by Cheryl-Anne Sturken | August 01, 2007

As part of its continuing scrutiny of the financial industry’s meetings and events, the National Association of Securities Dealers announced on June 6 that Citigroup Global Markets will pay $15.2 million to settle charges that brokers in its Charlotte, N.C., branch office used misleading materials in seminars and meetings that encouraged hundreds of BellSouth employees to make bad investments.

In an official statement, NASD said Citigroup failed to supervise adequately a team of brokers who held dozens of retirement seminars and meetings between 1994 and 2002, during which they handed out sales materials that encouraged BellSouth employees to invest their retirement portfolios in certain financial markets that were depicted as lucrative but proved otherwise.

The report cites one broker who conducted more than 40 seminars “without obtaining firm approval for the seminars or seminar sales materials.” In addition, NASD said “Citigroup’s compliance officials had an opportunity to review one of the team’s seminar handouts in 2001 but failed to detect, correct and follow up” on misstatements in the documents.

As a result of NASD’s investigation, three brokers and two managers at Citigroup’s Charlotte office were disciplined with personal fines and work suspensions.

NASD said $12.2 million of the settlement will be used to pay restitution to 200 former BellSouth employees who saw the principal in their accounts decline.

In a statement, Citigroup said, “We take this matter seriously. The firm is working to prevent a similar situation from occurring again.”