Citigroup Global Markets’ Case Essay

1046 WordsOct 6, 20145 Pages
Citigroup Global Markets’ case Name: Affiliation: Discuss how administrative agencies like the Securities and Exchange Commission (SEC) or the Commodities Futures Trading Commission (CFTC) take action in order to be effective in preventing high-risk gambles in securities / banking, a foundation of the economy. The role of the Securities and Exchange Commission (SEC) is to maintain an orderly, fair and efficient market, protect investors as well as to facilitate capital formation. It is the responsibility of the SEC to ensure that companies make full disclosure of financial information in order to protect investors and the general public. The disclosure of meaningful financial information allows investors to make sound decisions on which firms to invest in. On the other hand, the Commodity Futures Trade Commission (CFTC) promotes competitiveness and efficiency in futures and options markets. CFTC also protects investors against unfair practices, manipulation and fraud. SEC played an important role in investigating Citigroup Global Markets’ case. Their investigations revealed that Citigroup had structured and market a collateralized debt obligation (CDO), called Class V Funding III. The bank had also exercised considerable influence over the $500 million of the assets in their CDO portfolio. The director of the SEC’s Division of Enforcement, a Mr. Robert Khuzami stated that investors and the general public at large were not sufficiently informed of the actions of Citigroup that amounted to duping unsuspecting investors. In this case, it clear that the role of SEC is to protect investors from unfair trade practices from organizations. Determine the elements of a valid contract, and discuss how consumers and banks each have a duty of good faith and fair dealing in the banking relationship. According to Bagley (2013) a

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