New York Attorney General Eric T. Schneiderman says it has found that Citigroup overcharged 47,000 clients of managed investment accounts to the tune of more than $22.5 million.
Citi has agreed to the findings. In addition, it will report fee overcharge issues to the attorney general’s office for the next three years and pay a penalty of $1 million.
“Our investigation put $22.5 million rightfully back in the hands of customers in New York and across the country,” said Schneiderman, in a statement on Thursday. “We appreciate Citi’s cooperation with our investigation and its commitment to ensuring investors are paid back what they are owed — which sets an example for other financial institutions.”
His office says the overcharges affected fees clients negotiated on managed accounts, and Citi’s failure to rebate some fees to clients after periods of inactivity. The firm “identified these overcharges as part of an internal review conducted in cooperation with the attorney general’s investigation.”
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In 2012, a client of Citigroup Global Markets in Westchester complained about the excess fees, prompting the beginning of the investigation. Citi started reimbursing clients in 2014.