Citibank unit suspended in Japan

Citibank has been suspended for violations

Japan's financial regulator has ordered Citibank, a unit of Citigroup, to suspend activities at one of its divisions from 10 to 16 August for breaking government rules.

The Financial Services Agency (FSA) said it had ordered operations to be suspended partly because of improper securities transactions on behalf of clients.

"After conducting our own investigation Citibank brought the violations of Japanese law to the attention of the FSA staff in advance of their inspection of the bank," a Citibank spokesman told BBC News Online.

"None of the violations were done willfully although we regret their occurrence and any inconvenience they may have caused our customers," he added.

The FSA also urged the bank to strengthen internal systems to prevent the violations occurring again.

Tough measures

Japanese officials said Citibank had violated regulations between August 1997 and December 2000, by promoting financial products that can only be sold by securities companies in Japan.

Citibank Japan's alternative investment strategies unit will be suspended which the bank said will not affect its other products and services.

Measures have been taken to ensure that violations will not happen again, Citibank said.

The move comes as Japan's regulator tries to bolster confidence in the financial markets by taking a strict stance on irregularities.

The FSA has recently also fined local units of other international financial groups Societe Generale and Goldman Sachs for violating government regulations.

Citigroup is the world's largest financial services firm.