Tuesday, 25 November 2014
Last updated 5 hours ago
May 28 2010 | 10:09am ET
Citigroup has agreed to pay $1.5 million to settle charges that its supervisory failures allowed one of its brokers and two customers to misappropriate some $60 million in cemetery trust fund money, including hedge fund investments.
Under the scheme, Smith Barney broker Mark Singer arranged to have Clayton Smart buy 28 cemeteries in Michigan from Craig Bush, using $28 million improperly transferred from the cemeteries’ trust funds to Smart. Smart then used more of the trust fund money to buy cemeteries and funeral homes in Tennessee as part of a scheme that ran from 2004 through 2006, according to the Financial Industry Regulatory Authority.
Citi was rapped for missing a veritable forest of red flags, including in February 2005, when it learned that Smart might be misrepresenting his acquisition of hedge fund investments owned by the Michigan cemetery trusts, using that investment as collateral for a $24 million credit line from Citigroup Private Bank.
Both Smart and Singer have been charged criminally; the latter is awaiting a second trial in Tennessee after the first ended in a mistrial.
Nov 4 2014 | 9:45am ET
Data management is important to every business, but for hedge funds, it is critical. FINalternatives recently asked Peter Sanchez, CEO of Northern Trust Hedge Fund Services, how fund managers can deal with the demands of managing data while at the same time remain transparent and abide by operational best practices. Read more…
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