NASD Regulation Fines Citicorp Securities $25,000; Orders $300,000 in Disgorgement
Washington D.C. - NASD Regulation, Inc. announced today that it has censured and fined Citicorp Securities, Inc. $25,000 and ordered it to comply with an undertaking to disgorge $300,000 for violating NASD Regulation's Continuing Education Requirements. This disciplinary action results from an investigation conducted by NASD Regulation's New York District office.
"The Continuing Education Requirements help to ensure that registered representatives stay current on products and markets, and, importantly, the rules that govern the industry," said NASD Regulation President Mary L. Schapiro. "NASD Regulation is committed to closely monitoring members' compliance with these essential rules and assisting members in achieving full compliance. We will continue to pursue disciplinary actions against those members, large or small, who fail to comply," Schapiro said.
NASD Regulation found that for certain periods between November 1995 and May 1996, Citicorp failed to insure that 19 of its employees completed the Regulatory Element of the NASD Regulation's Continuing Education Requirements within the prescribed time period. As a result of their failure to comply with these requirements, the individuals' registrations were deemed inactive. Nevertheless, these individuals were permitted by Citicorp to improperly continue to function in capacities which required registration.
On February 8, 1995, the Securities and Exchange Commission (SEC) approved rules for the creation of Continuing Education Requirements. The requirements consist of two parts -- the Regulatory Element and the Firm Element. Both elements became effective July l, 1995.
The Regulatory Element requires regular participation in computer-based training on regulatory matters (such as registration, communications with the public, suitability, business conduct, etc.). Failure to comply with the Regulatory Element requirements results in an individual's registration being deemed inactive until he or she fulfills all program requirements. An individual with an inactive status may not engage in, or be paid for, activities that require registration. The settlement requires Citicorp to disgorge $300,000 to NASD Regulation, the amount it improperly paid the 19 individuals during the periods in which their registrations were inactive.
"In light of the increased complexity of the demands made upon securities professionals who deal with the public, it is essential that the brokers maintain maximum standards of competency and professionalism," Schapiro said. This case demonstrates how important it is for the membership to insure that its registered persons fully comply with the mandates of the Continuing Education Requirements."