According to a statement by the Financial Industry Regulatory Authority (FINRA), fines and restitution of at least $11.5 million have been imposed on Citigroup Inc (C) in relation with incorrect research ratings, which the bank displayed on over 1 800 stocks. As a result, a large number of Citi clients ended up owning shares, which they would have never purchased.
Citigroup shares closed lower for the fifth time in the past eight trading sessions on Friday. The stock went down 0.89% ($0.67) to $74.41, after touching an intraday low at $74.39, or a price level not seen since December 15th ($74.27).
In the week ended on December 31st the shares of the financial group lost 1.43% of their market value compared to a week ago, which marked the second drop out of six weeks. It has also been the worst performance since the week ended on November 12th.
The stock has extended its loss to 1.44% so far during the current month, following a 2.72% surge in November. The latter has been a third consecutive month of gains.
For the entire past year, the shares of the NYSE-listed financial holding company rose 14.84%. The stock has gained another 25.21% so far in 2017.
Citigroup will have to pay a fine of $5.5 million and additional $6 million as compensation to retail clients due to errors involving more than 38% of the equity securities covered by the bank, which occurred between February 2011 and December 2015.
According to FINRA, at times, Citi would display incorrect ratings (“Buy” instead of “Sell”) to clients, brokers and supervisors. In other cases, Citi would show ratings on companies, which were not covered by the bank. As a result, brokers made incorrect statements based on wrong ratings and many customers were in possession of stocks with “Sell” ratings, although such ownership was prohibited.
The US regulator also explained that the errors were caused by electronic data feed issues, while Citi did not manage to fix the incorrectly displayed ratings on time.
According to CNN Money, the 28 analysts, offering 12-month forecasts regarding Citigroup Inc’s stock price, have a median target of $79.50, with a high estimate of $101.00 and a low estimate of $65.00. The median estimate is a 6.84% surge compared to the closing price of $74.41 on December 29th.
The same media also reported that 13 out of 30 surveyed investment analysts had rated Citigroup Inc’s stock as “Buy”, while 12 – as “Hold”. On the other hand, 2 analysts had recommended selling the stock.
Weekly Pivot Levels
By using the traditional method of calculation, the weekly levels of importance for Citigroup Inc (C) are presented as follows:
Central Pivot Point – $74.83
R1 – $75.27
R2 – $76.13
R3 – $76.57
R4 – $77.01
S1 – $73.97
S2 – $73.53
S3 – $72.67
S4 – $71.81