Citigroup Global Markets Inc. (CGMI) has agreed to pay $250000 and has accepted condemnation in order to reach a settlement with the US Financial Industry Regulatory Authority (FINRA).

According to the regulatory agency's investigation, from October 2016 to July 2020, CGMI issued approximately 37000 inaccurate transaction confirmations to customers, which were related to the company's main trading activities on its Alternative Trading System (ATS) CitiBLOC ATS.

In these transaction confirmations, CGMI reports that it executed the transaction as an agent, but in reality, the company executed the relevant transaction activities as the transaction subject. This behavior violates Rule 10b-10 promulgated under Section 10 (b) of the United States Securities and Exchange Act, as well as Rule 17 (a), Rule 17 (a), Rule 17a -3, and FINRA Rules 2232, 451, and 2010.

Specifically, Rule 10b-10 of the Securities and Exchange Law requires brokers to provide confirmation letters to securities trading clients before or at the completion of each transaction, disclosing certain basic terms of the transaction.

Rule 10b-10 (a) (2) requires the broker to disclose whether it is "acting as the agent of the client, the agent of others, the agent of the client and other clients, or the identity of the broker's own entity" in executing the transaction.

Article 2232 (a) of FINRA requires member companies to provide a written confirmation meeting the requirements of 10b-10 of the Securities and Exchange Act to clients when or before completing any securities transactions on their behalf or through their accounts.

This is the second penalty that CGMI needs to pay in the past month. At the end of August, the company agreed to settle a $2.9 million fine with the United States Securities and Exchange Commission (SEC) for intentionally violating record keeping requirements regarding underwriting business fees.