When it received a wage garnishment order, the firm would contact the rep and rely on the rep and rely on his or her determination whether the wage garnishment order was the result of a reportable event, Finra said.
“The firm did not conduct a further inquiry, nor did it do an independent review, to determine if the underlying event triggering each garnishment order involved a disclosable event,” the regulator said.
Citigroup has subsequently revised its supervisory system, including written procedures, to address the deficiencies identified.
This is not the first time Citigroup has been fined by Finra for failing to report its reps’ material transgressions. The firm was fined $150,000 in 2010 for submitting 120 inaccurate U5s (Uniform Termination Notice for Securities Industry Registration) filings that did not properly disclose situations where reps had resigned or been terminated following allegations of violations related to investment-related rules, fraud, theft or failure to supervise, Finra said.