FINRA has fined Citigroup Global Markets $725,000 for failing to disclose conflicts of interest in its research reports and public appearances by analysts.

These conflicts of interest were “inherent in their business relationships in certain research reports from January 2007 through March 2010,” according to a public release by FINRA. By not disclosing the conflicts, the company prevented investors from being aware of potential biases in its recommendations, said Brad Bennett, executive vice president and chief of enforcement at FINRA, in the release. “Firms need to provide investors with full and accurate information so they will be able to take it into consideration before making an investment decisions.”

FINRA did not return phone calls seeking further details.

Citigroup did not make an executive available to discuss the fine, but responded with a one one-sentence email: "We are pleased to have settled this matter with FINRA. We take our disclosure systems very seriously and began adopting enhancements to our procedures prior to the inquiry.”

The announcement is reminiscent, albeit on a much smaller scale, of the $1.4 billion settlement that regulators reached in 2002 with 10 banks for conflicts of interest in their research. Citigroup was among the 10. (The others were

Credit Suisse First Boston, Deutsche Bank, Lehman Bros., Morgan Stanley, UBS Warburg, JPMorgan Chase, Goldman Sachs, Bear Stearns and Merrill Lynch.) In that settlement, banks were forced to cut ties between research and underwriting operations.

Yesterday, Citigroup announced fourth quarter earnings of $1.2 billion on revenue of $17.2 billion. This was down from $1.3 billion on revenue of $18.4 billion from the year-ago period.

Lee Conrad writes for Bank Investment Consultant.