Monitoring & Reporting Suspicious Activity Case Study

American multinational investment bank and financial services corporation Citigroup has been in the bad books of regulators for quite a few years now it seems. In 2019, the Bank of England imposed a record £44 million fine (which would have been £62.7 million, had Citigroup not agreed to resolve the matter) for persistent inaccurate reporting of its capital and liquidity levels. Moreover, the breaches of relevant requirements under the Prudential Regulations Authority (PRA) raised fundamental concerns about Citigroup and the effectiveness of its regulatory reporting control framework.

Operational lapses and regulatory reporting deficiencies whilst not limited to the UK, resulted in October 2020, with Citigroup being fined $400 million by the Federal Reserve and the Office of the Comptroller of the Currency because of their failures to implement and maintain an enterprise-wide risk management and compliance risk management program and falling short of regulatory expectations. Furthermore, prior to this specific fine, a Citigroup “error” resulted in a $900 million loan being paid back to lenders of a Citigroup client, with whom Citigroup is now pursuing legal action against some lenders who are refusing to return the payment. Note that this event prompted Citigroup to increase investment in its operational systems by $1 billion, to bring them up to par with regulations.

Fast forward to January 2022, and a Citigroup subsidiary in Hong Kong was fined $45 million for misconduct in its cash equities and several former senior managers are facing disciplinary proceedings. Finally in August 2022, the FCA has fined Citigroup $15 million for market abuse rule failings. This fine was a result of an 18-month investigation, that identified and assessed the specific market abuse risks Citigroup may have been exposed to. Significant gaps in its arrangements, systems and procedures were the outcome of years of failing to adequately monitor and report suspicious activity. Consequently, and in a bid to ensure that Citigroup meets regulatory requirements, an $11billion budget has been set aside for tech spending in 2022.

Whilst this proposed investment to ensure regulations are met is admirable, Citigroup and all financial institutions should remember that keeping the financial market “clean” and safe for investors is a primary objective of the UK regulator.  In order to be able to comply with the requirements of the Market Abuse Regulations (MAR), it is very important to ensure that trade surveillance of a firm’s dealings is supported by the appropriate arrangements, systems, and procedures.

Anti-Financial Crime Support – How can Complyport Help?

Our experienced Financial Crime and Forensics team led by Martin Schofield—one of the world’s leading specialists in the field—brings a wealth of experience to every project we are engaged in. Our highly experienced financial crime professionals and forensic experts, in subjects such as anti-money laundering, counter terrorist financing, anti-bribery and corruption and fraud and regularly help our clients navigate the complexities of the financial crime and money laundering environment. Services offered by Complyport include:

  • AML/Fraud policy & training reviews,
  • Transaction monitoring / reporting framework reviews,
  • Vulnerable Customer Management framework reviews/audits/gap analysis,
  • Financial crime health checks and audits,
  • Implementation of financial crime, AML, CTF, ABC, Fraud and market abuse controls and frameworks,
  • Ongoing advice on financial crime, AML, CTF, market abuse and fraud prevention,
  • Authoring/reviewing financial crime policies,
  • Outsourced MLRO support
  • Outsourced KYC and CDD support,
  • Assistance in identifying Politically Exposed Persons (PEPs),
  • Assistance in navigating international sanctions,
  • Support with preventing market abuse and insider dealing,
  • Expert Witness in Financial Crime cases
  • Forensics and Investigations
  • Design and/or delivery of online or face to face financial crime training

If this article has raised any questions, or you think your firm may require assistance, please contact either Martin Schofield via or Jan Hagen via to book in a free consultation.

About Complyport

Complyport is the City’s market leading consulting firm supporting the UK financial services industry for over 20 years. We specialise in providing Governance, Risk and Compliance services to support the regulated financial services industry to raise standards and thrive.

Complyport advises and assists firms to become authorised and to comply with the rules and requirements of regulators on an ongoing basis. Our vision is to be there for our clients every step of the way, helping them change, grow, and excel through expertise, insight, and innovation, and in so doing to become our clients’ most valued supplier and trusted advisor.

With presence in the UK and EU, as well as via our Associates Network, Complyport can assist firms across multiple jurisdictions.

Complyport’s multidisciplinary consultants possess deep expertise in their field, having acted in FCA skilled person reviews, as expert witnesses in legal cases and as expert investigators for firms or their legal advisers.

Day to day, we conduct audits and reviews of a firm’s products, processes, policies, and procedures to identify scope for business, to determine the impact of regulatory developments and to verify compliance with local regulations. Complyport can also assist firms by providing personnel to cover all the key compliance functions including resourcing individuals to be registered as your Compliance Oversight Function (SMF16) and/or Money-Laundering Reporting Officer (SMF17).

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