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Citigroup was fined $400 million

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Miguel A. Rodriguez
Miguel A. Rodriguez
08 October 2020
Risk management deficiencies seem to be a recurring problem for Citigroup

After at the end of September, the international banking sector was shaken by a $2 trillion illicit money transactions scandal, now, Citigroup – a major American bank – got fined by the Federal banking regulators.  

The Federal Reserve and the Office of the Comptroller of the Currency (#OCC) announced that they would fine Citigroup $400 million for risk management deficiencies and data governance and internal controls across the company. The two institutions cited "serious and longstanding deficiencies and unsafe or unsound practices."

According to the Federal Reserve Board's notes, the fine comes after Citigroup failed to address the concerns related to risk management and internal controls that have been identified in 2013 and 2015.

Citi's board must now submit a plan to explain how to supervise the necessary improvements and how the senior management will implement the changes alongside a dedicated team. Per the order, the #bank must improve its compliance #risk #management program and quality management practices. 

Citi wasn't late to address the situation and stated that it is "fully committed" to make the changes. It plans to invest over $1 billion in its efforts to comply with the regulators' requirements.

It is not the first time when Citigroup gets a fine for unfair practices. The US Commodity Futures Trading Commission fined the bank with $4.5 million for deleting 2.77 million audio files that have been subpoenaed as evidence, which Citi promised to preserve.  

Despite the news, Citigroup's stock price closed 0.97% higher. 

Read here about the $2 trillion scandal!

Sources: edition.cnn.com, reuters.com, finance.yahoo.com


This information/research prepared by Miguel A. Rodriguez does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. The research analyst primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views and consequently any person acting on it does so entirely at their own risk.The research provided does not constitute the views of KW Investments Ltd nor is it an invitation to invest with KW Investments Ltd. The research analyst also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report.The research analyst in not employed by KW Investments Ltd. You are encouraged to seek advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit that conforms to your specific investment objectives, financial situation, or particular financial needs before making a commitment to invest. The laws of the Republic of Seychelles shall govern any claim relating to or arising from the contents of the information/ research provided. 

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Miguel A. Rodriguez
Miguel A. Rodriguez
Financial Writer

Miguel worked for major financial institutions such as Banco Santander, and Banco Central-Hispano. He is a published author of currency trading books.