ZCZC
BCN-08
US-BANKING-CITIGROUP
Citgroup to pay $12 mn in US for misleading on ‘dark pool’
NEW YORK, Sept 15, 2018 (BSS/AFP) – US securities regulators announced
Friday that Citigroup would pay $12 million for misrepresenting practices on
a private exchange to clients.
The Securities and Exchange Commission charged Citigroup with falsely
leading users to believe high-frequency traders were not permitted on Citi
Match, a premium-priced “dark pool,” a private marketplace separate from the
New York Stock Exchange and other public markets.
In fact, two of Citi Match’s most active users were high-frequency traders
and executed more than $9 billion in orders on the exchange, the SEC said.
Large investors like dark pools as a way of commissioning transactions
without swaying prices and boosting the cost of their orders. But the venues
have been criticized for lack of transparency.
The SEC also said Citigroup failed to disclose that trades were routed to
other platforms, including other dark pools.
Citigroup sent orders saying the orders had been executed on Citi Match
when they had been put through on other venues, the agency said.
“Market participants deserve to make informed decisions about where they
execute their orders,” said Joseph Sansone, head of the SEC’s enforcement
group’s market abuse unit.
“All trading venues, regardless of their trade volume, must ensure that
their users have accurate information, particularly about key issues like
order routing.”
Citigroup did not admit or deny the charges but agreed to be censured as
part of the settlement, the SEC said.
BSS/AFP/HR/0942