UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934 

Release No. 98940 / November 15, 2023

ADMINISTRATIVE PROCEEDING

File No. 3-17808

In the Matter of

CITIGROUP GLOBAL MARKETS, 

INC.,

Respondent.

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ORDER APPROVING 

PLAN OF DISTRIBUTION

ADMINISTRATIVE PROCEEDING

File No. 3-17809

In the Matter of

MORGAN STANLEY SMITH 

BARNEY LLC,

Respondent.

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On January 24, 2017, the Commission issued separate, but related settled orders 

(collectively, the “Orders”) against Citigroup Global Markets, Inc. (“CGMI”) 1and Morgan 

Stanley Smith Barney LLC (“MSSB”).2 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 the marketing materials 

failed to adequately disclose that the investors 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 certain investors to suffer losses. 

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).

2

 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. 10290 (Jan. 24, 2017), (Admin. Proc. File 

No. 3-17809).
2

As a result of the conduct described in the Orders, the Commission found 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 a Fair Fund, 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. 

On January 31, 2023, the Commission issued an order consolidating the assets of the Fair 

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

Fair Fund (the “Fair Fund”), for purposes of distribution to harmed investors.3 

The Fair Fund includes the $5,927,471.22 paid by the Respondents. The assets of the 

Fair Fund are subject to the continuing jurisdiction and control of the Commission. The Fair 

Fund and has been deposited in a Commission-designated account at the U.S. Department of the 

Treasury, and any interest accrued will be added to the Fair Fund.

On September 14, 2023, the Division of Enforcement, pursuant to delegated authority, 

published a Notice of Proposed Plan of Distribution and Opportunity for Comment (“Notice”),4

pursuant to Rule 1103 of the Commission’s Rules on Fair Fund and Disgorgement Plans 

(“Commission’s Rules”);5and simultaneously posted the Proposed Plan of Distribution (the 

“Proposed Plan”). The Notice advised interested persons that they could obtain a copy of the 

Proposed Plan from the Commission’s public website or by submitting a written request to 

Jennifer Cardello, United States Securities and Exchange Commission, email at 

cardelloj@sec.gov. The Notice also advised that all persons desiring to comment on the 

Proposed Plan could submit their comments, in writing, within 30 days of the Notice. The 

Commission received no comments on the Proposed Plan during the comment period. 

The Proposed Plan provides for the distribution of the Net Available Fair Fund6to certain 

investors who suffered a loss in the form of excessive fees paid as a result of investing 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. 

The Division of Enforcement now requests that the Commission approve the Proposed 

Plan. 

3

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

4

 Exchange Act Rel. No. 98399 (Sept. 14, 2023).

5

 17 C.F.R. § 201.1103.

6

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

Plan.
3

Accordingly, it is hereby ORDERED, pursuant to Rule 1104 of the Commission’s Rules,7

that the Proposed Plan is approved, and the approved Plan of Distribution shall be posted 

simultaneously with this order on the Commission’s website at www.sec.gov.

For the Commission, by the Division of Enforcement, pursuant to delegated authority.8

Vanessa A. Countryman

Secretary 

7 17 C.F.R. § 201.1104. 

8

 17 C.F.R. § 200.30-4(a)(21)(iv).