Japan to order Citi suspend some business: sources

TOKYO (Reuters) - Japan's financial regulator will order Citigroup C.N to suspend some of its retail business in Japan for lax oversight of money laundering controls, two people familiar with the matter said on Thursday.

The Financial Services Agency will announce the punishment on Friday, said the sources, who declined to be identified because the information is not yet public.

It was not immediately clear how long the suspension would last, or what operations would be affected.

A spokesman for Citigroup in Japan declined to comment, while the regulator was not immediately available for comment.

It will not be the first time that the U.S. bank has run foul of Japanese regulators. In 2004 Citigroup was forced to shut down its private banking business for violations that also included loose money-laundering controls. That incident prompted then-chief executive Charles Prince to make a public bow of apology in Japan, the traditional sign of remorse for Japanese executives and politicians.

The U.S. bank has been forced to sell off assets globally to raise cash after suffering more than $85 billion in losses on toxic assets.

The bank said last month it would sell its Japanese brokerage and key investment units to Sumitomo Mitsui Financial Group 8316.T, Japan's third largest bank, for $5.9 billion.

It is also looking to sell its Japanese asset management arm, Nikko Asset Management.

Reporting by Taro Fuse and David Dolan; Editing by Rodney Joyce