Citigroup to suspend Hong Kong trader amid stocks probe

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Officials at the US bank are examining whether certain traders in Hong Kong properly disclosed to its clients its own financial interest in stock trades.

Thursday 10, January 2019

(Bloomberg) --Citigroup suspended an equities trader in Hong Kong in the past few weeks as the firm kick-starts an internal investigation into its dealings with some clients, people familiar with the matter said.

Cindy Lui, a Citigroup employee since 2007, hasn’t been at work as a result of the ongoing review, the people said.

The review followed an industry wide probe last year by the Hong Kong Securities and Futures Commission into whether brokers in the city are providing the best possible prices to their clients when executing trades. This issue, known as best execution, was a key element of last year’s sweeping overhaul of European trading rules, the revised Markets in Financial Instruments Directive, or MiFID II.

James Griffiths, a spokesman for Citigroup in Hong Kong, declined to comment. Lui also did not comment.

Citigroup officials have reviewed whether its traders properly disclosed if the bank was acting as an agent or a principal in executing orders, one of the people said. In an agency trade, a brokerage acts as an intermediary only, receiving a fee for matching buyers and sellers. Principal trading is when a firm buys stocks from a client, taking the position on to its balance sheet, and sells them to another, pocketing the difference.

Citigroup generated the most revenue from the Asia-Pacific region among the 12 biggest investment banks in the first half of 2018, according to data from Coalition Development Ltd. The performance was aided by the equities unit, which gained market share, the data show.


TAGS : Citigroup, Hong Kong

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