6 octobre 2011
Citigroup faces regulatory scrutiny in Japan -source
TOKYO, Oct 2 (Reuters) - Citigroup is being
investigated by Japanese regulators for possible infractions
related to its marketing of financial products and could face
its third major punishment in Japan in 7 years, a source with
knowledge of the matter said.
Japan's Financial Services Agency (FSA) is probing whether
Citigroup failed to offer sufficient explanations to customers
about investment trusts, which are similar to mutual funds in
the U.S., and other financial products, the source said.
The regulator is also looking at whether controls against
money laundering were sufficient, following punitive action in
recent years for lax oversight in that area, the source said.
The FSA plans to order Citigroup to report on its legal
compliance and will then decide whether it deserves to be
punished. Possible sanctions include having some operations
suspended for a certain period of time, the source said.
The source spoke on condition of anonymity because the probe
into Citigroup specifically has not been made public.
No one at the FSA, which carries out routine inspections on
all banks, could be immediately reached for comment.
"It is a matter of public record that the FSA is conducting
an inspection and we don't comment on conversations with our
regulators," a spokeswoman for Citigroup in Japan said without
elaborating.
News of the probe was first reported by Dow Jones.
Sanctions would come as a fresh blow to Citigroup, which had
its name tarnished in Japan in 2004 when regulators forced it to
close its private banking business due to lax controls in the
prevention of money laundering.
It was punished again in 2009 for the same violation and
forced to suspend retail bank marketing activities for a month.
(Reporting by Noriyuki Hirata, Taiga Uranaka and Junko Fujita;
Editing by Nathan Layne)
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