FINRA announced Monday that it has fined Citi International Financial Services LLC, a subsidiary of Citigroup, Inc., for charging excessive markups and markdowns on fixed income securities, and for deficient supervision.  The case is based on multiple reviews by FINRA Market Regulation (Fixed Income staff) for transactions executed over a 3-year period. FINRA Findings and Allegations. According to EVP Tom Gira, FINRA Market Regulation, markups and markdowns charged by Citi International on corporate and agency bond transactions were outside of appropriate standards for fair pricing in debt transactions.  The alleged violations occurred throughout the relevant period, July 2007 through September 2010. The markups and markdowns ranged from 2.73% to over 10%, and were excessive given market conditions, the cost of executing the transactions and the value of the services rendered to the customers, among other factors.  In addition, from April 2009 through June 2009, Citi International failed to use reasonable diligence to buy or sell corporate bonds so that the resulting price to its customers was as favorable as possible under prevailing market conditions. FINRA found that the supervisory system of Citi Int'l contained significant deficiencies regarding, among other things, the review of markups and markdowns under 5% and utilization of a pricing grid for markups and markdowns that was based on the par value of the bonds, instead of the actual value of the bonds. FINRA Sanctions. Without admitting or denying the charges, Citi International agreed to pay a $600,000 fine and $648,000 in restitution and interest to more than 3,600 customers.  The firm also was ordered to revise its WSPs for supervisory review of markups and markdowns, and best execution in fixed income transactions with its customers. For further details, go to:  [FINRA News Release, 3/19/12] and   [FINRA AWC #20070112994-01].