SYDNEY (Reuters) – Citigroup is refunding more than A$3 million ($2.2 million) to retail customers in Australia who suffered losses from complex investments sold by the bank without adequate advice, the country’s corporate watchdog said on Monday.
The Australian Securities and Investments Commission (ASIC) said it had concerns the bank’s financial advisers had sold the complex products without complying with regulatory and disclosure obligations required to provide personal financial advice.
Following an investigation by the regulator, Citi will refund 114 customers who invested in complex fixed coupon products and other capital at risk products between 2013 and 2017 and lost money, the regulator said in a statement.
The bank will also give customers with remaining investments in the products an opportunity to exit “without cost,” the regulator said.
Following ASIC’s investigation, Citi on Jan. 1, 2018, stopped selling structured products to retail clients without adequate personal financial advice, it said.
“While Citi maintains the view that none of its actions amounted to a breach of its obligations, Citi has acknowledged ASIC’s concerns and is making a payment to this (small) group of clients,” a Citi spokeswoman said in an emailed statement.
The bank confirmed it no longer offers the products to Australian retail investors without taking into account their personal circumstances and providing them with personal advice.
It has completed about 75 percent of the refunds, the spokeswoman said.
Citi is also defending a lawsuit brought against it by the country’s competition regulator over a 2015 capital raising.
Reporting by Paulina Duran; Editing by Chris Gallagher