Citigroup Global Markets fined $1.25 million for screening failures

Finra says three individuals with criminal convictions worked for the firm due to inadequate background checks.

The Financial Industry Regulatory Authority Inc. has fined Citigroup Global Markets $1.25 million for failing to conduct timely or adequate background checks on approximately 10,400 nonregistered personnel between 2010 and 2017.

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Finra also said that Citigroup did not fingerprint at least 520 of the 10,400 employees until after they began their association with the firm, which prevented Citigroup from determining whether any of them were subject to statutory disqualification from associating with a Finra member firm. In addition, the firm was unable to determine whether it fingerprinted at least an additional 520 non-registered persons in a timely manner, Finra said.

While Citigroup fingerprinted other nonregistered associated persons, it failed to screen them as required by federal securities laws, instead limiting its screening to what was required by federal banking laws, Finra said. Because of these failures, Finra found that three individuals who were subject to statutory disqualification because of criminal convictions were allowed to remain associated with the firm between 2010 and 2017.