Citigroup: a culture and history of tax evasion By Lucy Komisar Contents Introduction The Private Bank The Offshore System In Their Own Words The Nassau Parking Scandal of 1975-1980: laundering profits Laundering Money for Pinochet Australia: tax evasion scheme of late 1980s Private Banking, the key to the system: Laundering money for Salinas, Bongo, the Abachas Argentine offshore bank scam of the 1990s, plus a secret videotape wherein a Citibanker offers to launder a "businessman's" profits Moving Russian money offshore in the 1990s Japan: helping clients evade taxes The Clearstream accounts: another secret system for moving money Today: Private Bank chief for Latin America and Europe America lauds secrecy List of Citigroup's offshore subsidiaries The curious Jersey network Unanswered questions Watch what they do, not what they say Sources & documentation This report describes and details a history of tax evasion by the world’s largest financial conglomerate, Citigroup.
Citing bank secrecy laws, Citigroup gave the U.S. Senate Investigations Subcommittee very limited information about Pinochet accounts and transactions involving its foreign affiliates in offshore venues such as the Bahamas or Switzerland and even Chile, Argentina and the UK.
Critical account of Citigroup’s 100- year history in Argentina, including its role in creating the country’s massive debt, its political influence, and its laundering of money for offshore shell banks.
[I]t allows various tax benefits and administrative benefits to the client ....” Citigroup opened 29 accounts or CDs for the Pinochets in the name of offshore corporations or trusts: five in the name of Meritor Investments; seven in the name of Trust MT4964N; and 17 in the name of Redwing Holdings.
Going back decades, it is a story of repeated, aggressive tax evasion for itself and clients, depriving governments and therefore citizens of huge amounts of funds and carried out with relative impunity. The Tax Justice Network nominates Citigroup for the Public Eye on Davos Award for excelling in socially irresponsible behavior by engaging in tax evasion and facilitating tax evasion by its clients.
General Accounting Office (GAO) issued a report that Citigroup from 1991 through January 2000 had allowed more than $800 million in suspicious Russian funds to flow through 136 U.S. accounts tied to shell companies registered in Delaware.
A day later, the head of Citigroup’s global anti-money laundering group responded that an earlier global search had not turned up any Pinochet accounts at the bank.
Moving Russian money offshore in the 1990s Japan: helping clients evade taxes The Clearstream accounts: another secret system for moving money Today: Private Bank chief for Latin America and Europe America lauds secrecy List of Citigroup's offshore subsidiaries The curious Jersey network Unanswered questions Watch what they do, not what they say Sources & documentation This report describes and details a history of tax evasion by the world’s largest financial conglomerate, Citigroup.
Citigroup Avoided Paying $11.5 Billion In Taxes Thanks To Tax Shelters | HuffPost Impact
Over the next four years, Citigroup aggressively moved to make use of shelters in order to shield its earnings from U.S. taxation, doubling the amount of money it held offshore, according to a new report by the U.S. Public Interest Research Group, a nonprofit that advocates for corporate tax reform.
Wages & economic policyConfirmed
Citigroup offered to help an Argentine businessman evade Argentine taxes through a secret 2001 videotape
The full report, available at www.taxjustice.net or in advance (contact media@taxjustice.net, +44 (0)7712 655130), includes: • An examination of the puzzling ownership structure of a network of Citigroup subsidiaries in Jersey • Citigroup's unprecedented use of secret 'Clearstream' bank accounts - more than any other bank • Transcripts of a secret 2001 videotape showing a Citibank employee offering to help an Argentine businessman to evade Argentine taxes • Profit-laundering for Russian plutocrats in the late 1990s • Citigroup's provision of secretive banking facilities for Chilean dictator Augusto Pinochet; Omar Bongo, President of Gabon; Raúl Salinas, brother of the former President of Mexico, imprisoned in Mexico for murder; sons of General Sani Abacha, former military dictator of Nigeria; and two daughters of ex-President Suharto of Indonesia • An illegal foreign exchange scheme to move Citigroup profits to low-tax regimes through Nassau in the late 1970s.
The full report, available at www.taxjustice.net or in advance (contact media@taxjustice.net, +44 (0)7712 655130), includes: • An examination of the puzzling ownership structure of a network of Citigroup subsidiaries in Jersey • Citigroup's unprecedented use of secret 'Clearstream' bank accounts - more than any other bank • Transcripts of a secret 2001 videotape showing a Citibank employee offering to help an Argentine businessman to evade Argentine taxes • Profit-laundering for Russian plutocrats in the late 1990s • Citigroup's provision of secretive banking facilities for Chilean dictator Augusto Pinochet; Omar Bongo, President of Gabon; Raúl Salinas, brother of the former President of Mexico, imprisoned in Mexico for murder; sons of General Sani Abacha, former military dictator of Nigeria; and two daughters of ex-President Suharto of Indonesia • An illegal foreign exchange scheme to move Citigroup profits to low-tax regimes through Nassau in the late 1970s
Labor & working conditionsConfirmed
Jane Fraser orders 1000 job cuts
Citigroup CEO Jane Fraser announced 1,000 job cuts and warned staff they are not graded on effort.
Citigroup CEO Jane Fraser, one of Fortune‘s Most Powerful Women—and the top female executive on Wall Street—is pushing ahead with about 1,000 job cuts and has warned staff that “we are not graded on effort” in a fiery internal memo setting a tougher tone for 2026.
Corporate conductConfirmed
Citigroup ordered to pay $285 million in disgorgement, interest, and penalties
Citigroup was ordered to pay $285,000,000 in disgorgement, prejudgment interest, and penalties.
The Board of Governors hereby assesses Citigroup a civil money penalty in the amount of $8,600,000 to be paid upon the execution of this Consent Assessment Order by Fedwire transfer of immediately available funds to the Federal Reserve Bank of Richmond, ABA No. 05 1000033, beneficiary, Board of Governors of the Federal Reserve System.
WHEREAS, the conduct described above occurred while Citigroup and CitiFinancial were subject to the Consent Order, which required them to remedy deficiencies relating to mortgage servicing; WHEREAS, as a result of the conduct described above, Citigroup, through CitiFinancial, engaged in unsafe or unsound banking practices within the meaning of section 8 of the FDI Act, as amended (12 U.S.C. § 1818); WHEREAS, Citigroup and CitiFinancial have taken steps to address the deficiencies that were the subject of the Consent Order, replaced, where necessary, the affidavits potentially impacted by the conduct described above with properly executed and notarized affidavits, and taken steps to correct weaknesses related to the conduct described above; WHEREAS, as of September 15, 2017, Citigroup has completed the exit of the mortgage servicing business of CitiFinancial; WHEREAS, the Board of Governors issues this Order of Assessment of a Civil Money Penalty Issued Upon Consent (the “Consent Assessment Order”) against Citigroup; WHEREAS, Citigroup has consented to the assessment of a civil money penalty in the amount of $8,600,000 by the Board of Governors pursuant to sections 8(b)(3) and (i)(2)(B) of the FDI Act, as amended (12 U.S.C.
Corporate conductSettlement
Regulators fined Citigroup $400 million and ordered the firm to improve its risk management systems
Later that year, banking regulators fined Citigroup $400 million and ordered the firm to improve its risk management systems.
One such example was when, in 2020, Citigroup accidentally wired $900 million to a group of lenders at beauty company Revlon instead of an intended interest payment of just $7.8 million.
A federal appeals court on Tuesday said a Citigroup vice president was not entitled to a share of a $400 million civil fine that the bank agreed to pay in October 2020 over its risk management failures.
WHEREAS, an examination conducted by the Reserve Bank in 2023 regarding Citigroup’s remediation efforts related to the 2020 Order (the “2020 Order execution exam”) found that Citigroup’s progress in executing its plan to enhance its data quality management program under paragraph 4 of the 2020 Order, or toward the implementation of appropriate compensating controls has not been adequate;
Labor & working conditionsAllegation
Citi is accused of discriminating against Armenian Americans
Citi is accused of discriminating against Armenian Americans through its handling of credit card applications.
In its investigation, the bureau found that Citi employees were instructed to single out applications that had Armenian last names, but then to conceal the real reason why those applications were denied.
Citigroup discriminated against Armenian Americans, federal regulator says; bank fined $25.9 million | AP News
CFPB officials said the case involves “hundreds of individuals” who were impacted by Citi’s discrimination, which is relatively small for a bank that has tens of millions of customers.
In 2023, for example, Citi violated the Equal Credit Opportunity Act, by discriminating against Armenian American credit card applicants.16 It was fined more than $24 million by the Consumer Financial Protection Bureau (CFPB) and ordered to implement a compliance management system to prevent future violations.17 In 2016, the CFPB also took two actions against Citi, for illegal debt sales and debt collection practices, ordering Citi to pay nearly $5 million in consumer relief and a $3 million penalty.18 It is not clear that a transaction would have any public benefits, while it could lead to an even more unmanageable conglomerate that inflicts consumer harm. Given my concerns, I request that Citi answer the following questions by July 22, 2026.
In 2015, Citi paid almost $750 million for “deceptive and unfair practices” linked to overcharging credit card customers.
The CFPB noted that Citi has a history of recently violating consumer financial protection laws. It paid $335 million in 2018 to 1.75 million consumer credit card holders for allegedly violating the Truth in Lending Act.
Citi targeted Armenian Americans and treated them like criminals, US regulator alleges | CNN Business
This compliance plan required Citi to monitor training materials as well as the written and oral communications of their employees responsible for approving and denying credit card applications.
“On October 16, 2025, the CFPB terminated the consent order, claiming that Citi “has fulfilled certain obligations” laid out in the consent order.
On November 8, 2023, the CFPB issued a consent order finding that Citi discriminated against consumers based on their national origin and therefore violated the Equal Credit Opportunity Act (ECOA), Regulation B, and the Dodd-Frank Wall Street Reform and Consumer Protection Act.
As a result, CFPB issued a judgement against Citi, requiring the bank to pay $1.4 million to the affected consumers and a $24.5 million civil penalty.
On October 16, 2025, the CFPB terminated the consent order, claiming that Citi “has fulfilled certain obligations” laid out in the consent order.
We write in response to the Consumer Financial Protection Bureau’s (CFPB) termination of the consent order holding Citigroup Inc. (Citi) accountable for its alleged discrimination against Armenian Americans through its handling of credit card applications.
April 23, 2026 The Honorable Russell Vought Acting Director Consumer Financial Protection Bureau 1700 G St. NW Washington, DC 20552 Dear Acting Director Vought, We write in response to the Consumer Financial Protection Bureau’s (CFPB) termination of the consent order holding Citigroup Inc. (Citi) accountable for its alleged discrimination against Armenian Americans through its handling of credit card applications.
On October 16, 2025, the CFPB terminated the consent order, claiming that Citi “has fulfilled certain obligations” laid out in the consent order.5 The Bureau claimed these obligations included paying a $24.5 million civil money penalty, making redress payments, and “taking steps to implement injunctive relief to prevent future violations” of the consent order.6 This termination effectively invalidates the consent order, even though CFPB originally intended for it to remain in effect until 2028.7 The CFPB has a statutory obligation to protect consumers and ensure equal access to credit.
Citi employees also referred to applicants as “Armenian bad guys” and the “Southern California Armenian Mafia” and negatively singling out their creditworthiness, behavior which was actively encouraged by supervisors and trainers.2 On November 8, 2023, the CFPB issued a consent order finding that Citi discriminated against consumers based on their national origin and therefore violated the Equal Credit Opportunity Act (ECOA), Regulation B, and the Dodd-Frank Wall Street Reform and Consumer Protection Act.
This compliance plan required Citi to monitor training materials as well as the written and oral communications of their employees responsible for approving and denying credit card applications.
Corporate conductSettlement
Citigroup was fined by the European Commission for participating in a foreign exchange spot trading cartel
Antitrust: Commission fines Barclays, RBS, Citigroup, JPMorgan and MUFG €1.07 billion for participating in foreign exchange spot trading cartel Brussels, 16 May 2019 In two settlement decisions, the European Commission has fined five banks for taking part in two cartels in the Spot Foreign Exchange market for 11 currencies - Euro, British Pound, Japanese Yen, Swiss Franc, US, Canadian, New Zealand and Australian Dollars, and Danish, Swedish and Norwegian crowns.
If proven, such behaviour would be in violation of EU antitrust rules (Articles 101 and 102 of the Treaty on the Functioning of the European Union – TFEU). The 16 CDS bank dealers are: JP Morgan, Bank of America Merrill Lync h, Barclays, BNP Paribas, Citigroup, Commerzbank, Crédit Suisse First Boston, Deutsche Bank, Goldman Sachs, HSBC, Morgan Stanley, Royal Bank of Scotland, UBS, Wells Fargo Bank/Wachovia, Crédit Agricole and Société Générale.
It marks the successful completion of our antitrust investigation in the Yen interest rate derivatives sector – but not the end to our efforts to fight anticompetitive practices in financial markets." The Commission imposed fines totalling € 669 719 000 on the banks UBS, RBS, Deutsche Bank, Citigroup, JPMorgan and on the broker RP Martin in December 2013. These companies had admitted their involvement in one or more cartels in the YIRD sector, which allowed the Commission to settle the case with them. In the YIRD sector, the Commission uncovered seven distinct bilateral infringements lasting between 1 and 10 months in the period 2007 to 2010. The anticompetitive conduct concerned discussions between traders of the participating banks on certain JPY LIBOR submissions. The traders involved also exchanged, on occasions, commercially sensitive information relating either to trading positions or to future JPY LIBOR submissions. ICAP chose not to settle the case.
Antitrust: Commission fines Barclays, RBS, Citigroup, JPMorgan and MUFG €1.07 billion for participating in foreign exchange spot trading cartel Brussels, 16 May 2019 In two settlement decisions, the European Commission has fined five banks for taking part in two cartels in the Spot Foreign Exchange market for 11 currencies - Euro, British Pound, Japanese Yen, Swiss Franc, US, Canadian, New Zealand and Australian Dollars, and Danish, Swedish and Norwegian crowns.
Corporate conductSettlement
Citigroup Inc. settled with the U.S. Trustee Program to protect consumers' personal information in bankruptcy cases
The settlement involving Citigroup Inc. concerns Consumers’ Personal Information.
Trustee Program Announces Successful Conclusion Of Settlement With Citigroup Inc. To Protect Consumers’ Personal Information In Bankruptcy Cases
Corporate conductConfirmed
Citigroup implemented remedial actions for sanctions violations
Citigroup added name variations to its interdiction filter and implemented a programmatic fix after an apparent violation involving Higher Institute of Applied Science and Technology.
OFAC considered the following to be mitigating factors: no Citigroup managers or supervisors were aware of the conduct that led to the apparent violations; U.S. financial institutions blocked the February 9, 2010, January 12, 2011, and October 29, 2012, funds transfers, thereby limiting the economic harm to the sanctions program objectives of the WMDPSR and GTSR with respect to those transactions; Citigroup took remedial action to ensure that specific name variations were added to its interdiction filter, and implemented a programmatic fix in response to the January 12, 2011, apparent violation involving Higher Institute of Applied Science and Technology; Citigroup has not received a penalty notice or Finding of Violation from OFAC in the five years preceding the earliest date of the transactions giving rise to the apparent violations; and Citigroup cooperated with OFAC during the course of these investigations, including by responding thoroughly and promptly to OFAC’s requests for information in relation to all of these matters and by entering into a statute of limitations tolling agreement.
Corporate conductConfirmed
Citi was fined $136 million for compliance failures
Citi fined $136mn for compliance failures in further blow to overhaul.
The bank is also defending against a lawsuit by another managing director, Ardith Lindsey, who sued over a different supervisor’s alleged violent threats and Citigroup’s alleged “pervasive” culture of sexual harassment and gender discrimination.
Citigroup sued by former executive who says it mishandled sexual harassment
Corporate conductSettlement
Citigroup settles FTC charges with $215 million
Citigroup settles FTC charges alleging deception in subprime lending.
I am pleased that Citigroup has agreed to remedy the grave injury caused by The Associates and that Citigroup has announced new measures at CitiFinancial aimed at preventing these kinds of problems.
Citigroup Settles FTC Charges Against the Associates Record-Setting $215 Million for Subprime Lending Victims | Federal Trade Commission
In the largest consumer protection settlement in FTC history, Citigroup Inc. will pay $215 million to resolve Federal Trade Commission charges that Associates First Capital Corporation and Associates Corporation of North America (The Associates) engaged in systematic and widespread deceptive and abusive lending practices.
Corporate conductConfirmed
SEC investigating Citigroup for accounting fraud
The SEC is investigating Citigroup for accounting fraud following disclosures of bogus loans in its Mexican Banamex unit.
SEC investigates Citigroup over fraudulent Mexican loans: source
Securities and Exchange Commission is investigating Citigroup for accounting fraud after it disclosed bogus loans in its Mexican Banamex unit, a source familiar with the investigation said.
Corporate conductConfirmed
British regulators fine Citi $78M for trading breaches
British regulators fined Citi $78 million for high-frequency trading and risk control rule violations.
Citigroup is being probed by US government agencies over its ties to sanctioned Russian billionaire Suleiman Abusaidovich Kerimov, Barron's reported on Thursday, citing a person familiar with the matter.
Citigroup facing US probe over ties to sanctioned Russian billionaire, Bloomberg reports
Corporate conductOfficial statement
Citi was fined more than $24 million by the Consumer Financial Protection Bureau (CFPB)
In 2023, for example, Citi violated the Equal Credit Opportunity Act, by discriminating against Armenian American credit card applicants.16 It was fined more than $24 million by the Consumer Financial Protection Bureau (CFPB) and ordered to implement a compliance management system to prevent future violations.17 In 2016, the CFPB also took two actions against Citi, for illegal debt sales and debt collection practices, ordering Citi to pay nearly $5 million in consumer relief and a $3 million penalty.18 It is not clear that a transaction would have any public benefits, while it could lead to an even more unmanageable conglomerate that inflicts consumer harm.
In 2023, for example, Citi violated the Equal Credit Opportunity Act, by discriminating against Armenian American credit card applicants.16 It was fined more than $24 million by the Consumer Financial Protection Bureau (CFPB) and ordered to implement a compliance management system to prevent future violations.17 In 2016, the CFPB also took two actions against Citi, for illegal debt sales and debt collection practices, ordering Citi to pay nearly $5 million in consumer relief and a $3 million penalty.18 It is not clear that a transaction would have any public benefits, while it could lead to an even more unmanageable conglomerate that inflicts consumer harm.
Corporate conductSettlement
The Commission approved a settled action against Citigroup alleging violations of securities
Under the approved settled action, the statT were authorized to file a civil injunctive action against Citigroup alleging that it violated Section 17(a)(2) of the Securities Act, Section 13(a) of the Exchange Act, and Exchange Act Rules 12b-20 and 13a-ll .
Under the approved settled action, the statT were authorized to file a civil injunctive action against Citigroup alleging that it violated Section 17(a)(2) of the Securities Act, Section 13(a) of the Exchange Act, and Exchange Act Rules 12b-20 and 13a-ll .
In addition, Judge Hu\'elle re<luired the partics to change Citigroup 's Consent and Final Judgment to include language stating that the disgorgcment and penalty funds "will" be distributed to harmed invcstors and that the parties agree to a L-________________________________________________________ ~ . " 34 This docunlenl is s ubj<,cllo Ihe pru\ 'isions of Ihe PI ' i\' ac~' ACI uf 1974, and nlay r<'quil'e redllCliun before disciusul'e 10 Ihi rd plIrlie s..
On that same date, without admitting or denying the allegations in the complaint, Citigroup consented to the entry of a final judgment that (1) permanently enjoined it from violations of Section 17(a)(2) of the Securities Act of 1933, Section 1
The complaint further alleged that the Enforcement staff were "forced to drop the fraud charges that were part of the settlement with the other individual," and that both individuals were also represented by Khuzami's friends and former colleagues, creating the appearance that Khuzami's decision was "made as a special favor to them and perhaps to protect a Wall Street firm for political reasons." The complaint also alleged that Khuzami's decision had the effect of protecting Citigroup from private litigation, and that by not telling the staff about his secret conversation, Khuzami "directly violated recommendations by Inspector General Kotz in previous reports about how such special access and preferential treatment can cause serious appearance problems concerning fairness and integrity of decisions that are made by the Enforcement Division." The OIG investigation found that on July 29,2010, the SEC filed a settled civil action against Citigroup in the U.S. District Court for the District of Columbia.
The SEC's complaint in that action alleged that during the fall of2007, Citigroup made a series of misstatements about its investment bank's exposure to sub-prime mortgages, representing that it had $13 billion in sub-prime exposure when, in fact, it had more than $50 billion.
Defendant shall satisfy this obligation by paying $75,000,001.00 within 14 days after entry of this Final Judgment to the Clerk of this Court, together with a cover letter identifying Citigroup as a defendant in this action; setting forth the title and civil action number of this action and the name of this Court; and specifying that payment is made pursuant to this Final Judgment.
District & Bankruptcy Courts for the District of Columbia Civil Action No. 10-cv-1277-ESH FINAL JUDGMENT AS TO DEFENDANT CITIGROUP INC. The Securities and Exchange Commission having filed a Complaint and Defendant Citigroup Inc. ("Defendant") having entered a general appearance; consented to the Court's jurisdiction over Defendant and the subject matter of this action; consented to entry of this Final Judgment as to Defendant Citigroup Inc. ("Final Judgment") without admitting or denying the allegations of the Complaint (except as to jurisdiction); waived findings of fact and conclusions of law; and waived any right to appeal from this Final Judgment: I.
("Defend?-nt") having entered a general ) appearance; consented to the Court's jurisdiction over Defendant and the subject matter of this action; consented to entry of this Final Judgment as to Defendant Citigroup Global Markets Inc. ("Final Judgment") without admittin~ or denying the allegations of the Complaint (except as to jurisdiction); waived findillgs of fact and conclusions of law; and waived any right to appeal from this Final Judgment: I. IT IS HEREBY ORDERED, ADJUDGED 1 AND DECREED that Defendant and Defendant's agents, servants, employees, attorneys:, and all persons in active concert or participation with them who receive actual notice 6f this Final Judgment by personal service or otherwise are permanently restrained and enjoined from violating Sections i l 7(a)(2) and (3) of the Securities Act of 1933 ("Socurities Act") [15 U.S.C.
("Defend?-nt") having entered a general ) appearance; consented to the Court's jurisdiction over Defendant and the subject matter of this action; consented to entry of this Final Judgment as to Defendant Citigroup Global Markets Inc. ("Final Judgment") without admittin~ or denying the allegations of the Complaint (except as to jurisdiction); waived findillgs of fact and conclusions of law; and waived any right to appeal from this Final Judgment: I.
Throughout that time period, Citigroup represented that its sub-prime exposure in Citigroup's investment banking unit, Citi Markets & Banking, was $13 billion or less, when in fact, at all times during that period, the investment bank's sub-prime exposure was over $50 billion.
The Securities and Exchange Commission today charged Citigroup Inc. with misleading investors about the extent of the company's exposure to sub-prime mortgage-related assets during 2007.
Separately, the SEC also instituted settled cease-and-desist proceedings against Gary Crittenden, Citigroup's former chief financial officer, and Arthur Tildesley, Jr., Citigroup's former head of Investor Relations, for their roles in causing Citigroup to make certain of the misleading statements.
The SEC alleges in its complaint against Citigroup that between July 20, 2007 and November 4, 2007, in response to intense investor interest in the topic, Citigroup repeatedly made misleading statements about the extent of its holdings of assets backed by sub-prime mortgages in earnings calls and public filings.
Without admitting or denying the SEC's allegations, Citigroup Inc. consented to the entry of a final judgment that (1) permanently restrains and enjoins it from violation of Section 17(a)(2) of the Securities Act of 1933, Section 13(a) of the Securities Exchange Act of 1934, and Exchange Act Rules 12b-20 and 13a-11 and (2) orders it pay penalty and disgorgement of $75,000,001.
The SEC's complaint in that action alleged that during the fall of2007, Citigroup made a series of misstatements about its investment bank's exposure to sub-prime mortgages, representing that it had $13 billion in sub-prime exposure when, in fact, it had more than $50 billion.
The complaint further alleged that the Enforcement staff were "forced to drop the fraud charges that were part of the settlement with the other individual," and that both individuals were also represented by Khuzami's friends and former colleagues, creating the appearance that Khuzami's decision was "made as a special favor to them and perhaps to protect a Wall Street firm for political reasons." The complaint also alleged that Khuzami's decision had the effect of protecting Citigroup from private litigation, and that by not telling the staff about his secret conversation, Khuzami "directly violated recommendations by Inspector General Kotz in previous reports about how such special access and preferential treatment can cause serious appearance problems concerning fairness and integrity of decisions that are made by the Enforcement Division." The OIG investigation found that on July 29,2010, the SEC filed a settled civil action against Citigroup in the U.S. District Court for the District of Columbia.
Under the approved settled action, the statT were authorized to file a civil injunctive action against Citigroup alleging that it violated Section 17(a)(2) of the Securities Act, Section 13(a) of the Exchange Act, and Exchange Act Rules 12b-20 and 13a-ll .
On that same date, without admitting or denying the allegations in the complaint, Citigroup consented to the entry of a final judgment that (1) permanently enjoined it from violations of Section 17(a)(2) of the Securities Act of 1933, Section 1
In addition, Judge Hu\'elle re<luired the partics to change Citigroup 's Consent and Final Judgment to include language stating that the disgorgcment and penalty funds "will" be distributed to harmed invcstors and that the parties agree to a L-________________________________________________________ ~ . " 34 This docunlenl is s ubj<,cllo Ihe pru\ 'isions of Ihe PI ' i\' ac~' ACI uf 1974, and nlay r<'quil'e redllCliun before disciusul'e 10 Ihi rd plIrlie s..
The Securities and Exchange Commission (“Commission”) deems it appropriate that cease- and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the Securities Exchange Act of 1934 (“Exchange Act”), against Citigroup Inc. (“Respondent”). II. In anticipation of the institution of these proceedings, Respondent has submitted an Offer of Settlement (the “Offer”) which the Commission has determined to accept.
Under the approved settled action, the statT were authorized to file a civil injunctive action against Citigroup alleging that it violated Section 17(a)(2) of the Securities Act, Section 13(a) of the Exchange Act, and Exchange Act Rules 12b-20 and 13a-ll .
In addition, Judge Hu\'elle re<luired the partics to change Citigroup 's Consent and Final Judgment to include language stating that the disgorgcment and penalty funds "will" be distributed to harmed invcstors and that the parties agree to a L-________________________________________________________ ~ . " 34 This docunlenl is s ubj<,cllo Ihe pru\ 'isions of Ihe PI ' i\' ac~' ACI uf 1974, and nlay r<'quil'e redllCliun before disciusul'e 10 Ihi rd plIrlie s..
On that same date, without admitting or denying the allegations in the complaint, Citigroup consented to the entry of a final judgment that (1) permanently enjoined it from violations of Section 17(a)(2) of the Securities Act of 1933, Section 1
The SEC's complaint in that action alleged that during the fall of2007, Citigroup made a series of misstatements about its investment bank's exposure to sub-prime mortgages, representing that it had $13 billion in sub-prime exposure when, in fact, it had more than $50 billion.
The complaint further alleged that the Enforcement staff were "forced to drop the fraud charges that were part of the settlement with the other individual," and that both individuals were also represented by Khuzami's friends and former colleagues, creating the appearance that Khuzami's decision was "made as a special favor to them and perhaps to protect a Wall Street firm for political reasons." The complaint also alleged that Khuzami's decision had the effect of protecting Citigroup from private litigation, and that by not telling the staff about his secret conversation, Khuzami "directly violated recommendations by Inspector General Kotz in previous reports about how such special access and preferential treatment can cause serious appearance problems concerning fairness and integrity of decisions that are made by the Enforcement Division." The OIG investigation found that on July 29,2010, the SEC filed a settled civil action against Citigroup in the U.S. District Court for the District of Columbia.
Corporate conductSettlement
Citigroup settles over research analyst conflicts
The SEC settled charges against Citigroup Global Markets Inc. for research analyst conflicts of interest.
The Securities and Exchange Commission announced today that it has settled charges against Citigroup Global Markets Inc., formerly known as Salomon Smith Barney Inc. ("SSB"), a New York-based brokerage firm and investment bank, arising from an investigation of research analyst conflicts of interest.
The Securities and Exchange Commission (“Commission”) deems it appropriate and in the public interest that public administrative and cease-and-desist proceedings be, and hereby are, instituted pursuant to Sections 15(b) and 21C of the Securities Exchange Act of 1934 (“Exchange Act”) against Citigroup Global Markets Inc. (“Respondent” or “CGMI”). II. In anticipation of the institution of these proceedings, Respondent has submitted an Offer of Settlement (“Offer”) that the Commission has determined to accept.
Corporate conductRuling
A court denied Citi's motion to dismiss a lawsuit alleging it failed to protect customers from fraud
NEW YORK – New York Attorney General Letitia James today announced a significant victory in her case against Citibank (Citi) after a judge denied Citi’s motion to dismiss the Office of the Attorney General’s (OAG) lawsuit on its core claims that Citi failed to protect and reimburse victims of fraud.
NEW YORK – New York Attorney General Letitia James today announced a significant victory in her case against Citibank (Citi) after a judge denied Citi’s motion to dismiss the Office of the Attorney General’s (OAG) lawsuit on its core claims that Citi failed to protect and reimburse victims of fraud.
The decision by Judge Paul Oetken of the United States District Court for the Southern District of New York, which held that Citi misapplied the law when denying consumers’ claims for reimbursement, means that Attorney General James’ lawsuit against Citi will continue.
Attorney General James is seeking to stop Citi’s deceptive practices and to collect restitution for victims who were denied reimbursement in the last six years, as well as penalties and disgorgement.
"Banks are supposed to be the safest place to keep money, yet Citi's negligence has allowed scammers to steal millions of dollars from hardworking people," James said in a statement.
District Judge Paul Oetken ruled that Citigroup must face the claims under the Electronic Fund Transfer Act (EFTA), it is a law aimed to give consumer protection from fraud involving electronic transactions.
Citigroup Faces Lawsuit Over Alleged Failure to Protect Customers from Online Scams
“Banks are supposed to be the safest place to keep money, yet Citi’s negligence has allowed scammers to steal millions of dollars from hardworking people,” James said in a statement.
Citi, represented by Sullivan & Cromwell, had sought circuit intervention on the heels of a district court order keeping alive a lawsuit seeking to force the banking giant to pay millions of dollars to New Yorkers who have fallen victim to online scams.