FINRA 'discipline' Alert! Citigroup incorrectly stated that it was acting as an agent (a middleman facilitating the trade between two parties) when it was actually trading as a principal (trading for its own account) on 37,000 transactions.

Penalty? Censure, $250k fine, without admitting anything.

TLDRS:

From October 2016-July 2020, Citigroup incorrectly stated that it was acting as an agent (a middleman facilitating the trade between two parties) when it was actually trading as a principal (trading out of its own account).
Citigroup incorrectly reported its role in 37,000 trades.
If these inaccuracies relate to short sales, then there is concern about whether the firm is properly tracking its short positions.
ATS platforms (where this trading went down) are already less transparent than public exchanges, and since Citigroup was acting as a principal, it's trading for its OWN account, would potentially include short positions.
Penalty? Without admitting the findings, $250,000 fine, and censure.

Hello and good evening Superstonk, I hope everyone had a GREAT weekend!

I would like to share some more FINRA 'discipline' with y'all, this time it's Citigroup (again...)

As these releases convey a ton of information, I hope this format makes sense:

I am going to outline what Citigroup did from points from the filing.
I am going to pull the rules they broke and attempt to provide wut mean definitions while breaking each section against Citigroup down a bit further.
I will talk about the penalty levied.
I will discuss how the nefarious behavior could impact GameStop.

From October 2016-July 2020, Citigroup incorrectly stated that it was acting as an agent (a middleman facilitating the trade between two parties) when it was actually trading as a principal (trading out of its own account).
They sent out approximately 37,000 trade confirmations that contained incorrect information via their Alternative Trading System--an SEC-regulated trading venue in which a computerized system matches buy and sell orders of securities.

Citigroup incorrectly reported its role in 37,000 trades.

If these inaccuracies relate to short sales, then there is concern about whether the firm is properly tracking its short positions.
ATS platforms (where this trading went down) are already less transparent than public exchanges, and since Citigroup was acting as a principal, it's trading for its OWN account, would potentially include short positions.