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Date Issue Title
28th Jun 2005 Other Issue Citigroup fined 14m by UK watchdog

Citigroup, the US owner of Citibank, is to be fined 13.9m ($25.31m) by the UK's Financial Services Authority (FSA) after a controversial bond trade.

The firm caused other City firms to lose money when it dumped a larger than usual number of eurozone bonds on the market, forcing prices down.

The fine is the largest penalty imposed on a financial firm by the FSA for a breach of market rules.

It is more than triple that of CSFB's 4m fine, the FSA's previous record.

"It is substantially larger, which indicates how unhappy we were," said Rob McIvor, a spokesman for the FSA.

"What they did was careless and irresponsible and they have been fined accordingly."

The FSA said that the firm had lacked adequate controls.

However, in March, German prosecutors decided not to prosecute traders at Citigroup for the same event, saying there was insufficient evidence of criminal wrongdoing at the company.

Citigroup made a profit of $18.2m (9.96m) on 2 August, 2004, as a result of the sale of a large cash position in government bonds and the subsequent buy-back of bonds for a lower price.

The 13.96m penalty imposed by the FSA, consists of two elements - Citigroup must relinquish the 9.86m profit it made on the sale and also pay a penalty of 4m.

The fine is the largest imposed by the FSA on a financial firm, however, a 17m fine for oil group Shell for overstating its oil reserves in breach of the listing rules is the biggest it has ever imposed

It is not Citigroup's first run-in with regulators.

The group was forced to close its Japanese private bank after repeatedly breaking local rules. And it agreed to pay out $2bn (1.1bn) to settle a lawsuit brought by shareholders of collapsed energy trading firm Enron earlier this month.

Last year, it settled a $2.6bn lawsuit brought by investors in failed telecoms firm WorldCom, and had to put aside double that amount to cover future legal action.

Other Reports on CitiGroup
Date Issue Company Report
7th Aug 2008 Questionable Practice CitiGroup Citigroup reaches SEC settlement
10th May 2006 Other Issue CitiGroup Citibank overcharged customers in Japan
10th Jun 2005 Fraud Investigation CitiGroup Citigroup pays $2bn in Enron case
25th Jan 2005 Fraud Investigation CitiGroup Criminal probe on Citigroup deals
4th Oct 2004 Fraud Investigation CitiGroup South Korea to scrutinise Citigroup
17th Sep 2004 Questionable Practice CitiGroup Japan closes Citigroup branches
11th May 2004 Fraud Investigation CitiGroup Citigroup settles Worldcom claims
19th Jun 2003 Other Issue CitiGroup Citicorp Brokerage Executive Fired

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