This week, FINRA fined Citigroup $500,000 for failure to supervise Tamara Moon, a former registered sales assistant at the firm's branch office in Palo Alto, California.
Moon was barred from the industry in 2009 after she misappropriated $850,000 from at least 22 customers over a period of eight years. She also falsified account records and engaged in unauthorized trades. Many of her victims were elderly and vulnerable individuals, including a senior with Parkinson's disease. Moon committed these deeds while working as a registered sales assistant for Citigroup Global Markets.
In the 2009 news release, which announced FINRA's actions against Moon, Susan L. Merrill, FINRA Executive Vice President and Chief of Enforcement, said: "Firms have an obligation to supervise all of their personnel, including sales assistants who have access to confidential customer account information. The sales assistant in this case violated investors' trust by using her knowledge of customer accounts to prey upon the firm's most vulnerable customers."
In this week's release, FINRA said Citigroup was partially responsible for Moon's actions because the firm failed to detect and investigate the "red flags" that should have alerted the firm to Moon's misappropriation of customer funds.