itigroup Global Markets Inc. has been ordered to cease and desist from violations of the New Jersey Uniform Securities Law, and to pay the state $5 million in civil monetary penalties under the terms of a consent order announced today by Attorney General Anne Milgram, Consumer Affairs Acting Director Stephen B. Nolan and Bureau of Securities Chief Franklin L. Widmann. The New York Stock Exchange Regulation (“NYSE Regulation”) settled a related matter separately with Citigroup.
The settlement with the Bureau of Securities resolves allegations that Smith Barney -- a division of Citigroup -- failed to reasonably supervise agents engaged in deceptive market timing practices and failed to maintain accurate books and records related to market timing activities.
“The alleged conduct reveals just how harmful the consequences of market timing can be on long-term investors in mutual funds,” Milgram said. “We want this settlement to provide a warning to the industry that deceptive practices will not be tolerated, and that we hope that it spurs other firms to take a hard look at the adequacy and enforcement of their own policies and procedures.”