Citigroup Fined, Former Broker Banned

The Wall Street Journal reports that Citigroup Global Markets (formerly Salomon Smith Barney) has been fined $1m by The New York Stock Exchange for the way its financial advisors handled the accounts of WorldCom employees.

Brokers at Citigroup's Atlanta office were accused of recommending 'unsuitable stock options strategies' to certain WorldCom employees, several of whom lost substantial sums when the company shares bombed after revenue problems came to light last year. WorldCom subsequently went into Chapter 11 bankruptcy and company stock, once worth $180bn, was almost worthless. Citgroup will pay up without admitting liability.

In a related story, Dow Jones Newswires reports that a former stockbroker with Smith Barney Citigroup in Australia has been permanenly banned from the securities industry following an investigation by the Australian Securities & Investments Commission. The broker is said to have been fired by Smith Barney in May for 'conducting discretionary trading on two client accounts'. The regulator is believed to have found evidence that the former broker open a brokerage account using a false name by means of a fake driving license.

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