A unit of Citigroup Inc will pay $1.1 million to settle civil charges it violated certain short-selling rules designed to reduce market manipulation risks, a Wall Street-funded regulator and BATS Global Markets said on Tuesday. The Financial Industry Regulatory Authority (FINRA) said Citigroup Global Markets violated what is known as Rule 105 of "Regulation M," which prohibits a trader from shorting stock prior to a public offering, then buying the same stock through the offering. Citigroup is settling the case without admitting or denying the charges. A spokeswoman said the company was "pleased to resolve" the matter. Regulators including FINRA and the U.S. Securities and Exchange Commission have been on the prowl during the past year for short-selling violations under Regulation M. Earlier this month, the SEC obtained a record $7.2 million sanction against a New York-based proprietary trading firm for similar violations. Regulation M is intended to protect against potential
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