FINRA has publicly censured Citigroup Global Markets Inc. (CGMI) and fined the brokerage $250,000 after errors in its revised anti-money laundering procedures left a process for identifying and reporting suspicious activity operating incorrectly for more than a year. The case highlights the importance of putting AML policies into practice: procedures that fail to capture potential fraud can delay both internal review and regulatory reporting.
FINRA cites violations from January 2022 to February 2023
FINRA’s disciplinary record lists November 6, 2026, as the action date for the settlement document, known as an Acceptance, Waiver and Consent (AWC). Under the agreement, CGMI accepted a public censure and a $250,000 fine.
FINRA found that CGMI violated Rules 3310(a) and 2010 between January 2022 and February 2023. Rule 3310(a) requires broker-dealers to establish an anti-money laundering program reasonably designed to detect and report suspicious transactions. Rule 2010 requires FINRA members to observe high standards of commercial honor and just and equitable principles of trade.
The regulator said CGMI failed to establish and implement policies and procedures reasonably expected to identify suspicious activity and prompt its reporting. The failure stemmed from an error in implementing revised AML procedures, rather than an absence of AML policies altogether.
Narrower trigger delayed review of potential fraud
The central issue was a difference in the criteria for escalating cases. The procedures in use required escalation only after fraud and/or a loss had been confirmed. The proposed revisions called for all potential fraud events to be referred for further review. With the narrower threshold in practice, some unconfirmed warning signs did not enter the next stage of review promptly.
The case materials refer to 171 potential fraud events in Citi Personal Wealth Management (CPWM) that were escalated late. They also identify delays in filing 88 suspicious activity reports (SARs), which financial institutions use to notify relevant authorities of suspected illegal activity. The available information describes delays in escalation and reporting; it does not say whether the events were ultimately determined to involve actual fraud or disclose the amounts involved.
Citi found the error and revised its procedures
CGMI discovered the process error through a self-initiated review in February 2023. It then retrained employees and issued revised procedures in May of that year. The record also says the firm filed the 88 delayed SARs, automated the escalation process and shared the review’s findings with FINRA.
In resolving the case, FINRA took into account CGMI’s efforts to identify the issue on its own, begin a review before regulatory intervention, submit the delayed reports, automate escalation and share its findings. Those remedial steps did not remove the violation, and the matter concluded with a public censure and a $250,000 fine.
The case shows how implementation details can affect a broker-dealer’s AML controls: even with policies in place, a system or workflow that applies a narrower escalation threshold than intended can keep potential fraud cases from reaching review and reporting promptly. FINRA’s record identifies the violation period as January 2022 through February 2023 and the action date as November 6, 2026.