Citigroup settles with NASD for $15.2M

Citigroup Inc. agreed to pay $15.2 million to settle claims with NASD that its brokers misled employees of BellSouth Corp.
The New York-based bank was fined $3 million to settle charges and was ordered to pay more than $12.2 million in restitution to more than 200 former employees of Atlanta-based BellSouth in North Carolina and South Carolina.
Citigroup and its workers agreed to settle the case without admitting or denying any wrongdoing.
NASD found that brokers at Citigroup Global Markets used misleading sales materials during dozens of seminars and meetings to tell the BellSouth employees to cash out their pensions and 401(k) accounts.
As a result of these presentations, more than 400 BellSouth employees opened over 1,100 accounts with the Citigroup brokers.
Most of the employees were unsophisticated investors with minimal experience in the financial markets who retired short of BellSouth retirement age of 62.
NASD said that it also suspended three brokers and two branch managers at a Citigroup branch office in Charlotte, N.C. , fined them a total of $295,000 and levied suspensions ranging from 30 days to 18 months.

Related Topics: NASD