The Financial Industry Regulatory Authority (FINRA) announced Tuesday that it had fined Citigroup Global Markets Inc. $500,000 for failure to supervise a former registered sales assistant in its branch office in Palo Alto, Calif.
Tamara Moon was suspended in August for allegedly misappropriating $749,978 from the accounts of 22 elderly and ill clients, falsifying account records and engaging in unauthorized trades within client accounts. Citibank neither affirmed nor denied the charges in concluding the settlement, but consented to the entry of FINRA’s findings.
According to FINRA, Moon took advantage of supervisory lapses to siphon off funds from the accounts of vulnerable clients and even her own father. FINRA is still investigating individuals involved in her supervision, and said that numerous red flags should have resulted in further inquiries. Those inquiries, it said, would have revealed what Moon was doing.
Some of the red flags were exception reports highlighting conflicting information in new account applications and customer account records reflecting suspicious transfers of funds between unrelated accounts. Failure to implement “reasonable systems and controls regarding the supervisory review of customer accounts” allowed Moon to falsify new account applications and other documentation.