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The financial services company is alleged to have hired three convicts due to inadequate background screening policies.

Insufficient Background Screening

Financial giant Citigroup allegedly failed to properly background screen applicants for their Broker-Dealer division over a 7-year period. According to a news article, the company neglected to run background checks on numerous people who were hired between January 2010 and May 2017.

During this time, three hires were found to have criminal records that should have disqualified them. Existing laws stipulate that people with certain types of convictions may not work in positions that grant them access to sensitive financial data.

Citigroup Fined

This matter was considered by the U.S. Financial Industry Regulatory Authority (FINRA). They levied a fine against Citigroup in the amount of $1.2 million. While the company has not admitted or denied fault, they agreed to pay the full amount.

Susan Schroeder, the head of FINRA enforcement, spoke about this issue. She said: “FINRA member firms must live up to their responsibility as a gatekeeper protecting investors from bad actors. It is important that firms appropriately screen all employees for past criminal or regulatory events that can disqualify individuals from associating with member firms, even in a non-registered capacity.”

A Similar Story

Citigroup is not the only large financial company to be fined for failing to properly background screen employees. JPMorgan Chase faced a similar charge in 2017. It was alleged that this company neglected to run background checks and therefore hired former convicts who were granted access to personal banking information about thousands of customers.

Like Citigroup, JPMorgan was hit with a $1.25 million fine from FINRA.

Hiring People With Criminal Records

Employers in the United States must comply with relevant Second Chance laws that help people who have criminal records find employment. However, every employer is still expected to run background checks on potential employees, volunteers and contractors. Millions of Americans have minor convictions that would not disqualify them from most positions, but some offenses are serious enough to make the person ineligible for hire.

Both Citigroup and JPMorgan Chase were charged large fines for allegedly having inadequate background screening policies. This is a strong reminder that it is essential for every organization to perform due diligence and screen anyone who might be allowed to represent their brand.

We recommend having written hiring and background screening policies that cover what types of potentially adverse information you are looking for in a background check and which offenses could disqualify a job seeker. Have your legal counsel review and approve these policies to ensure they are compliant with applicable laws.

Are Your Background Screening Policies Sufficient?

Do you run background checks when bringing on new people? Have you implemented ongoing criminal monitoring to see if current employees incur new convictions?

If you are not properly screening your candidates, then you could face investigations, fines, a loss of trust in your brand and other repercussions. Thankfully, it’s easy to run comprehensive and compliant background checks. When you’re ready to begin, please contact us.

Our team is highly experienced at building customized screening packages that provide the facts you need to determine if someone is eligible to work for you. We are available to assist you Monday through Friday from 5am to 6pm PT.