New Citigroup Looks Too Much Like the Old One
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Bloomberg) Two years ago, Citigroup Inc. (C) embarked on one of those feel-good corporate-image campaigns, aimed at showing a skeptical public that it could be trusted again. Citigroup was a fundamentally different company from what it had been during the financial crisis, it promised, a mantra its executives have repeated ever since.
The new Citi has a clear strategy, Chief Executive Officer Vikram Pandit said in a February 2010 video on the companys website. Were going to stand for the financial- services company that practices responsible finance. Making sure were transparent. Making sure were honest.
Oh, well. Last week, Citigroup agreed to pay $158.3 million to settle a civil complaint by the U.S. Attorneys Office in Manhattan, accusing the company and its CitiMortgage home-loan unit of defrauding the U.S. Department of Housing and Urban Development. By itself, that wouldnt be big news. The payment is small for a company with $1.9 trillion of assets. And the government has accused Citigroup of fraud many times before.
What makes this case different -- and so galling -- is that some of the alleged misconduct was ongoing as recently as last year, well after the companys 2008 taxpayer bailouts. All this might have stayed under wraps, too, were it not for a CitiMortgage employee, Sherry Hunt, who filed a federal whistle- blower complaint against the company last year. Hunt was awarded $31.7 million, or 20 percent of the settlement proceeds agreed to last week, after the government intervened in her lawsuit and resolved the case. ..................(more)
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http://www.bloomberg.com/news/2012-02-24/new-citigroup-looks-too-much-like-the-old-one-commentary-by-jonathan-weil.html