A unit of Citigroup was fined about $44.7 million by the Hong Kong Securities and Exchange Commission (SFC).
The allegation alleges that some of the bank’s stockbrokers misled investors for more than a decade by not making it clear whether they conducted transactions on the Hong Kong stock exchange with other large institutions or traded them individually.
Market participants generally prefer the first approach, known as agency trading, to facilitation trading, in which the bank takes positions using its own capital.
“The SFC considers that this widespread dishonest behavior would not have continued had it not been for serious lapses and deficiencies in its internal controls, compliance function and management oversight,” said the regulator, who also vowed to prosecute former Citi employees involved in the transactions.
Reference: CNN Brasil
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