Citi’s decision to sack eight Hong Kong traders, for being a principal in trades while saying it was only an agent, should be seen in the context of greater strength among Asia-Pacific regulators.
Citi’s action followed an internal review rather than any Securities and Futures Commission penalty, but the regulator did indirectly have a hand in its detection.
Specifically, equity traders had used Citi’s own balance sheet on the other side of client trades. Those clients understood the bank was only acting as an agent – matching orders between clients – when in fact Citi’s position made it a principal.
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