The former head of Citigroup Global Investment Management may be punished by the Securities and Exchange Commission for his role in activities under investigation at its mutual fund unit, the company said in a filing with the Commission Friday.

Thomas Jones, a former manager for the firm, may face an enforcement action because of an allegedly inappropriate relationship between Citigroup and a transfer agent for its Smith Barney family of funds. Along with Jones, one other former employee, as well as a current employee, were also notified of possible charges.

In November, Citigroup had said that it had made errors in a relationship with the transfer agent, and Jones himself wrote in a memo that $16 million would be returned to the mutual funds affected by those "errors."

This is the latest in a series of Citigroup transgressions. Earlier this week, Jones, Vice Chairman Deryck Maughan and private bank head Peter Scaturro all left the firm amid a scandal at the firm’s Japanese unit. In that matter, clients were allegedly misled in some private bond sales.

In a memo obtained by Reuters, Citigroup COO Bob Willumstad said, "Neither the Wells Notice nor the underlying investigation had anything to do with Tom’s leaving the company."

 

The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.

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