Entries in Citigroup (18)


Citigroup's $285M Settlement with SEC Rejected

Nicholas Roberts/Bloomberg News(NEW YORK) -- A federal judge in New York has struck down a settlement agreement between one of the nation's biggest banks and government regulators.  

Under a deal reached with the Securities and Exchange Commission, Citigroup would pay $285 million to settle claims it misled customers about an investment tied to mortgages.

Judge Jed Rakoff was upset that the deal did not require Citigroup to admit that it did anything wrong. He said the settlement "is neither fair, nor reasonable, nor adequate, nor in the public interest." Rakoff said the deal may be good for Citigroup, but gives nothing to the government other than a quick headline and leaves defrauded investors "substantially short-changed."

Copyright 2011 ABC News Radio


Citigroup and Wells Fargo Report Strong Profits

Chris Goodney/Scott Eells/Bloomberg via Getty Images(NEW YORK) -- As the Occupy Wall Street protests approach its one-month anniversary, third-quarter earnings season continued with Citigroup and Wells Fargo reporting strong profits.

It is unclear how the Volcker rule, which proposes to ban banks with insured deposits from "high-risk," short-term trading with its own funds, will affect banks' financial results.

David Hilder, analyst with Susquehanna International Group, said Goldman Sachs and Morgan Stanley may exit the banking business if compliance regulations of the Volcker rule are implemented. The rule is expected to be implemented next year.

Hilder said those two banks are less dependent on deposits as a source of funding than other banks.

"Once the Volcker Rule implementation regulations are final, we would expect both [Goldman Sachs and Morgan Stanley] to examine the feasibility, as well as benefits and costs, of exiting the banking system," he wrote in a research note. "We would also expect to see more capital attracted to market-makers who are already outside the banking system."

Investment banking client activity may have slowed due to uncertainty in the global economy, especially in Europe, which has led to lower profit expectations for banks more heavily invested in the capital markets. Some analysts expect Goldman Sachs to report its first loss. If the forecast is accurate, it would be Goldman Sachs' second quarterly loss since its initial public offering in 1999.

S&P Capital IQ provided sales data as of June 30 for some of the major banks that will report third-quarter earnings this month.

Copyright 2011 ABC News Radio


Bank Fraud Charges Brought Against Ex-Citigroup VP YORK) -- A former Citigroup vice president is facing bank fraud charges for allegedly embezzling over $19 million.
Gary Foster, who formerly worked as a vice president in Citigroup’s treasury department, was arrested on Sunday at New York’s John F. Kennedy International Airport, where he had just arrived on a flight from Bangkok, Thailand.
According to the criminal complaint, Foster, 35, transferred money from various Citigroup accounts to Citigroup’s cash account and then to his personal account at a different bank. The former vice president is accused of using a fraudulent contract or deal number in the wire transfer process to make it look as if the money was being transferred in support of an existing contract.
“The defendant allegedly used his knowledge of bank operations to commit the ultimate inside job,” United States Attorney Loretta Lynch said in a statement. “We are committed to ensuring the integrity of the banking system and to prosecuting those who would undermine it for their personal gain.”
Foster is accused of moving the money from Citigroup’s accounts to his personal account between July 2010 and December 2010.
Foster faces up to 30 years in prison if convicted.
Copyright 2011 ABC News Radio


Citigroup Hack Job Worse than Originally Reported

Jupiterimages/Thinkstock(NEW YORK) -- Hackers who cracked into Citigroup's credit card records last month did more damage than the bank initially reported.

The company announced late Wednesday that more than 360,000 credit card accounts were impacted when hackers broke into its database -- nearly double the number first believed. Citigroup, however, says that many of those accounts had already been closed or had their cards replaced for other reasons.

"The customers' account information (such as name, account number and contact information, including email address) was viewed," the company said in a press release. But what was not compromised were social security numbers, birth dates, credit card expiration dates, and card security codes -- "data that is critical to commit fraud," Citigroup said.

Only slightly more than 217,000 accounts were reissued cards because of the breech.

Copyright 2011 ABC News Radio


Citi Says Hacker Accessed Info of 200,000 Cardholders

Justin Sullivan/Getty Images(NEW YORK) -- Citigroup Inc. announced Thursday that computer hackers got access to the bank's online account.

The breach provided hackers with access to data of about 200,000 bank cardholders in North America.

Names, account numbers, and contact information, such as phone numbers, were accessed. However, customer's social security number, date of birth, card expiration date ,and card security code (CVV) were not compromised, according to Citi.

Citi says it is contacting customers who were impacted.

"Citi has implemented enhanced procedures to prevent a recurrence of this type of event," reads a statement from the company. "For the security of these customers, we are not disclosing further details."

The breaching of Citi's account information serves as one more occurrence in a string of cyber attacks on high profile companies, such as Google and Sony.

Copyright 2011 ABC News Radio


Hackers Expose Millions of Email Addresses

Tasos Katopodis/Getty Images(DALLAS) -- If you're a customer of Walmart, Best Buy, Citigroup or one of several other major U.S. companies, you might want to put your email inbox on high alert.

Over the weekend, those retailers were the latest on a growing list of big-name businesses to warn customers that computer hackers may have accessed their email addresses and names. All of the companies work with the Dallas-based online marketing firm Epsilon, which said Friday its system had been breached, potentially exposing its corporate clients' customer information.

When reached by ABC News, a spokeswoman said she was unable to comment as the company conducts an investigation and cooperates with authorities. But in its statement, Epsilon, which sends 40 billion emails annually on behalf of more than 2,500 clients, said a subset of its' clients customer information was compromised in the data breach.

"The information that was obtained was limited to email addresses and/or customer names only," the company said. "A rigorous assessment determined that no other personal identifiable information associated with those names was at risk."

J.P. Morgan, Kroger's, Walgreens, Capital One Financial, Barclay's Bank, The College Board and TiVo are among the companies to acknowledge that their customers' data may have been accessed by hackers.

While security experts say hackers are usually interested in more sensitive data than people's names and email addresses, they still warn that affected customers should be extra careful with their email. Customers with compromised email accounts could expect a surge in annoying spam to their inbox, he said, but the hack could have more insidious effects, too.

"The biggest danger here really is that spammers could then target you with email pretending to come from these organizations," Cluley said. "You might get fooled into being phished for your log-in information or being sent malware or a dangerous Web link."

Copyright 2011 ABC News Radio


Citigroup CEO Gets $1.75 Million Salary Raise

Photo Courtesy - Mario Tama/Getty Images(NEW YORK) -- Citigroup Inc. CEO Vikram Pandit will get an enormous salary increase after the company reported a $10.6 billion profit in 2010.

Pandit announced in Feb. 2009 that he would only receive $1 a year until the firm's profit margin was once again favorable. Citigroup shares jumped 43 percent in 2010, following tremendous losses during the worst of the recession in 2008 and 2009. The 54-year-old's base salary is now $1.75 million.

Pandit's pay raise follows similar increases for chief executives at Morgan Stanley and JPMorgan Chase & Co.

Copyright 2011 ABC News Radio


Citigroup Claims No 'Robo-Signings' Despite Using Foreclosure King

Photo Courtesy - ABC News(NEW YORK) -- Despite doing business with a controversial Florida law firm accused of using "robo-signers" to rubber-stamp thousands of mortgage documents, Citigroup claims it never employed such practices in the rush to foreclose on homes.

"We have not found evidence of robo-signing," John Gerspach, Citi's finance chief, told reporters this week.  "We are fairly confident we have not relied on robo-signers."

But former Labor Secretary Robert Reich, a professor of public policy at University of California at Berkeley, doubted that Citigroup and other banks did not take shortcuts when confronted with the rising foreclosure tide.

"Citi was competing with every other mortgage lender," Reich said.  "Money was cheap. Lenders were lending it out to almost anybody who could stand up straight and doing it in an extraordinarily rapid and careless way.  I would be very surprised if Citi's practices were substantially different from everyone else's."

On a call with reporters, CFO Gerspach said: "Regarding foreclosures, as we have been saying publicly, we continuously view our document handling procedures and we believe the integrity of Citi's foreclosure process is sound.  While we use external attorneys to prepare documents, each package is reviewed by a Citi employee who verifies the information and signs the foreclosure affidavit in the presence of a notary.  When errors are found, the documents are returned to the attorney who revises the package and resubmits the documents for review."

"We have intensified our ongoing process reviews and...have not identified any systemic issues," he added.

Copyright 2010 ABC News Radio

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