Citigroup Inc. Friday said U.S. securities regulators may recommend enforcement proceedings against the former head of Citigroup Global Investment Management.
In a regulatory filing, Citigroup said the staff of the Securities and Exchange Commission has informed Thomas Jones, one other former employee and an employee that they are contemplating recommending the enforcement action in connection with an investigation Citigroup first disclosed last November.
The potential action is related to the "creation and operation of an internal transfer agent unit to serve primarily the Smith Barney family of funds," Citigroup said in the filing.
Other details were not provided in the filing.
The news follows Citigroup Inc.'s announcement in a memo earlier this week that three top executives, including Jones, Vice Chairman Deryck Maughan and private bank chief Peter Scaturro are leaving the financial services giant in the wake of a scandal at its Japanese private banking unit.
The resignations come after Citigroup Chief Executive Charles "Chuck" Prince, a lawyer who rose to the top job last year, promised to rid the company of regulatory problems and improve its reputation.
Jones, head of Citigroup Global Investment Management, had been chairman and CEO of Salomon Smith Barney Asset Management.
Citigroup did not name the employee or former employee in its regulatory filing.
A Citigroup representative could not be immediately reached for comment.