Citigroup's Smith Barney division has agreed to pay $50 million to settle market-timing charges by the New York Stock Exchange and New Jersey regulators. Of the $50 million total, $40 million will go to investors who were harmed by the activity.

"Member firms that inadequately supervise their businesses run the risk of disgorging profits and paying additional penalties," said Susan L. Merrill, chief of enforcement at NYSE Regulation. "The issuance of internal policies and memoranda is not enough: They must be effectively enforced."

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