inaccurate research ratings can have widespread, adverse ‎consequences to customers. Even when such inaccuracies are caused by ‎technology problems, firms should react quickly to address those errors.”‎\n\nAuthor: Aziz Abdel-Qader | [Regulation](https://www.financemagnates.com/institutional-forex/regulation/) ([ Institutional FX ](https://www.financemagnates.com/institutional-forex/)) "}