Citigroup ordered to pay $3.1m for 'selling away'

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A Citigroup unit must pay $3.1m to a Florida-based couple who alleged the firm did not properly supervise a broker who steered them to invest in a politician's real estate developments that later went broke, a securities arbitration panel has ruled.

Reuters reports that the case is an example of the liabilities that brokerages can face when their advisers peddle investments privately, without the firm's knowledge. Securities industry rules prohibit the practice, known as 'selling away'.

Dr. Nasirdin Madhany and his wife, Zeenat Madhany, of Orlando, Florida, filed the case in 2010, alleging negligence, fraud and other misdeeds involving more than $1m in real estate investments they made between 2004 and 2007, according to a Financial Industry Regulatory Authority arbitration panel award dated Monday. The couple's family trust was also a party.

The arbitration panel found Citigroup liable.

'We disagree with the award which was not supported by the facts or law', a Citigroup spokeswoman said.

To access the complete Reuters article hit the link below

Citigroup must pay couple $3.1 million for not overseeing broker: panel

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