Citigroup controversies
Controversies tied to this brand in public sources. A listing is not a finding of fault.
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2022
Hong Kong regulator fines Citigroup for stock-trading failures
Fine or penalty
Hong Kong's securities regulator imposed a HK$348.3 million fine on Citigroup for serious regulatory failures in executing client stock trades between 2008 and 2018. The regulator cited internal-control, compliance and oversight deficiencies, and described dishonest behavior and misrepresentations to institutional clients. Citigroup said it had cooperated with the investigation and implemented remedial measures to strengthen compliance and internal controls.
Hong Kong’s securities regulator imposed a HK$348.3 million fine on Citigroup for serious regulatory failures in executing client stock trades between 2008 and 2018. The regulator cited internal-control, compliance and oversight deficiencies, and described dishonest behavior and misrepresentations to institutional clients. Citigroup said it had cooperated with the investigation and implemented remedial measures to strengthen compliance and internal controls.
Company response
Remediation — Citigroup
We have fully cooperated with the SFC’s investigation and have implemented significant remedial measures to strengthen our compliance and internal controls
Source excerpt
Citigroup employees sent clients false “indications of interest” about stocks to drum up interest, according to the SFC statement.
Hong Kong’s securities regulator imposed a fine of HK$348.3 million ($44.6 million) on Citigroup for “serious regulatory failures” when executing stock trades for clients between 2008 and 2018, citing deficiencies in internal controls, compliance and management oversight for the “pervasive dishonest behaviour.”
2021
Court rules against Citi in mistaken-payment recovery case
Ruling
A US judge ruled that the lenders who received mistaken payments from Citigroup were entitled to keep the money, rejecting Citi’s effort to recover approximately US$500 million. Citi said it planned to appeal.
Source excerpt
Citi plans to appeal the decision.
Because defendants in the case believed "in good faith and with ample justification" that the payments were for the full Revlon loan, "defendants' clients are entitled to keep the money," Judge Furman said in a 105-page ruling.
NEW YORK (AFP, BLOOMBERG) - Citigroup unexpectedly lost a legal battle to recover half a billion dollars in mistaken payments it sent out, according to a US judgment that called the debacle "one of the biggest blunders in banking history."
2020
Risk-management and data-control failures
U.S. regulators cited deficiencies in enterprise-wide risk management, data governance and internal controls, imposing penalties and requiring remediation.
2020
Revlon loan-transfer error
Citi mistakenly transferred its own funds to Revlon lenders during an attempted loan repayment, leading to litigation and regulatory scrutiny of operational controls.
2020
Ten banks sued over alleged corporate bond market price coordination
Lawsuit filed
A class action lawsuit was filed in Manhattan federal court against ten banks, including JPMorgan Chase and Bank of America, alleging that they conspired over nearly 14 years to manipulate prices in the $9.6 trillion corporate bond market. These are allegations in the complaint, not a court finding.
Source excerpt
周二在曼哈顿联邦法院提起的集体诉讼称，这些银行自2006年8月以来违反了反垄断法，在“零股”交易中向投资者收取过高费用。
摩根大通和美国银行在内的10家全球最大银行，于当地周二在曼哈顿联邦法院被起诉，因其涉嫌在近14年时间里串谋操纵9.6万亿美元公司债市场的价格，令普通投资者损失数十亿美元。
2020
Report alleges US financial firms funded Amazon-linked abuses
Issue disclosure
A report by Amazon Watch and the Association of Brazil's Indigenous Peoples alleged that six US financial firms invested more than US$18 billion over three years in companies involved in abuses in the Amazon, including environmental destruction and indigenous rights violations. The report named BlackRock, Citigroup, JPMorgan Chase, Vanguard, Bank of America and Dimensional Fund Advisors; BlackRock said it engages with companies on ESG risks and takes voting action when needed.
Company response
Denial — BlackRock
Financial firms investing in them also denied wrongdoing.
Clarification — BlackRock
We engage with companies on these and other ESG (environmental, social and governance) risks, and where they are not being appropriately managed or progress is not sufficient, we (as shareholders) take voting action against management
Source excerpt
Financial firms investing in them also denied wrongdoing.
We engage with companies on these and other ESG (environmental, social and governance) risks, and where they are not being appropriately managed or progress is not sufficient, we (as shareholders) take voting action against management
Major US financial firms are helping fund environmental destruction and indigenous rights abuses in the Amazon with billions of dollars in investments in questionable companies, according to a report published on Tuesday.
2020
US banking regulators fine Citibank $400 million
Fine or penalty
US federal banking regulators imposed a $400 million fine on Citibank for deficiencies in risk management and internal controls. The OCC cited unsafe or unsound banking practices and long-standing failures in risk management, data governance and internal controls. Citigroup said it was committed to addressing the issues and had remediation projects underway.
Company response
Remediation — Citigroup
“Citi has significant remediation projects underway to strengthen our controls, infrastructure and governance,” it said.
Source excerpt
“The OCC took these actions based on the bank’s unsafe or unsound banking practices for its long-standing failure to establish effective risk management and data governance programs and internal controls,” the agency said in an official release.
“Citi has significant remediation projects underway to strengthen our controls, infrastructure and governance,” it said.
Federal banking regulators in the United States on Wednesday levied a $400 million fine on Citigroup for deficiencies in risk management and internal controls.
2020
Citigroup agrees to pay $400 million regulatory penalty
Fine or penalty
U.S. banking regulators said Citigroup agreed to pay a $400 million penalty for longstanding deficiencies and ordered the bank to overhaul risk management, data governance and internal controls.
Source excerpt
The Federal Reserve and Office of the Comptroller of the Currency, said in separate statements that the bank must overhaul its risk management, data governance and internal controls across the company, noting that it needs "comprehensive corrective actions."
Citigroup has agreed to pay a $400 million penalty for failing to address "several longstanding deficiencies" across the company, U.S. banking regulators said on Wednesday.
2019
Former trader sues Citigroup over alleged framing
Lawsuit filed
A former Citigroup currencies trader sued the bank for at least $112 million, alleging that it framed him to protect itself during a market manipulation scandal. The claim, as reported, centers on the allegation that the bank used the trader as a shield amid the scandal. The report identifies the dispute as involving alleged malicious prosecution. No further details on the parties, the proceedings, or any outcome are provided in the source account.
Source excerpt
A former Citigroup currencies trader is suing the bank for at least $112 million, alleging that the bank ‘framed’ him to protect itself in the throes of a market manipulation scandal.
Rohan Ramchandani filed his suit on Wednesday (Thursday AEST) in federal court in Manhattan, seeking $US112 million ($167 million).
claiming his former employer "fabricated" a baseless case against him to limit damage to the bank from a government antitrust investigation.
2019
Citigroup fined by the Bank of England over regulatory information
Fine or penalty
The Bank of England fined Citigroup £44 million for submitting incomplete and inaccurate regulatory information between 2014 and 2018. The regulator said the bank's oversight and governance fell below expected standards.
Company response
Remediation — Citi
Citi has fully remediated the past regulatory reporting issues identified by the PRA, and settled this matter at the earliest possible opportunity.
Source excerpt
The PRA said the bankâs systems were inadequate, that Citi had failed to have enough people working on regulatory accuracy, that it had inadequate documentation and that its oversight and governance âfell significantly below the standards expectedâ.
The Bank of England has fined the US bank Citigroup a record £44m for submitting incomplete and inaccurate regulatory information to the Bank between 2014 and 2018.
2014
Residential mortgage-backed securities settlement
U.S. authorities alleged that Citigroup misrepresented the quality of mortgage-backed securities sold before the financial crisis. The company agreed to a multibillion-dollar settlement.
2007
Mortgage controls and subprime exposure
Internal warnings about defective mortgages and weak controls preceded severe losses connected with subprime lending and structured mortgage securities during the financial crisis.
2000
Associates consumer-lending practices
The Associates business acquired by Citigroup was criticized for mortgage flipping, deceptive marketing and the addition of unwanted credit insurance. Citi later agreed to compensate affected customers under a Federal Trade Commission settlement.