reportedly is near an agreement to separate its investment banking division from its stock research operation and pay a fine in the hundreds of millions of dollars to end a probe of potential conflicts of interest at the financial services giant.
Citigroup officials will meet Friday with federal regulators to propose the sweeping settlement, which it first raised Thursday with New York Attorney General Eliot Spitzer,
The Wall Street Journal
reported. Regulators reportedly hope to use the agreement as a model for the securities industry.
Citigroup is under investigation on at least two fronts: one into the allegedly conflicted behavior of analysts like Jack Grubman during the late-nineties bull market; the other into how it allocated shares in popular initial public offerings. The settlement would end both aspects with a substantial payment and global settlement that would satisfy both state and federal regulators.
According to the
, it remains unclear the degree to which Citi would separate analysts at Salomon Smith Barney unit from the firm's investment and commercial bankers. Citigroup lawyers will provide more details to the
Securities and Exchange Commission
Nasdaq Stock Market
New York Stock Exchange
during the meeting Friday.
The proposal comes just days after SEC Chairman Harvey Pitt was reportedly
considering a plan to institute an analyst and investment banking firewall throughout Wall Street. Perceived conflicts of interest arise when stock analysts tout shares of companies with which the same firm's investment banks do business. Grubman, who hasn't conceded guilt in the matter, was recently fined $5 million for allegedly conflicted research about now-bankrupt