Wednesday, 26 November 2014
Last updated 10 hours ago
Jun 2 2010 | 9:38am ET
Regulators have ordered Citigroup to make whole hedge fund investors who placed money in a fixed-income municipal arbitrage product—the MAT 3 Municipal Arbitrage Fund—which was sold by the banking giant.
The Financial Industry Regulatory Authority has ordered the bank to pay more than $550,000 to the investors, saying the bank misled both its own brokers as well as its investors regarding the risks posed by the product, according to the Wall Street Journal.
"We are disappointed and disagree with this decision as it is inconsistent with other panels, which have dismissed similar claims," a spokesman for Citigroup told the WSJ.
Citigroup created the municipal arbitrage product in 2006 and marketed it as having the volatility of the Lehman Brothers Aggregate Bond Index. But according to lawyers for the hedge funds—which were not named—the product was 2.5 times more volatile than the S&P 500 and 7.8 times more volatile than a traditional portfolio of municipal bonds.
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…
Reg NMS created a huge bifurcation in equity markets and while much of what has followed has been positive, in terms of lower fees and greater liquidity, many traders would like to see the market come...