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Citi settles SEC charges over bad controls, supervision

Published 08/16/2018, 12:00 PM
© Reuters. The Citigroup Inc logo is seen at the SIBOS banking and financial conference in Toronto

WASHINGTON (Reuters) - Citigroup (NYSE:C) agreed to pay $10.5 million to settle two separate complaints, one relating to bad loans made by its Mexican subsidiary, Banamex, between 2008 and 2014, U.S. regulators said on Thursday.

The other concerned a trader mismarking illiquid positions and unauthorized proprietary trading by Citigroup Global Markets Inc (CGMI) from 2013 to 2016, the Securities and Exchange Commission said.

"Fraudulently-induced loans" made by Banamex to Oceanografia that led to $475 million in losses were the result of inadequate controls that prevented them from registering 'numerous red flags' in the borrower's documents," the SEC said in a statement.

The regulator also said inadequate supervision allowed CGMI traders to mismark illiquid positions and cover up $81 million in losses.

"We are pleased to have these matters resolved," Danielle Romero-Apsilos, a spokeswoman for Citi Global said in an email.

Citigroup and CGMI settled the allegations without admitting or denying the SEC's findings.

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