UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

ADMINISTRATIVE PROCEEDING 

File No. 3-17808

In the Matter of

CITIGROUP GLOBAL MARKETS,

Inc.,

Respondent.

:

:

:

:

:

:

:

:

PLAN OF DISTRIBUTION

ADMINISTRATIVE PROCEEDING 

File No. 3-17809

In the Matter of

MORGAN STANLEY SMITH 

BARNEY LLC,

Respondent.

:

:

:

:

:

:

:

: 

I. OVERVIEW

1. The Division of Enforcement has prepared this Plan of Distribution (the “Plan”) 

to the United States Securities and Exchange Commission (the “Commission”) pursuant to Rule 

1101 of the Commission’s Rules on Fair Fund and Disgorgement Plans (the “Commission’s 

Rules”), 17 C.F.R. § 201.1101. This Plan provides for the distribution of a Fair Fund (the “Fair 

Fund”) comprised of disgorgement, prejudgment interest, and civil money penalties paid by 

Citigroup Global Markets, Inc. (“CGMI”) and Morgan Stanley Smith Barney LLC (“MSSB”) 

(collectively, the “Respondents”) in the above-captioned matters.1 

2. As described more specifically below, the Plan seeks to compensate certain 

investors harmed by the Respondents’ misconduct described in the Orders, in connection with 

1

 See Order Instituting Cease-and-Desist Proceedings Pursuant to Section 8A of the Securities Act of 1933, Making 

Findings, and Imposing a Cease-and-Desist Order, Securities Act Rel. No. 10288 (Jan. 24, 2017), (Admin. Proc. File 

No. 3-17808) (the “Citigroup Order”); Order Instituting Cease-and-Desist Proceedings Pursuant to Section 8A of the 

Securities Act of 1933, Making Findings, and Imposing a Cease-and-Desist Order, Securities Act Rel. No. 10290

(Jan. 24, 2017), (Admin. Proc. File No. 3-17809) (the “Morgan Stanley Order” and collectively with the Citigroup 

Order, the “Orders”).
2 

the Respondents making false and misleading statements about the foreign exchange trading 

program known as “CitiFX Alpha” developed by CGMI and sold by one of three MSSB 

financial advisors. Based on information obtained by the Commission staff during its 

investigation and the review and analysis of applicable records, the Commission staff has 

reasonably concluded that it has all records necessary to calculate each investor’s harm. As a 

result, the Fair Fund is not being distributed according to a claims-made process, so procedures 

for making and approving claims in accordance with Rule 1101(b)(4) of the Commission’s 

Rules, 17 C.F.R. § 201.1101(b)(4), are not applicable. 

3. As calculated using the methodology detailed in the Plan of Allocation (attached 

as Exhibit A), certain investors will be compensated based on their losses suffered in the form of 

excessive fees paid as a result of being invested in CitiFX Alpha sold by one of three MSSB 

financial advisors between August 2010 and July 2011 as described in the Orders. 

4. In the view of the Commission staff, this methodology constitutes a fair and 

reasonable allocation of the Fair Fund. 

5. The Commission has custody of the Fair Fund and shall retain control of the 

assets of the Fair Fund. The Plan has been approved by the Commission, and the Commission 

retains jurisdiction over its implementation.

II. BACKGROUND

6. On January 24, 2017, the Commission issued separate, but related settled Orders 

against CGMI and MSSB. In the Orders, the Commission found that, between August 2010 and 

July 2011, CGMI, a registered broker-dealer and investment adviser, developed a foreign 

exchange trading program known as CitiFX Alpha, and that registered representatives of CGMI 

and MSSB (a registered broker-dealer and an investment adviser) presented CitiFX Alpha 

program to certain brokerage customers and advisory clients of MSSB. The presentations of the 

CitiFX Alpha program were rendered materially misleading because they failed to adequately 

disclose to the relevant investors that they could be placed into the program using substantially 

more leverage than was disclosed and that mark-ups would be charged on each trade. The 

undisclosed leverage and mark-ups caused the relevant investors to suffer significant losses. As 

a result of the conduct described in the Citigroup and Morgan Stanley Orders, the Commission 

found, in their respective Orders, that CGMI and MSSB violated Section 17(a)(2) of the 

Securities Act of 1933. The Commission ordered, among other things, CGMI and MSSB to each 

pay a total of $2,963,735.61 in disgorgement, prejudgment interest, and civil money penalty to 

the Commission. In each of the Orders, the Commission created Fair Funds, pursuant to Section 

308(a) of the Sarbanes-Oxley Act of 2002, so the penalties paid, along with the disgorgement 

and interest paid, can be distributed to harmed investors. 

7. On January 31, 2023, the Commission ordered the consolidation of the assets of 

the Fair Funds created pursuant to the Orders into a single Fair Fund, the Morgan Stanley Smith 

Barney Fair Fund (referenced herein as the Fair Fund), for purposes of distribution to harmed 

investors. See Order Consolidating Fair Fund, Exchange Act Rel. No. 96777 (Jan. 31, 2023). 
3

8. The Respondents have paid in full. The Fair Fund has been deposited in a 

Commission-designated account at the United States Department of the Treasury, and any 

accrued interest will be added to the Fair Fund. The Fair Fund currently holds approximately 

$6,436,810.73. 

III. DEFINITIONS

As used in this Plan, the following definitions will apply:

9. “Administrative Costs” shall mean any administrative costs and expenses, 

including without limitation tax obligations, the fees and expenses of the Tax Administrator, and 

investment and banking costs. 

10. “Certification Form” means the form that will be mailed to each Preliminary

Claimant with the Plan Notice in order to confirm his, her, or its calculated Recognized Loss, the 

name and mailing address of the payee to which a Distribution Payment should be issued. The 

Certification Form may be accompanied by tax forms, as required, relating to the tax treatment 

of any distribution.

11. “Distribution Payment” means a payment from the Fair Fund to a Payee in 

accordance with the terms of this Plan.

12. “Eligible Claimant” means a Preliminary Claimant, who is determined to have 

suffered a Recognized Loss, pursuant to the Plan of Allocation, and who is not an Excluded 

Party or an Unresponsive Preliminary Claimant.

13. “Excluded Party” shall mean: (a) the Respondents, and Respondents’ advisers, 

agents, nominees, assigns, creditors, heirs, distributees, spouses, parents, children, or controlled 

entities; and (b) any purchaser or assignee of another Person’s right to obtain a recovery from the 

Fair Fund for value; provided, however, that this provision shall not be construed to exclude 

those Persons who obtained such a right by gift, inheritance or devise.

14. “Fair Fund” means the fund created by the Commission pursuant to Section 

308(a) of the Sarbanes-Oxley Act of 2002, for the benefit of investors harmed by Respondents’ 

violations described in the Orders. 

15. “Final Determination Notice” means the written notice sent by the Fund 

Administrator to (a) any Preliminary Claimant who timely submitted a written dispute of his, her, 

or its calculated Recognized Loss notifying the Preliminary Claimant of her resolution of the 

dispute; and (b) those Preliminary Claimants who have not returned, as described in paragraphs 

37-39, the Certification Form and any tax forms requested in the Plan Notice notifying the 

Preliminary Claimant that he, she, or it has been deemed an Unresponsive Preliminary Claimant. 

The Final Determination Notice will constitute the Fund Administrator’s final ruling regarding 

the status of the claim. A Final Determination Notice will not be sent to any Preliminary 

Claimant whose Plan Notice was returned as “undeliverable.”
4

16. “Net Available Fair Fund” means the Fair Fund, plus any interest or earnings, 

less Administrative Costs. 

17. “Payee” means an Eligible Claimant whose distribution amount is equal to or 

greater than $10.00, as calculated in accordance with the Plan of Allocation, who will receive a 

Distribution Payment.

18. “Person” means natural individuals as well as legal entities such as corporations, 

partnerships, or limited liability companies.

19. “Plan Notice” means a written notice from the Fund Administrator to each 

Preliminary Claimant regarding the Commission’s approval of the Plan, including, as 

appropriate: a statement characterizing the distribution; a link to the approved Plan posted on the 

Commission’s website, a copy of the Plan; the Certification Form and specification of any other 

information needed, such a tax forms, to prevent him, her, or it from being deemed an 

Unresponsive Preliminary Claimant; his, her, or its calculated Recognized Loss; a description of 

the tax information reporting and other related tax matters; the procedure for the distribution as 

set forth in the Plan; and the name and contact information for the Fund Administrator as a 

resource for additional information or to contact with questions regarding the distribution. 

20. “Plan of Allocation” means the methodology used by the Fund Administrator to 

calculate if a Preliminary Claimant has suffered a Recognized Loss. The Plan of Allocation is 

attached as Exhibit A. 

21. “Preliminary Claimant” means a Person, or their lawful successors, identified 

by the Fund Administrator based on her review and analysis of applicable records obtained by 

the Commission staff during its investigation, who may have suffered a loss due to the 

Respondents’ misconduct as described in the Orders in the form of excessive fees paid as a result 

of investing in CitiFX Alpha during the Relevant Period.

22. “Recognized Loss” means the amount of loss calculated in accordance with the 

Plan of Allocation.

23. “Relevant Period” is between August 2010 and July 2011.

24. “Unresponsive Preliminary Claimant” means a Preliminary Claimant whose 

address the Fund Administrator has not been able to verify or who does not timely respond to the 

Fund Administrator’s attempts to obtain information, including the Certification Form or any 

other information sought in the Plan Notice. Unresponsive Preliminary Claimants will not be 

eligible for a distribution under the Plan.

IV. TAX COMPLIANCE

25. On September 14, 2017, the Commission appointed Miller Kaplan Arase LLP as 

the tax administrator (the “Tax Administrator”) for the Fair Fund to handle the tax obligations of 
5

the Fair Fund.

2

 The Tax Administrator will be compensated for reasonable fees and expenses 

from the Fair Fund in accordance with its Revised 2017-2018 Engagement Letter Agreement 

with the Commission.3

26. The Fair Fund constitutes a Qualified Settlement Fund (“QSF”) under Section 

468B(g) of the Internal Revenue Code of 1986, as amended, 26 U.S.C. § 468B(g), and related 

regulations, 26 C.F.R. §§ 1.468B-1 through 1.468B-5. The Tax Administrator is the 

administrator of such QSF for purposes of Treas. Reg. § 1.468B-2(k)(3)(I) and shall satisfy the 

tax-related administrative requirements imposed by Treas. Reg. § 1.468B-2, including, but not 

limited to:

(a) Obtaining a taxpayer identification number; 

(b) Requesting funds necessary for the timely payment of all applicable taxes, 

the payment of taxes for which the Tax Administrator has received funds, 

and the filing of applicable returns; and 

(c) Fulfilling any information reporting or withholding requirements imposed 

on distributions from the Fair Fund.

27. All tax obligations will be paid from the Fair Fund, subject to the review and 

approval of Commission staff.

V. FUND ADMINISTRATOR

28. Jennifer Cardello is the fund administrator for the Fair Fund (“Fund 

Administrator”). As a Commission employee, the Fund Administrator shall receive no 

compensation, other than her regular salary as a Commission employee, for her services in 

administering the Fair Fund. In accordance with Rule 1105(c) of the Commission’s Rules,4 no 

bond is required since the Fund Administrator is a Commission employee.

29. The Fund Administrator will be responsible for administering the Fair Fund in 

accordance with the Plan. This will include, among other things, taking reasonable steps to 

obtain accurate mailing information for Preliminary Claimants; disseminating the Plan Notice; 

preparing accountings; cooperating with the Tax Administrator appointed by the Commission to 

satisfy any tax liabilities and to ensure compliance with income tax reporting requirements, 

including but not limited to Foreign Account Tax Compliance Act (FATCA); disbursing the Fair 

Fund in accordance with this Plan, as ordered by the Commission; and researching and 

reconciling errors and reissuing payments, when possible. 

2

 See Corrected Order Appointing Tax Administrator, Exchange Act Rel. No. 81634 (Sept. 14, 2017), (Admin. 

Proc. File No. 3-17808); Corrected Order Appointing Tax Administrator, Exchange Act Rel. No. 81633 (Sept. 14, 

2017), (Admin. Proc. File No. 3-17809). 3

 See Omnibus Order Directing the Appointment of Tax Administrator in Administrative Proceedings that Establish 

Distribution Funds, Exchange Act Rel. No. 81057 (June 30, 2017).

4

 17 C.F.R. § 201.1105(c).
6 

30. To carry out the purposes of this Plan, the Fund Administrator is authorized to 

make and implement immaterial changes to the Plan. If a change is deemed to be material by the 

Fund Administrator, Commission approval is required prior to implementation by amending the 

Plan.

31. The Fund Administrator may extend any procedural deadline contained in the 

Plan for good cause shown, if agreed upon by the Commission staff. 

VI. PLAN PROCEDURES

Specification of Preliminary Claimants

32. Using information obtained during its investigation, the Commission has 

identified the Preliminary Claimants. Preliminary Claimants are limited to certain investors who 

may have suffered a loss due to the Respondents’ misconduct in the form of excessive fees paid 

as a result of being invested in CitiFX Alpha sold by one of three MSSB financial advisors 

during the Relevant Period as described in the Orders. 

Procedures for Locating and Notifying Preliminary Claimants 

33. Within thirty (30) days of Commission approval of the Plan, the Fund 

Administrator will send the Plan Notice to each Preliminary Claimant’s last known email address 

(if known) and/or mailing address. 

Undeliverable Mail

34. If any mailing is returned as undeliverable, the Fund Administrator will make the 

best practicable efforts to ascertain a Preliminary Claimant’s correct address. If another address 

is obtained, the Fund Administrator will then resend it to the Preliminary Claimant’s new address 

within twenty-one (21) days of receipt of the returned mail. If the mailing is returned again, and 

the Fund Administrator, despite best practicable efforts, is unable to find a Preliminary 

Claimant’s correct address, the Fund Administrator, in her discretion, may deem such 

Preliminary Claimant an Unresponsive Preliminary Claimant. 

35. Any Preliminary Claimant who relocates or otherwise changes contact 

information after receipt of the Plan Notice must promptly communicate any change in address 

or contact information to the Fund Administrator. 

Procedures to Request Plan Notice

36. Any Person who does not receive a Plan Notice, as described in paragraph 33, but 

who is aware of this Plan (e.g., through other Preliminary Claimants or on www.sec.gov) and 

believes they should be included as a Preliminary Claimant should contact the Fund 

Administrator within sixty (60) days from the approval of the Plan to establish that they should 

be considered a Preliminary Claimant. The Fund Administrator will send the Person a Plan 
7 

Notice within fifteen (15) days of receiving the Person’s documentation, if the Fund 

Administrator determines that the Person should have received a Plan Notice. 

Certification Requirement by Preliminary Claimants and Failure to Respond to Plan 

Notice

37. In order to maintain classification as a Preliminary Claimant, the Certification 

Form must be signed by the Preliminary Claimant under penalty of perjury under the laws of the 

United States and returned to the Fund Administrator by the deadline stated in the Plan Notice. 

The Certification Form must be executed by the Preliminary Claimant, unless the Fund 

Administrator accepts such Certification Form from a successor, heir, administrator, or other 

Person authorized to act on the Preliminary Claimant’s behalf. Those authorized to act on behalf 

of Preliminary Claimants will be eligible to participate in the distribution to the same extent the 

original investor would have been eligible under the terms of the Plan.

38. The Fund Administrator will review all Certification Forms. Each Preliminary 

Claimant will have the burden of proof to establish their identity as a Preliminary Claimant. The 

Fund Administrator will have the right to request, and the Preliminary Claimant will have the 

burden of providing to the Fund Administrator, any additional information and/or documentation 

deemed relevant by the Fund Administrator. 

39. If a Preliminary Claimant fails to return the Certification Form and any other 

information needed, such a tax forms, within forty-five (45) days from the initial mailing of the 

Plan Notice, the Fund Administrator will make no fewer than two (2) attempts to contact the 

Preliminary Claimant by telephone or email, if known to the Fund Administrator. If a 

Preliminary Claimant fails to respond to the Fund Administrator’s contact attempts as described 

in this paragraph, the Fund Administrator, in her discretion, may deem such Preliminary 

Claimant an Unresponsive Preliminary Claimant. 

Dispute Process

40. Disputes will be limited to the amount of the Preliminary Claimant’s calculated 

Recognized Loss. Within sixty (60) days of the initial mailing Plan Notice, the Fund 

Administrator must receive a written communication detailing any dispute along with any 

supporting documentation. The Fund Administrator will investigate the dispute, and such 

investigation will include a review of the written dispute as well as any supporting 

documentation. 

Final Determination Notices

41. Within one hundred fifty (150) days of Commission approval of the Plan, the 

Fund Administrator will send a Final Determination Notice to (a) any Preliminary Claimant who 

timely submitted a written dispute, as described in paragraph 40 above, notifying the Preliminary 

Claimant of her resolution of the dispute; and (b) those Preliminary Claimants who have not 

returned, as described in paragraphs 37-39 above, the Certification Form and any tax forms 

requested in the Plan Notice, notifying the Preliminary Claimant that he, she, or it has been 
8 

deemed an Unresponsive Preliminary Claimant. A Final Determination Notice will not be sent 

to any Preliminary Claimant whose Plan Notice was returned as “undeliverable.” The Final 

Determination Notice will constitute the Fund Administrator’s final ruling regarding the status of 

the claim.

Distribution Methodology 

42. The Fund Administrator will calculate each Preliminary Claimant’s Recognized 

Loss in accordance with the Plan of Allocation. All Preliminary Claimants who are determined 

to have a Recognized Loss, and who are not deemed an Excluded Party or an Unresponsive 

Preliminary Claimant will be deemed an Eligible Claimant. 

43. No Distribution Payments will be made for less than $10.00. If an Eligible 

Claimant’s Recognized Loss, in accordance with the Plan of Allocation, calculates to a 

distribution amount less than $10.00, that Eligible Claimant will be deemed ineligible to receive 

a Distribution Payment and his, her, or its distribution amount will be reallocated on a pro rata

basis to Eligible Claimants whose distribution amounts are greater than or equal to $10.00. All 

Eligible Claimants whose Recognized Loss calculates to a distribution amount equal to or greater 

than $10.00 will be deemed a Payee and receive a Distribution Payment. 

Establishment of a Reserve

44. Before determining the amount of funds available for distribution and calculating 

each Payee’s Distribution Payment, the Fund Administrator, in conjunction with the Tax 

Administrator, will establish a reserve to pay Administrative Costs and to accommodate any 

unexpected expenditures (the “Reserve”).

45. After all Distribution Payments are made and Administrative Costs paid, any 

remaining amounts in the Reserve will become part of the Residual described in paragraph 58 

below. 

Preparation of the Payment File 

46. Within one hundred eighty (180) days of Commission approval of the Plan, the 

Fund Administrator will compile the Payee information, including the name, address, calculated 

Recognized Loss, and the amount of the Distribution Payment for all Payees (the “Payee List”) 

to make disbursements through the U.S. Treasury. 

Distribution of the Fair Fund 

47. Pursuant to Rule 1101(b)(6) of the Commission’s Rules, 17 C.F.R. § 

201.1101(b)(6), the Commission staff will obtain an order from the Commission authorizing the 

disbursement of funds from the Net Available Fair Fund for distribution to Payees in accordance 

with the Payee List. The U.S. Treasury will mail checks or electronically transfer funds to each 

Payee as instructed by the Fund Administrator in accordance with the Payee List.
9 

48. All checks will bear a stale date of one (1) year from the date of issuance. Checks 

that are not negotiated by the stale date will be voided. A Payee’s claim will be extinguished if 

he, she, or it fails to negotiate his, her or its check by the stale date, and the funds will remain in 

the Fair Fund, except if a check reissue has been requested before the stale date, such request is 

governed by paragraph 52. 

49. All Distribution Payments will be preceded or accompanied by a communication 

that includes, as appropriate: (a) a statement characterizing the distribution; (b) a statement that 

the tax treatment of the distribution is the responsibility of each Payee and that the Payee should 

consult his, her or its tax advisor for advice regarding the tax treatment of the distribution; (c) a 

statement that checks will be void and cannot be reissued after one (1) year from the date the 

original check was issued; and (d) contact information for the Fund Administrator for questions 

regarding the Distribution Payment. The letter or other mailings to Payees characterizing a 

Distribution Payment will be prepared by the Tax Administrator for review and approval by the 

Commission staff. 

50. All Distribution Payments, either on their face or in the accompanying mailing, 

will clearly indicate that the money is being distributed from the Fair Fund established by the 

Commission to compensate investors for harm as a result of securities law violations.

Post Distribution; Handing of Returned or Uncashed Checks; and Reissues 

51. The Fund Administrator shall use her best efforts to make use of commercially 

available resources and other reasonably appropriate means to locate all Payees whose checks 

are returned to the Fund Administrator as “undeliverable.” If new address information becomes 

available, the Fund Administrator will repackage the distribution check and send it to the new 

address. If new address information is not available after a diligent search (and in no event no 

later than one (1) year after the initial mailing of the original check) or if the distribution check is 

returned again, the check shall be voided and the Fund Administrator shall instruct the issuing 

financial institution to stop payment on such check. If the Fund Administrator is unable to find a 

Payee’s correct address, the Fund Administrator, in her discretion, may remove such Payee from 

the distribution and the allocated Distribution Payment will remain in the Fair Fund for 

distribution, if feasible, to the remaining Payees. 

52. The Fund Administrator will reissue checks or electronic payments to Payees 

upon the receipt of a valid, written request from the Payee if prior to the initial stale date. In 

cases where a Payee is unable to endorse a Distribution Payment check as written (e.g., name 

changes, IRA custodian changes, or recipient is deceased) and the Payee or a lawful 

representative requests the reissuance of a Distribution Payment check in a different name, the 

Fund Administrator will request, and must receive, documentation to support the requested 

change. The Fund Administrator will review the documentation to determine the authenticity 

and propriety of the change request. If, in the discretion of the Fund Administrator, such change 

request is properly documented, the Fund Administrator will issue an appropriately redrawn 

Distribution Payment to the requesting party. In no event will a check be reissued after one (1) 

year from the date of the original issuance without the approval of Commission staff. 
10 

53. The Fund Administrator will work with the U.S. Treasury and maintain 

information about uncashed checks and any returned items due to non-delivery, insufficient 

addresses, and/or other deficiencies. The Fund Administrator is responsible for researching and 

reconciling errors and reissuing payments when possible. The Fund Administrator is also 

responsible for accounting for all payments. The amount of all uncashed and undelivered 

payments will continue to be held in the Fair Fund. 

54. The Fund Administrator will make and document its best efforts to contact Payees 

to follow-up on the status of uncashed distribution checks over $100 (other than those returned 

as “undeliverable”) and take appropriate action to follow-up on the status of uncashed checks. 

The Fund Administrator may reissue such checks, subject to the time limits detailed herein.

55. At the discretion of the Fund Administrator, certain costs that were not factored 

into the Reserve, such as bank fees for the return of a payment, may reduce the Payee’s 

Distribution Payment. In such situations, the Fund Administrator will immediately notify the 

Tax Administrator of the reduction in the Distribution Payment. 

Receipt of Additional Funds 

56. Should any additional funds be received pursuant to Commission or Court order, 

agreement, or otherwise, prior to the Commission’s termination of the Fair Fund, such funds will 

be added to the Fair Fund and distributed, if feasible, in accordance with the Plan, pursuant to the 

Commission’s Rules.

Disposition of Undistributed Funds 

57. If funds remain following the initial distribution, the Fund Administrator may 

seek subsequent distribution(s) of any remaining funds, pursuant to the Commission’s Rules. All 

subsequent distributions shall be made in a manner that is consistent with this Plan. 

58. A residual will be established for any amounts remaining after the final 

disbursement to Payees from the Fair Fund and the payment of all Administrative Costs (the 

“Residual”). The Residual may include funds from, among other things, amounts remaining in 

the Reserve, distribution checks that have not been cashed, checks or electronic payments that 

were not delivered or were returned to the Commission, and tax refunds received due to the Fair 

Fund’s overpayment of taxes or for waiver of IRS penalties. 

59. Once the Fund Administrator deems further distribution of the Fair Fund to 

investors infeasible, the Fund Administrator will direct any uncashed Distribution Payments to 

be voided, and such funds will be added to the Residual. 

60. All funds remaining in the Residual that are infeasible to distribute to investors 

will be transferred to the U.S. Treasury after the final accounting is approved by the 

Commission. Returning such money to the Respondents would be inconsistent with the 

equitable principle that no Person should profit from his wrongdoing. Therefore, in these 

circumstances distributing disgorged funds to the U.S. Treasury is the most equitable alternative. 
11 

Administrative Costs 

61. All Administrative Costs will be paid from the Fair Fund in accordance with the 

Commission’s Rules. 

Accountings 

62. When the final distribution is completed, the Fund Administrator will prepare a 

final accounting pursuant to Rule 1105(f) of the Commission’s Rules, 17 C.F.R. § 201.1105(f), 

for the Commission’s approval prior to termination of the Fair Fund and discharge of the Fund 

Administrator. Since the funds are being held in a Commission-designated account at the U.S. 

Treasury and the Fund Administrator is a Commission employee, no interim accountings will be 

made.

Termination of the Fair Fund 

63. The Fair Fund will be eligible for termination and the Fund Administrator will be 

eligible for discharge after all of the following have occurred (a) a final accounting, in a standard 

accounting format provided by the Commission staff, has been submitted to and approved by the 

Commission; and (b) all Administrative Costs have been paid. Once the Commission has 

approved the final accounting, the Commission staff will seek an order from the Commission 

authorizing: (a) the transfer of the Residual that is infeasible to return to investors, and any 

amounts returned to the Fair Fund in the future that is infeasible to return to investors, to the 

general fund of the U.S. Treasury, subject to Section 21F(g)(3) of the Securities Exchange Act of 

1934; (b) discharge of the Fund Administrator; and (c) termination of the Fair Fund. 
Exhibit A

PLAN OF ALLOCATION

This Plan of Allocation is designed to compensate certain investors based on their losses 

suffered in the form of excessive fees paid as a result of being invested in CitiFX Alpha, a 

foreign exchange trading program developed by CGMI and sold by one of three MSSB financial 

advisors between August 2010 and July 2011 as described in the Orders.1 Based upon records 

obtained by the Commission during its investigation, the Fund Administrator has identified those 

investors, or their lawful successors, who may have suffered losses due to Respondents’ 

misconduct described in the Orders during the Relevant Period. Commission staff economists 

performed the calculations described below using account-level information obtained by the 

Commission in the course of its investigation. 

The Fund Administrator will calculate each Preliminary Claimant’s loss (“Recognized 

Loss”) as the total amount of undisclosed per-trade fee markups the Preliminary Claimant paid in 

connection with the CitiFX Alpha trading program. 

To avoid payment of a windfall, the Recognized Loss will be reduced by the amount of 

any compensation for the loss that resulted from the conduct described in the Order that was 

received from another source (e.g., class action settlement), to the extent known by the Fund 

Administrator.

 Any Preliminary Claimant who suffered a Recognized Loss pursuant to this Plan of 

Allocation, and who is not an Excluded Party or an Unresponsive Preliminary Claimant, as 

defined in the Plan, will be deemed an Eligible Claimant.

Additional Provisions

Allocation of Funds: Since the Net Available Fair Fund exceeds the sum of Recognized 

Losses of all Eligible Claimants, each Eligible Claimant’s distribution amount will equal his, her 

or its Recognized Loss, plus “Reasonable Interest.” The distribution amount will be subject to 

the “Minimum Distribution Amount.” 

Reasonable Interest: Since the Net Available Fair Fund exceeds that necessary to pay all 

Eligible Claimants their Recognized Losses in full, the Fund Administrator will include interest in the 

distribution amount to compensate Eligible Claimants for the time value of their Recognized Losses. 

Reasonable Interest will be calculated using the short-term Applicable Federal Rate plus three percent 

(3%), compounded quarterly from the date of each Eligible Claimants’ last at-issue transaction through 

the approximate date of the disbursement of the funds. If there are insufficient funds to pay Reasonable 

Interest in full to all Eligible Claimants, Reasonable Interest will be awarded on a pro-rata basis from 

the excess funds.

Minimum Distribution Amount: The Minimum Distribution Amount will be $10.00 

(inclusive of Reasonable Interest). If an Eligible Claimant’s distribution amount is less than the 

1

 All capitalized terms used herein but not defined shall have the same meanings ascribed to them in the Plan.
2 

Minimum Distribution Amount, he, she, or it will be deemed ineligible to receive a Distribution 

Payment and his, her, or its distribution amount will be reallocated on a pro-rata basis to Eligible 

Claimants whose distribution amounts are greater than or equal to the Minimum Distribution 

Amount. 

Payee: An Eligible Claimant whose distribution amount equals or exceeds the Minimum 

Distribution Amount will be deemed a Payee. 

Distribution Payment: Each Payee will receive a Distribution Payment for his, her, or its 

distribution amount. In no event will a Payee receive from the Fair Fund more than his, her, or 

its Recognized Loss plus Reasonable Interest.