Citigroup Global Markets and Morgan Stanley Smith Barney agreed to pay
over $2.96 million each in order to settle charges filed against them
by the United States Securities and Exchange Commission (SEC). According
to the federal agency, the firms made misleading and false statements
to investors during sales pitches about a foreign exchange trading program.
The SEC stated that registered representatives from both firms pitched
CitiFX Alpha, a foreign exchange trading program, to customers between
August of 2010 and July of 2011. Following the SEC’s investigation,
they found that verbal and written presentations were based on past risk
and performance metrics that failed to inform investors that every trade
would be charged markups and that they could enter the program with far
more leverage than they were otherwise told. This failure to disclose
allegedly cost investors a significant amount of money.
"Citigroup and Morgan Stanley sold securities in a complex trading
program without giving certain investors important information about the
risks and costs of the program,” said Eric I. Bustillo, Director
of the SEC’s Miami Regional Office. “Investors simply cannot
be sold investments based on disclosures that are inaccurate or incomplete."
The SEC found that Citigroup and Morgan Stanley Section 17(a)(2) of the
Securities Act of 1933. Without admitting or denying the SEC’s findings, both firms agreed
to pay more than $5.9 million combined in penalties, disgorgement and interest.
If you lost money after investing in the foreign exchange trading program
CitiFX Alpha, contact our securities fraud attorneys at Meyer Wilson today.
We have recovered more than $350 million in verdicts and settlements for
our clients since first opening our doors, and are committed to providing
each new client we accept with the passionate and knowledgeable legal
representation they require in their time of need. Give us a call at one
of our four office locations, or
fill out our online form to request a free case consultation today.