Due to what was termed a “flawed data feed” Citigroup was slapped with $11.5 million in fines and restitution. The erroneous feed could have led to retail customers seeing false research ratings on hundreds of stocks over a period of five years, according to Wall Street watchdog FINRA.
The Financial Industry Regulatory Authority (FINRA) said last week that errors at Citi’s brokerage unit involved more than 38% of the equity securities that the New York-based bank covered between February 2011 and December 2015. In some cases, stocks were tagged “buy” rather than “sell”, meaning that brokers collected commissions for soliciting transactions that may not otherwise have been ordered.
FINRA stated that the errors sprang from problems with an electronic data feed provided to a clearing firm and that, despite “numerous” red flags, the New York-based bank failed to fix the wrongly displayed ratings which affected more than 1,800 stocks.