According to FINRA, Citigroup Global Markets Inc. was censured and fined $100,000 for publishing inaccurate Rule 606 reports on its routing of non-directed orders in National Market System securities.

Based on inaccurate information received from a vendor, the firm's publicly available reports over-reported the percentage of non-directed customer orders and non-directed customer orders routed to its alternative trading system. Additionally, the reports failed to include all venues requiring disclosure.

The firm's supervisory system was not reasonably designed to achieve Rule 606 compliance. While the firm relied on a third-party vendor for data and procedures required a designated person to review the data to ensure percentages and order counts appeared accurate, the procedures did not describe how reviews should be performed or require any review of underlying data accuracy.

Rule 606 reporting provides transparency to investors about how their broker routes orders, which can affect execution quality and prices. Accurate reporting enables investors to assess whether their broker is providing best execution and make informed decisions about where to direct their business.

After identifying these issues, the firm enhanced its written supervisory procedures to include specific steps for conducting accuracy reviews of Rule 606 data.

This case underscores that firms cannot simply rely on vendor-provided data for regulatory reporting without implementing adequate controls to verify accuracy. Investors rely on this transparency to evaluate their broker's order routing practices and ensure they are receiving fair treatment.