Citigroup Inc. has been fined $1.85 million by the Financial Industry Regulatory Authority for failing to execute customer transactions at the best price on non-convertible preferred securities. The violations, which impacted approximately 22,000 customers, occurred in the bank's Citigroup Global Markets Inc. unit. The bank will also pay $638,000 in restitution, plus interest, to the affected customers, said FINRA in a statement on Tuesday. Citigroup's trading desks is accused of not pricing customer trades at the most favorable price due to "faulty price logic." The bank also had deficient supervisory systems and written supervisory procedures for best execution in non-convertible preferred securities, said FINRA. "FINRA will continue to pursue firms that neglect their duty of best execution," said Thomas Gira, FINRA Executive Vice President and Head of Market Regulation. "Citigroup lacked the necessary systems and supervision to ensure that it provided customers with the executions they deserved and, as a result, customers were receiving inferior prices for more than three years."

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