Indiana Securities Division reaches agreement with Citigroup Global Markets over supervisory matter
FOR IMMEDIATE RELEASE
November 8, 2010
Division believes investment company violated Indiana Securities Act for not properly monitoring investment transactions of a former agent
INDIANAPOLIS (Nov. 8, 2010) – Following a nearly three-year investigation by the Indiana Securities Division, CitiGroup Global Markets – an arm of CitiGroup – agreed, without admitting fault, to pay fines, restitution and other costs totaling $717,000 for not properly supervising a former agent.
In a consent agreement signed recently by both parties, Citigroup Global Markets consented to pay the Indiana Securities Division $400,000 in fines, $142,000 in restitution and $175,000 in other costs.
“This is one of the largest fines levied against one company by the Securities Division,” Indiana Secretary of State Todd Rokita said. “This fine is a consequence of what we believe is the company’s failure to supervise an investment situation affecting Hoosiers. We take seriously a company’s role as a supervisor of their agents in all financial matters involving Indiana investors.”
The investment banking company’s agreement to pay the fines and penalties stems from allegations the company failed to monitor its former agent, Mark Singer. Singer was a registered representative of Smith Barney, a former branch of Citigroup Global Markets. He is currently awaiting trial in Marion County after being accused of working with Robert Nelms, a man who pled guilty to securities fraud offenses involving a $24 million cemetery trust fund in Indiana. Singer is also awaiting trial in Tennessee.
Under Indiana Code 23-19-4-12(d)(9), companies are responsible to “reasonably supervise an agent, investment adviser representative, or other individual.” Companies failing to keep proper supervision of their advisers, even for non-company related business, may be subject to disciplinary consequences by the Indiana Securities Division.
Todd W. Darroca
Director of Communications