SEC Probes Three From Citigroup

The staff of the Securities and Exchange Commission is considering recommending charges against two former Citigroup Inc. employees and a current employee, the financial services giant said Friday.

The possible charges relate to the creation and operation of an internal transfer agent unit to primarily serve the Smith Barney family of funds, according to a Citigroup filing with the SEC.

Transfer agents keep shareholder records and issue new share certificates. Their operations, governed by detailed SEC regulations, also include distributing proxies, dividends and annual reports.

The three under investigation by the SEC include Thomas W. Jones, the former chief executive of Citigroup Global Investment Management. The other two employees were not identified.

Citigroup President Robert Willumstad said in a memo released Friday by Citigroup that the three had received Wells notices, in which the SEC gives warning that civil enforcement charges may be coming.

Willumstad also said that neither the notice nor the investigation was related to Jones’ exit.

Citigroup’s shares fell 39 cents to $42.56 on Friday on the New York Stock Exchange.

Citigroup on Tuesday said Jones would depart along with Vice Chairman Deryck Maughan and Peter Scaturro, chief executive of Citigroup Private Bank.