Citigroup Inc. will pay a $1.85 million fine and return more than $638,000 to customers after its securities unit failed to get the best prices for clients in about 22,000 trades over more than three years, the Financial Industry Regulatory Authority said today.

A Citigroup trading desk used manual pricing for non-convertible preferred securities that led the bank to provide customers with prices that were inferior to the national best bid and offer in 14,800 instances, according to Finra’s statement. Citigroup’s order execution system, BondsDirect, also failed to locate the best prices in more than 7,200 cases because it only checked the securities’ primary listing exchange, according to Finra.

“Citigroup lacked the necessary systems and supervision to ensure that it provided customers with the executions they deserved and, as a result, customers were receiving inferior prices for more than three years,” Thomas Gira, executive vice president for market regulation, said in the statement.

Citigroup’s systems and procedures were deficient and the bank failed to perform an adequate review of the transactions, according to Finra’s statement. The New York-based bank neither admitted nor denied the allegations, according to the statement.

“We are pleased to have the matter resolved,” Scott Helfman, a spokesman for the bank, said in an e-mail.