Martin Lee @ Sg
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Citi Asia Fined Over ex-Staff Alleged Ponzi

Came across this enforcement news about the Securities and Futures Commission (SFC) of Hong Kong giving a reprimand to Citigroup Global Markets Asia Limited (Citi Asia) as well as a fine of $6 million for failing to detect a ponzi scheme.

Apparently, a staff at Citi Asia had promised clients guaranteed returns which were fictitious. The returns were actually funded from monies from new clients.

As a result of a failure on the part of Citi Asia to report the incident as soon as it was discovered (they only did so after the investigation had ended), the ex-staff concerned had time to flee the country before SFC could step in.

The supervisor in charge of the staff has also been suspended by SFC for her failure to check on several red flags bought to her attention.

However, it is not all dark and gloomy for the investors. The good news for the affected clients was that all their losses would be compensated by Citi Asia.

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