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NEW YORK (
TheStreet) -- Japan's top regulator -- the Financial Services Agency -- may order
Citibank Japan(C - Get Report) to suspend part of its operations as a penalty for allegedly failing to adequately explain the risks of its financial products to customers,
Dow Jones Newswires reported, citing
Kyodo News Service.
The regulator is expected to impose an administrative penalty on the Japanese unit of the bank by the end of this year. It will be the third such penalty for Citigroup in Japan following those in 2004 and 2009.
Citigroup declined to comment on the report.
Bloomberg News reported that Darren Buckley, head of Citibank Japan, may step down from his post this month, citing two people with knowledge of the matter. According to the report, the bank is looking for a Japanese national to become the CEO of the local banking unit, in a bid to ensure that the person is familiar with the local rules and retail market.
Citigroup recently announced several management changes
across its operations and said that Japan will begin operating as an independent unit and will no longer be clubbed with its Asia operation.
Citi has had
several stumbles in Asia
. In 2004, the company was ordered to shut down private banking operations in connection with multiple violations of laws and regulations by its private banking operations.
In 2009, the bank was ordered to suspend sales activities in the retail business, for what the regulator considered inadequate measures to protect against money laundering.
--Written by Shanthi Bharatwaj in New York
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