The SEC's proposed actions are related to Citigroup's creation and operation of an internal transfer agent serving more than 20 Citigroup-managed closed-end funds.
Citicorp Trust sub-contracted a number of transfer agent services when it entered the business in 1999. The subcontractor struck a separate deal with Citigroup Asset Management in 1998, guaranteeing investment management revenue to Citigroup Asset Management and investment banking revenue to an affiliate.
Later,
The SEC is involved in the case because Citigroup Asset Management did not disclose the revenue guarantee when Citicorp Trust started serving as a transfer agent to the various Citi closed-end funds. Citigroup Asset Management did not disclose the one-time payment either, Citigroup said.
On Thursday, Citigroup said it had set aside $196 million during the second half of last year related to this case.
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