Two former Citigroup executives, the CEO and the CFO of the mutual fund unit, Citigroup Asset Management, were accused yesterday of kicking back tens of millions of dollars in mutual fund savings to the company's transfer agent, rather than to investors.

In Manhatan's U.S. District Court The Securities and Exchange Commission charged Thomas Jones and Lewis Daidone, former chief executive officer and chief financial officer, respectively, of returning tens of millions of dollars in savings realized through a favorable contract with the firm's transfer agent, First Data Investment Services, rather than its rightful owners: the shareholders.

Citigroup forced Jones and Daidone out last October in a separate money-laundering flap in Japan. Daidone was once in the running for Sandy Weill's spot as Citigroup CEO, while Jones was heralded in 2002 by Fortune magazine as the fifth-most powerful black executive and "Sandy Weill's point man on Citigroup's all-important synergy mission," the New York Post reports.

"This case demonstrates that the Commission seek out not just corporate wrongdoings but the individuals responsible for such actions," said Andrew Calamari, associate regional director for the SEC's northeast regional office, in a statement.

Meanwhile, attorneys for Jones at Baker Botts issued a statement of their own yesterday calling the charges "unfounded."

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