Citigroup Global Markets Inc., F/K/A Salomon Smith Barney Inc. (Corrected Order Granting Waivers Under Section 27A(b) of the Securities Act of 1933 and Section 21E(b) of the Securities Exchange Act of 1934)
Overview
SECURITIES AND EXCHANGE COMMISSION
SECURITIES ACT OF 1933
Release No. 8321 / October 31, 2003
SECURITIES EXCHANGE ACT OF 1934
Release No. 48726 / October 31, 2003
In the Matter of
CITIGROUP GLOBAL MARKETS INC., F/K/A SALOMON SMITH BARNEY INC.,
Respondent.
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CORRECTED ORDER UNDER SECTION 27A(b) OF THE SECURITIES ACT OF 1933 AND SECTION 21E(b) OF THE SECURITIES EXCHANGE ACT OF 1934, GRANTING WAIVERS OF THE DISQUALIFICATION PROVISIONS OF SECTION 27A(b)(1)(A)(ii) OF THE SECURITIES ACT AND SECTION 21E(b)(1)(A)(ii) OF THE EXCHANGE ACT
Citigroup Global Markets Inc. ("CGM"), formerly known as Salomon Smith Barney Inc., has submitted a letter on behalf of itself and its affiliates, dated April 11, 2003, requesting a waiver of the disqualification provisions of Section 27A(b)(1)(A)(ii) of the Securities Act of 1933 ("Securities Act") and Section 21E(b)(1)(A)(ii) of the Securities Exchange Act of 1934 ("Exchange Act") arising from the settlement of a civil injunctive proceeding with the Commission. On April 28, 2003, the Commission filed a civil injunctive complaint against CGM in the United States District Court for the Southern District of New York alleging that CGM violated Sections 15(c)(1), 15(c)(2), 15(f), and 17(a) of the Exchange Act, Exchange Act Rules 15c1-2 and 17a-3, NASD Inc. ("NASD") Conduct Rules 2110, 2210(d)(1), 2210(d)(2), 3010, and 3110, and New York Stock Exchange ("NYSE") Rules 342, 401, 440, 472, and 476(a)(6).
CGM filed a "Consent of Citigroup Global Markets Inc., F/K/A Salomon Smith Barney Inc." in which it agreed, without admitting or denying the allegations of the Commission's complaint, to the entry of a Final Judgment against it. Among other things, the Final Judgment permanently enjoins CGM from violating Sections 15(c), 15(f), and 17(a) of the Exchange Act, Exchange Act Rules 15c1-2 and 17a-3, NASD Rules 2110, 2210, 3010, and 3110, and NYSE Rules 342, 401, 440, 472, and 476, orders CGM to pay $300,000,000 in disgorgement, penalties and interest, and requires CGM to comply with certain undertakings.
The safe harbor provisions of Section 27A(c) of the Securities Act and Section 21E(c) of the Exchange Act are not available for any forward looking statement that is "made with respect to the business or operations of the issuer, if the issuer . . . during the 3-year period preceding the date on which the statement was first made . . . has been made the subject of a judicial or administrative decree or order arising out of a governmental action that (I) prohibits future violations of the antifraud provisions of the securities laws; (II) requires that the issuer cease and desist from violating the antifraud provisions of the securities laws; or (III) determines that the issuer violated the antifraud provisions of the securities laws[.]" Section 27A(b)(1)(A)(ii) of the Securities Act; Section 21E(b)(1)(A)(ii) of the Exchange Act. The disqualifications may be waived "to the extent otherwise specifically provided by rule, regulation, or order of the Commission[.]" Section 27A(b) of the Securities Act; Section 21E(b) of the Exchange Act.
Based on the representations set forth in CGM's April 11, 2003 request, the Commission has determined that, under the circumstances, the request for a waiver of the disqualifications resulting from the entry of the Final Judgment is appropriate and should be granted.
Accordingly, IT IS ORDERED, pursuant to Section 27A(b) of the Securities Act and Section 21E(b) of the Exchange Act, that a waiver from the disqualification provisions of Section 27A(b)(1)(A)(ii) of the Securities Act and Section 21E(b)(1)(A)(ii) of the Exchange Act as to CGM and its affiliates resulting from the entry of the Final Judgment is hereby granted.
By the Commission.
Jonathan G. Katz
Secretary