Citigroup Inc. said it will no longer break out results for Citi Holdings after this year. The so-called bad bank was created in 2009 by then-Chief Executive Officer Vikram Pandit to house about $600 billion of troubled businesses and toxic assets. The company has since whittled that to $73 billion. “Winding down Holdings has been a longtime goal and shows Citi’s progress in becoming a simpler, smaller, safer and stronger institution,” CEO Mike Corbat, who ran the unit before succeeding Pandit, said Friday in a statement.
Housebuilder Persimmon could face protests over executive pay and the composition of its boardroom at this week’s annual general meeting.
Investor bodies have issued a warning over a share scheme set up in 2012 which could hand out an estimated £600m to 150 directors by 2022.
Some are also unhappy over the appointment of Nigel Mills as a non-executive director, questioning his independence because he is connected to the builders’ financial advisers, Citi.
Persimmon holds its AGM on Thursday, one of the first of the annual meeting season. It comes on the same day as those of miner Rio Tinto and oil company BP, which is also facing some opposition to its pay schemes.
Can’t wait for another Lemon Award to DOJ in the recent $1.2 billion settlement with Wells Fargo in defrauding the government in underwriting in a mortgage case. No criminal indictments but a settlement!
By William K. Black
We could, of course, retire the Bank Whistleblowers United’s Lemons title – for ignoring or trivializing elite fraud – by awarding it permanently to the Department of Justice (DOJ). The current award is particularly close to our hearts because it involves DOJ ignoring the sworn testimony of one our founders, Richard Bowen. DOJ did not ignore Bowen’s testimony because it was discredited, but because it was proven accurate – and should have led to the indictment of Citigroup’s top leadership team.
Two recent revelations prompt the timing our Lemon award to DOJ. First, it is five years since the release of the Financial Crisis Inquiry Commission (FCIC) report, so the criminal referrals that FCIC made were revealed. Citigroup’s senior managers were the subject of two, separate criminal referrals by FCIC. One of those two referrals was based on Bowen’s testimony. (Bowen’s explosive interview by FCIC’s staff was also made public.) The mainstream press has ignored the referral based on Bowen’s testimony.
Citigroup has failed to mollify critics of its executive pay scheme even after the bank introduced a new cap on bonuses to address their concerns.
The bank, which this year increased the potential pay package for chief executive Michael Corbat by 27 per cent to $16.5m, on Wednesday unveiled changes to how it calculates the bonuses.
But the shake-up was not enough to satisfy Institutional Shareholder Services and Glass Lewis, the influential corporate governance groups that advise investors on how to vote.
Citigroup Inc.’s board changed the way the lender calculates performance pay for executives after receiving some complaints.
Executives can now earn more than 100 percent of their annual performance-based compensation only if shareholder returns are positive, the New York-based bank said Wednesday in a regulatory filing. The plan is designed to ensure executives don’t get bonuses that are bigger than those initially awarded if total shareholder returns fall over a three-year period. The changes are reflected in performance share units granted in February.
Citigroup “heard some concerns from other stakeholders regarding Citi’s new performance share unit” program after submitting its proxy last month, according to the filing. The board’s compensation committee “remains fully committed to a robust pay-for-performance executive-compensation program.”
Banks continue to face investor backlash over pay policies blamed for rewarding behavior that helped cause the financial crisis. Citigroup overhauled its 2012 compensation plan after shareholders rejected the bank’s 2011 package amid complaints it allowed then-Chief Executive Officer Vikram Pandit to collect millions of dollars too easily.
Abdul Jaludi says banking giant terminated him because he was a whistleblower
A longtime Milford resident described by some as the Michael Jordan of data center operations at Citigroup is suing the banking industry giant alleging that the company fired him for uncovering fraudulent activity that could have cost loyal customers untold millions of dollars.
Abdul Jaludi, who was employed at the bank for 26 years until his termination in 2013, alleges in court documents filed in the Middle District of Pennsylvania, that Citigroup — through its managers, executives and attorneys — engaged in discrimination, humiliation, harassment and constructive discharge in retaliation for blowing the whistle to government agencies on repeated Securities and Exchange Commission and Financial Industry Regulatory Authority violations.
“Citigroup began hiding system problems that were affecting large numbers of customers and large dollar amounts from federal regulators,” said Jaludi, whose lived in Milford for 23 years. “At the time, my team was responsible for making sure these problems were fixed properly and didn’t occur again.”
During his more than two-decade career at the company, Jaludi said he was able to work his way up to manager of the North America Event Management Team at Citigroup, overseeing problem management — or EMS — ticket issues.
He said EMS tickets would be produced in order to alert personnel to issues. In certain instances, the tickets were being deleted, reclassified or not being created at all.
Those tickets included failures by Citigroup to post hundreds of millions in deposits to customer accounts within the regulatory requirements, he said.
But here’s the real blockbuster that Fortune and the other media have not found yet! They will, it’s there. In the records of the February 2011 business meeting it is noted that the FCIC also made a second Citi criminal referral based solely on my testimony and evidence. It is very unlikely that any other bank got two criminal referrals from the FCIC which were subsequently covered up and ignored by Attorney General Eric Holder(!) – even though the Commission saw evidence that laws were possibly violated.
The motion for referral states:
Whereas, the Commission is instructed to refer to the Attorney General of the United States and any appropriate State Attorney General any person that the Commission finds may have violated the laws of the Unites States in relation to ( the financial crisis), and
Whereas, there have been presented to the Commissioners a memorandum concerning possible violations of the laws of the United States regarding the allegations made by Richard Bowen, and
Whereas, the Commission finds that laws of the United States may have been violated with respect to such matters
Now, Therefore, Be it Resolved that the Chairman is authorized on behalf of the Commission to forward the memorandum and accompanying exhibits to the Attorney General of the United States for further investigation and possible action.
(The FCIC February 9, 2011 meeting document record is available here,page 3 and pages 63-65)
Richard Bowen testifies about fraud and corruption at CitiGroup before the Federal Crisis Inquiry Commission.
Several items have recently hit the press regarding the financial crisis of 2008 which could lead to further investigation of what actually happened and who is responsible.
One that has me excited is the National Archives releasing the first of many documents of the Financial Crisis Inquiry Commission (FCIC) which have been sealed for five years!!!
The media is already picking up on this and noted that the FCIC made a criminal referral for Robert Rubin, et al. in September of 2010. They discovered that “Rubin reportedly blessed the increased risk taking at Citi … Their direct exposures to subprime bonds were $55 billion according to the Commission. The FCIC staff notes say that “based on FCIC interviews and documents obtained during our investigation, it is clear that CEO Chuck Prince and Robert Rubin … knew this information.”
Fortune goes on to say, Prince and Rubin, were made aware of Citi’s exposure “no later than September 9, 2007.” Yet later that fall, “they told analysts that the bank’s exposure to subprime was just $13 billion, reporting it as 76% less than what actually was.”
But here’s the real blockbuster that Fortune and the other media have not found yet! They will, it’s there.
Citigroup (C.N) is being investigated by German tax authorities over an equity trading strategy known as “cum-ex” or “dividend stripping,” the U.S. bank said on Tuesday.
Dividend stripping involves buying a stock just before its dividend rights expire, then selling it, taking advantage of a now-closed legal loophole that allowed both buyer and seller to claim tax credits.
“Citi’s Germany unit has never been trader, broker or structurer of cum ex trades,” a Citi spokesman in Frankfurt said. He said the bank did act as a settlement agent for clients’ trades, but only supplied its infrastructure had no knowledge of the actual trades being carried out.
German daily Handelsblatt reported on Tuesday that the Frankfurt tax office had asked for 706 million euros ($791.07 million) in back taxes from Citi.
Analysts at Keefe Bruyette & Woods on Monday waded into the debate over breaking up the nation’s biggest banks, releasing a report that urgesCitigroup to split up.
In the report, the analysts argue that Citigroup’s stock price is being held back by regulations that require big banks to hold large amounts of capital.
The analysts suggest Citigroup could break up in several ways — by selling part of its Banamex unit in Mexico, splitting its consumer and corporate units in the United States into two companies, or selling its international operations.
Together, the moves could increase Citigroup’s market value by 57 percent, to $198 billion, the analysts estimated.
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