Citigroup probed after adviser flees
A former Citigroup adviser who fled Hong Kong for India after he allegedly misled investors has sparked an investigation by the Securities and Futures Commission.
Citigroup's internal control system has been called into question after failing to detect Ramesh Sadhwani, who sold the product, purporting that it guaranteed a yearly return of up to 18 per cent, to investors for four years before he was fired in February 2009 for gross misconduct.
Seven investors were affected, with total losses estimated to be US$1.7 million.
Although investors complained to the Hong Kong and US offices of Citi, the Hong Kong Monetary Authority and the SFC, Sadhwani, who was not a Hong Kong permanent resident, left the city shortly after being fired.
The case was thought to be complex, according to people familiar with the situation, and Sadhwani was not the only person involved.
They said the SFC had started its investigation in July 2009.