Citi Positive On Near-Term Outloook For Australia's Wisetech Global

By Kenneth Corbin

The Commodity Futures Trading Commission has reached six settlements with financial services firms involving what it describes as technical rule violations that didn't materially affect consumers.

The agency says the settlements were the culmination of what it calls its sprint initiative, an effort to conclude lingering enforcement actions involving compliance violations such as record-keeping. Those actions were diverting resources from more serious issues such as fraud or market abuse, the CFTC says.

The agency assessed just over $8.3 million in fines to settle the cases. In all but one of the cases, the CFTC reduced the penalties to reflect the firms' cooperation and submission of remediation plans to improve their compliance operations.

The settlements are indicative of the Trump administration's pivot away from aggressive enforcement of compliance violations that don't directly harm consumers. The Securities and Exchange Commission has taken a similar tack, with Chairman Paul Atkins indicating that he wants to ease the regulatory burden for companies under the agency's oversight and instead focus on fighting fraud.

The SEC and CFTC are planning to work in "lockstep," Atkins and acting CFTC Chairman Caroline Pham said this week as they announced a formal effort to harmonize their agencies' regulatory efforts.

"It is a new day at the SEC and the CFTC, and today we begin a long-awaited journey to provide markets the clarity they deserve," Atkins and Pham say.

Pham says that the settlements the CFTC reached are an important step in the agency's efforts to reprioritize its resources toward fighting fraud and other investor harms. She says that when she announced the enforcement sprint earlier this year, "I expressed concerns about a ballooning enforcement docket for operational or technical noncompliance issues with no harm, with some matters languishing for nearly a decade, diverting resources away from the most critical aspects of Division of Enforcement's mission to protect against fraud, manipulation, and abuse in our markets."

Charles Marvine, acting chief of the CFTC's retail fraud and general enforcement task force, says the sprint initiative "not only allowed the CFTC to wrap up these six matters efficiently and conserve resources, but it was also part of a larger effort to help DOE clean up its overall docket and prioritize pursuing swindlers and other wrongdoers going forward."

The CFTC assessed the largest fine to UBS, citing three of the Swiss bank's entities, UBS Group AG, UBS Financial Services, and UBS Securities for lax surveillance systems that didn't adequately monitor all of the firm's trading activity. UBS will pay a $5 million penalty and agreed to submit progress reports on its mediation plan.

"UBS is pleased to have resolved this matter," a spokesman says, declining to comment further.

Citigroup Global Markets agreed to a $1.5 million penalty to resolve allegations that a programming error caused it to file inaccurate trading data for a seven-year period. The CFTC also said it resolved a supervisory issue through the settlement, which came with a reduced penalty because of Citi's self-reporting and assistance with the investigation.

"As recognized by the CFTC, Citi self-reported the issues, provided exemplary cooperation to the CFTC, and strengthened our controls," a spokeswoman says. "We are pleased to have reached this resolution with the CFTC."

The agency reached three settlements with firms over employee use of unauthorized communications channels, which was a important enforcement priority with the CFTC and the SEC during the Biden administration, sometimes involving nine-figure settlements. In today's settlements, SMBC Capital Markets, Banco Santander, and BNY each agreed to pay $500,000. The CFTC credited each firm with "exemplary cooperation."

SMBC declined to comment on the settlement.

"Santander is fully committed to meeting our regulatory and compliance obligations," the bank says. "We have cooperated extensively with the CFTC and other regulators in their review of this matter and have made considerable enhancements to our policies and procedures. We are pleased to have this matter fully resolved."

"BNY takes its regulatory responsibilities seriously and is pleased to have resolved this matter," a spokesman for the bank says.

In the smallest settlement, the CFTC fined U.S. Bank $325,000 for reporting incorrect swap valuation data, also crediting the company with "exemplary cooperation."

"U.S. Bank's resolution with the CFTC related to self-reported data errors that had no customer impact," a U.S. Bank spokeswoman says. "We take our responsibility to accurately report data seriously and are pleased to have this matter behind us."

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This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

By David Wignall

Thousands of Citigroup's richest clients will soon have their wealth managed by BlackRock, under the terms of a new partnership announced Thursday. The move marks the end of Citi's in-house proprietary asset management business.

According to the agreement, Citi has tapped BlackRock to provide investment strategies for roughly $80 billion of client assets. Clients will continue to work face-to-face with Citi's private bankers, who will provide advice on financial planning and asset allocation. But the actual investment of funds will be handled by BlackRock.

Andy Sieg, Citi's head of wealth, said the partnership would play to both firms' strengths. The deal "brings together the sophisticated relationship-driven and market-based advice of our bankers...with the renowned investment expertise and innovative technology capabilities of BlackRock," he says. BlackRock already manages some of Citi's $635 billion in client investible assets, according to a Citi spokesperson.

Citi expects the partnership to be finalized by the end of the year.

Citi's in-house investment management unit, CIM, won't officially close down, according to a spokesman at Citi. But certain members of CIM will join BlackRock as portfolio managers, where they will continue to serve Citi clients. The rest of CIM will be streamlined, focusing on managing ties with third-party asset managers and providing model portfolios, according to the spokesman.

The partnership will give Citi's private bankers and investment professionals access to Aladdin Wealth, BlackRock's portfolio management system. Eventually, Citi plans to offer BlackRock strategies to more of its wealth unit's clients, the spokesman said.

The agreement comes as BlackRock is seeking to expand in private markets. Over the last two years, the world's largest asset manager has spent more than $27 billion to buy infrastructure investor Global Infrastructure Partners, credit manager HPS Investment Partners, private markets data-provider Preqin, and real estate firm ElmTree Funds.

For Citi, the move is part of a broader campaign by CEO Jane Fraser to streamline the bank. Citi has made growing its wealth business a priority in 2025 and 2026. Sieg, whom Citi hired in 2023 to lead the wealth unit's transformation, has said the bank should be "No. 1" in the world. Citi backed Sieg following reports that it was investigating a series of complaints about his workplace conduct. Bloomberg reported that Citi had retained law firm Paul Weiss to look into the complaints.

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.