Hedge Funds

NASD fines Citigroup $250K for inappropriate sales literature


The NASD this week slapped a $250,000 fine, its largest to date involving hedge fund sales by broker-dealers, on Citigroup Global Markets for disseminating what the self-regulatory group called inappropriate sales literature.

The censure and fine are a response to 100 pieces of sales literature that contained projections for a targeted rate of return and other hypothetical figures without properly disclosing risk and providing a sound basis for how they arrived at the target, the NASD said. The brochures were distributed between July 2002 and June 2003.

"The portfolio seeks to earn an annualized return of 15% or more,