On July 12, 2016, after undergoing an investigation by the Securities and Exchange Commission (SEC) regarding a computer coding error that caused Citigroup Global Markets to provide the agency with incomplete “blue sheet” information about trades it executed from May 1999 to April 2014, the Manhattan-based investment banking and financial services firm agreed to admit wrongdoing and pay a $7 million penalty, the largest penalty to date for blue sheet violations.
This penalty stemmed not only from Citigroup’s failure to promptly notify the SEC of the errors, which resulted in an omission of 26,810 securities transactions from its responses to more than 2,300 blue sheet requests by the SEC, but also its failure to rectify the situation by providing the omitted trading data to the SEC. The financial services firm was aware of the incomplete date for nine months prior to notifying the SEC.
“Broker-dealers have a core responsibility to promptly provide the SEC with accurate and complete trading data for us to analyze during enforcement investigations,” said Robert A. Cohen, Co-Chief of the SEC Enforcement Division’s Market Abuse Unit. “Citigroup did not live up to that responsibility for an inexcusably long period of time, and it must pay the largest penalty to date for blue sheet violations.” 1
The regulators have made it abundantly clear that firms must be transparent and provide accurate and complete information – to both regulators and their clients. In order to do so, it is essential for firms to have a strong internal control system. Jacko Law Group, PC (“JLG”) can review and asses your firm – through mock SEC examinations, focused reviews and internal control system analysis – to help advance your regulatory reporting efforts. For more information or to speak with one of our securities attorneys, please contact us at firstname.lastname@example.org or (619) 298-2880.
1 SEC: Citigroup Provided Incomplete Blue Sheet Data for 15 Years. (2016, July 12). Retrieved July 14, 2016, from http://www.sec.gov/news/pressrelease/2016-138.html