Citigroup Settles Risky Advice Charges
Posted Jun 7, 2007 9:39 AM CST
By Debra Cassens Weiss
Citigroup Global Markets Inc. will pay $15.2 million to settle accusations it misled BellSouth employees about potential investment returns.
The firm will pay $12.2 million in restitution to more than 200 employees and $3 million to settle allegations by the National Association of Securities Dealers, according to the Wall Street Journal (sub. req.).
The NASD claims Citigroup division Smith Barney held seminars for BellSouth employees that advised them to cash out their pensions and 401(k) plans and reinvest the money for a 12 percent annual return. The financial advisers did not explain the risks, the NASD said.
The firm did not admit or deny the charges.