SEC Levies $2.9 Million Penalty Against Citigroup Over Record-Keeping Violations

The U.S. Securities and Exchange Commission (SEC) has taken action against Citigroup Global Markets Inc, issuing a cease-and-desist order in response to alleged willful violations of record-keeping requirements within the company's underwriting business. The order comes with a $2.9 million penalty, and while Citigroup has agreed to the terms, it has not admitted to the findings.

The U.S. Securities and Exchange Commission (SEC) has announced a cease-and-desist order against Citigroup Global Markets Inc (CGMI), alleging that the financial institution's underwriting business engaged in willful violations of record-keeping regulations. In response to these allegations, Citigroup has agreed to the terms of the order and will pay a penalty of $2.9 million. However, the company has not formally acknowledged the findings.

According to an official statement from the SEC, the enforcement action centers on the period spanning from 2009 through May 2019, during which CGMI utilized an unsubstantiated and unverified method to determine and document indirect expenses linked to its role as an underwriter. The SEC further highlighted that for more than a decade, CGMI did not possess a clear understanding of the foundation of this indirect expense calculation method. The unit failed to conduct a comprehensive review to ascertain the reliability of the approach used.

The cease-and-desist order issued by the SEC underscores the importance of accurate record-keeping and transparency within financial institutions, especially in areas as critical as underwriting. Record-keeping requirements are designed to ensure the integrity and reliability of financial processes and transactions, contributing to market stability and investor confidence.

In response to the SEC's action, Citigroup Global Markets Inc has not contested the order, agreeing to the terms imposed by the regulatory body. However, the company has chosen not to admit to the allegations outlined in the enforcement action. While Citigroup has refrained from offering a comment on the matter, the company's cooperation in resolving the issue highlights its commitment to adhering to regulatory standards.

This development serves as a reminder to financial institutions and industry stakeholders of the significance of maintaining stringent record-keeping practices. By adhering to these practices, financial institutions can uphold accountability, facilitate accurate reporting, and strengthen the overall integrity of the financial system.

For further information and updates, consult official statements from both the U.S. Securities and Exchange Commission and Citigroup Global Markets Inc.

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