Citigroup Global Markets agreed to pay $18.3 million in disgorgement, prejudgment interest and penalties to settle SEC charges that it overbilled investment advisory clients and misplaced client contracts.

THE SEC ALLEGES THAT ….  over a 15-year period, at least 60,000 advisory clients were overcharged all told about $18 million in unauthorized fees because Citigroup failed to confirm the accuracy of billing rates entered into its computer systems. Citigroup also improperly collected fees during time periods when clients suspended their accounts.  The affected clients have since been reimbursed.

The SEC also found that Citigroup cannot locate approximately 83,000 advisory contracts for accounts opened from 1990 to 2012. Without those missing advisory contracts, Citigroup could not properly validate whether the fee rates negotiated by clients when accounts were opened were the same advisory fee rates being billed to clients over the years. It’s estimated that Citigroup received approximately $3.2 million in excess fees from advisory clients whose contracts were lost.