(CN) - Morgan Stanley and Citigroup Inc. each agreed to pay $2.96 million to settle charges they made false and misleading statements to investors about a foreign exchange trading program.
The Securities and Exchange Commission said Tuesday that sales staff from both companies sold the program, called CitiFX Alpha, to Morgan Stanley customers while failing to tell them they would have to borrow more than advertised to participate and that markups would be charged on each trade.
The government claims that as a result of these omissions, investors suffered significant loses.
Morgan Stanley and Citigroup did not deny or admit the government's findings, but agreed to pay a $2.25 million civil fine and to return $624,000 in profits plus $89,000 in interest.
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