More Citigroup
"Name nearly any scandal, incompetence or hiccup suffered by the financial industry in the past decade or so, and the chances are Citigroup will have been at its forefront." –Wall Street Journal, August 12, 2008
If you are looking for an example of corporate leadership NOT to emulate, you need look no further than Citigroup's senior management team. The leaders of this financial giant seem intent on squandering the trust of employees and customers alike. Consider these latest lawsuit settlements:
Last week, Citigroup subsidiary Smith Barney paid $33 million to settle a gender bias lawsuit covering more than 2,400 female brokers. Plaintiffs accused the company's leaders of favoring male brokers in new client assignments, which in turn prevented female brokers from competing fairly for pay and promotions. The settlement calls for Citigroup to alter the way it assigns new clients to brokers and to send its managers to diversity training every other year. Don't expect the company's leaders to learn from this mistake, however; Citigroup settled a similar suit by female brokers in 1997.
Two weeks ago, Citigroup agreed to buy back $7.5 billion in auction-rate securities from individual investors and pay $100 million in fines to settle state and federal claims that the company falsely sold the risky securities as safe, money market-type investments. In addition, Citigroup must begin "restoring liquidity" to institutions holding about $12 billion of the instruments when the auction-rate securities market collapsed earlier this year.
On its Web site, the company says, "Citi aspires to the highest standards of ethical conduct" and claims to be a place "where opportunities to develop are widely available to all -- regardless of differences." But as these cases reveal, Citigroup's corporate culture has failed to evolve from a male-dominated, anything-to-make-a-buck environment despite a barrage of legal challenges in recent years. As a result, Citigroup's leadership continues to pay out billions of dollars in settlements while ignoring the ethical lessons imparted by angry employees and regulators.
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If you are looking for an example of corporate leadership NOT to emulate, you need look no further than Citigroup's senior management team. The leaders of this financial giant seem intent on squandering the trust of employees and customers alike. Consider these latest lawsuit settlements:
Last week, Citigroup subsidiary Smith Barney paid $33 million to settle a gender bias lawsuit covering more than 2,400 female brokers. Plaintiffs accused the company's leaders of favoring male brokers in new client assignments, which in turn prevented female brokers from competing fairly for pay and promotions. The settlement calls for Citigroup to alter the way it assigns new clients to brokers and to send its managers to diversity training every other year. Don't expect the company's leaders to learn from this mistake, however; Citigroup settled a similar suit by female brokers in 1997.
Two weeks ago, Citigroup agreed to buy back $7.5 billion in auction-rate securities from individual investors and pay $100 million in fines to settle state and federal claims that the company falsely sold the risky securities as safe, money market-type investments. In addition, Citigroup must begin "restoring liquidity" to institutions holding about $12 billion of the instruments when the auction-rate securities market collapsed earlier this year.
On its Web site, the company says, "Citi aspires to the highest standards of ethical conduct" and claims to be a place "where opportunities to develop are widely available to all -- regardless of differences." But as these cases reveal, Citigroup's corporate culture has failed to evolve from a male-dominated, anything-to-make-a-buck environment despite a barrage of legal challenges in recent years. As a result, Citigroup's leadership continues to pay out billions of dollars in settlements while ignoring the ethical lessons imparted by angry employees and regulators.
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Author George Brymer's comments about the leaders who get it, and those who never will.
