Two regulators announced Wednesday that they had fined a Citigroup unit $26 million in all for failing to disclose information to its mutual fund customers, and one regulator also fined units of American Express Co. and JPMorgan Chase & Co. a total of $15 million.
The companies did not admit or deny the regulators' allegations.
The Securities and Exchange Commission said it fined Citigroup Global Markets Inc. $20 million, and NASD fined the unit of the New York financial services giant $6.25 million.
The SEC action involved two alleged incidents in which the Citi unit, which offers retail brokerage services, failed to tell customers that about 75 mutual fund complexes had paid into the unit's revenue sharing plan in return for "shelf space" in its brokerage network.
NASD said its fine took into account the SEC settlement.
The SEC also alleged that Citigroup sold Class B fund shares to customers who invested more than $50,000 rather than disclosing that they could obtain a higher return with Class A shares.
NASD said it fined American Express Financial Advisors $13 million and Chase Investment Services $2 million for allegedly putting customers in funds that were not the most cost-effective. The companies sold Class B or Class C fund shares without disclosing that Class A shares would have given higher overall returns, NASD said.
The companies agreed to remediation for more than 50,000 households, NASD said.
