Hong Kong Regulators Fine Citigroup

Posted October 3rd, 2011 at 10:05 am (UTC-5)
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Hong Kong regulators have fined Citigroup $770,000 for failing to promptly report a Ponzi scheme run by an employee under “the nose” of company officials.

The Securities and Futures Commission said a former licensed representative of the bank was responsible for a fraudulent scheme involving 13 clients.

The employee was fired, and the company says it will compensate people affected by the scheme.

A Ponzi scheme attracts victims with the illusion that they can make huge returns. The fraud is convincing for a while because the operator pays early investors with money from victims who join the scheme later.