Citigroup Global Markets has agreed to pay $18.3m to the US Securities and Exchange Commission (SEC) to settle allegations of overbilling investment advisory clients and misplacing client contracts.

The regulator alleged the company of overcharging at least 60,000 advisory clients nearly $18m in fees over a 15-year period due to failures in confirming the accuracy of billing rates in its computer systems compared to fee rates in client contracts, billing histories, and other documents. The overcharged clients have been reimbursed with interest, SEC said.

Citigroup was also accused of failing to locate about 83,000 client contracts that were opened between 1990 and 2012. SEC said that the clients whose contracts were lost were charged about $3.2m in fees by the company.

The watchdog also alleged Citigroup of improperly collecting fees when clients suspended their accounts.

Under the arrangement with SEC, Citigroup will pay $3.2m in disgorgement of the excess fees collected due to the missing contracts, $800,000 in interest, as well as a $14.3m penalty.

SEC New York regional office director Andrew Calamari said: “Advisory clients have every expectation that the fees charged by their financial adviser reflect the negotiated rate. Citigroup failed to take the necessary precautions to ensure clients were billed in a manner consistent with their advisory agreements.”