CITIGROUP is lucky that Muammar el-Qaddafi was killed when he was. The Libyan leader’s death diverted attention from a lethal article involving Citigroup that deserved more attention because it helps to explain why many average Americans have expressed support for the Occupy Wall Street movement. The news was that Citigroup had to pay a $285 million fine to settle a case in which, with one hand, Citibank sold a package of toxic mortgage-backed securities to unsuspecting customers — securities that it knew were likely to go bust — and, with the other hand, shorted the same securities — that is, bet millions of dollars that they would go bust.

It doesn’t get any more immoral than this. As the Securities and Exchange Commission civil complaint noted, in 2007, Citigroup exercised “significant influence” over choosing $500 million of the $1 billion worth of assets in the deal, and the global bank deliberately chose collateralized debt obligations, or C.D.O.’s, built from mortgage loans almost sure to fail. According to The Wall Street Journal, the S.E.C. complaint quoted one unnamed C.D.O. trader outside Citigroup as describing the portfolio as resembling something your dog leaves on your neighbor’s lawn. “The deal became largely worthless within months of its creation,” The Journal added. “As a result, about 15 hedge funds, investment managers and other firms that invested in the deal lost hundreds of millions of dollars, while Citigroup made $160 million in fees and trading profits.”

I think what we should probably do is go and split up investment banking from (consumer) banking. Have banks be deposit-takers; have banks make commercial loans and real estate loans; and have banks do something that’s not gonna risk the taxpayer dollars, that’s not gonna be too big to fail.

Former Citigroup chairman and CEO SANFORD WEILL, appearing on CNBC to suggest that banks should separate their investment and consumer businesses altogether to help prevent a repeat of Wall Street’s financial collapse.

Everyone’s surprised, since Weill and his ilk gave us “too big to fail” in the first place.  And, as Jon Stewart pointed out on tonight’s Daily Show, it started with the repeal of the Glass-Steagall Act — which mandated separation of commercial and investment banks — in 1999… a repeal Weill pushed for.


The Significance of Citigroup's Shareholder Revolt

The shareholders of Wall Street giant Citigroup are out to prove that corporate democracy isn’t an oxymoron. They’ve said no to the exorbitant $15 million pay package of Citi’s CEO Vikram Pandit, as well as to the giant pay packages of Citi’s four other top executives.

The vote, at Citigroup’s annual meeting in Dallas Tuesday, isn’t binding on Citigroup. But it’s a warning shot across the bow of every corporate boardroom in America.

Shareholders aren’t happy about executive pay.

And why should they be? CEO pay at large publicly-held corporations is now typically 300 times the pay of the average American worker. It was 40 times average worker pay in the 1960s and has steadily crept upward since then as corporations have morphed into “winner-take-all” contraptions that reward their top executives with boundless beneficence and perks while slicing the jobs, wages, and benefits of almost everyone else.

Meanwhile, too many of these same corporations have failed to deliver for their shareholders. Citigroup, for example, has had the worst stock performance among all large banks for the last decade but ranked among the highest in executive pay. 

The real news here is new-found activism among institutional investors – especially the managers of pension funds and mutual funds. They’re the ones who fired the warning shot Tuesday.

Institutional investors are catching on to a truth they should have understood years ago: When executive pay goes through the roof, there’s less money left for everyone else who owns shares of the company.

For too long, most fund managers played the game passively and obediently. Some have been too cozy with top corporate management, forgetting their fiduciary duty to their own investors. How else do you explain the abject failure of fund managers to police Wall Street as it careened toward the abyss in 2008? Or to adequately oversee executives, such as the Enron criminals, who were looting their companies in the years before 2002?

The new Dodd-Frank law, much of which is being eviscerated by Wall Street’s lawyers and lobbyists, at least requires that public companies give shareholders a say on pay. As a practical matter, this gives institutional investors the chance to speak clearly and openly about the scandal of unbridled executive compensation. 

Two key questions for the future: Will institutional investors keep the pressure on? And will CEOs and boards of directors get the message? 

#245_10th_Avenue #Address #Multifamily #Building_Buddy @BLDGBUDDY #Architect #Della_Valle_Bernheimer #Built #2009 #40760_sf #20_Units #11_Stories #Developer #Grasso_Holdings #Owner #Aristone_Realty_Capital ; This #High_Line #condominium residence nearly suffered the fate of One Madison Park before its new owner swept in purchased the #construction_debt from #Citigroup and finished the building. Now you can own one of these for a cool 1700 PSF. (Taken with Instagram at 245 10th Avenue)

The U.S. House just passed a bill called H.R. 992 - the Swaps Regulatory Improvement Act - that was literally written by mega-bank lobbyists. It repeals the laws passed in 2010 to prevent another meltdown like the one that crashed our economy in 2008. The repeal was co-sponsored by a former Goldman Sachs executive and passed with bipartisan support from some of the House’s largest recipients of Wall Street cash. It’s so appalling… so unbelievable… so blatantly corrupt… that you’ve got to see it to believe it:

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Don’t mess with the Libor, kids.

As part of its probe-happy new attitude, the SEC is investigating three banks for manipulating rates in order to mask their borrowing in the buildup to the financial crisis. The probe has been underway for at least a year, with twenty banks under investigation. But sources tell The Wall Street Journal that the focus is on Bank of America, Citigroup, and UBS.

Citigroup shutting down prop trading unit -CFO

Banks including Goldman Sachs and Morgan Stanley have already unwound similar businesses in preparation for stricter government regulation under the Volcker Rule.The Volcker Rule, which goes into effect next year, is aiming to prevent banks from making risky trades by prohibiting short-term trading for their own profit.Citi spokeswoman Danielle Romero-Apsilos said Citi’s Equity Principal Strategies unit, is a “de minimis part of Citi’s overall trading operation.”“As it does not fit with Citi’s business model under the impending Volcker rule, it is in the process of being wound down,” Romero-Apsilos said in an emailed statement.

Obama Accepts Republican Nomination

In a surprising twist of events, Senator Barack Obama accepted the GOP’s nomination for the President of the United States late this evening. After an arduous primary battle with Senator Hillary Clinton and losing the Pennsylvania primary on Tuesday, Senator Obama was facing possible defeat. On Wednesday morning, however, Obama received a call from RNC Chair Elec Tionrigger.

When asked why the GOP would shun their nominee, Senator John McCain, and back a Democrat, Republican National Committee spokesman Rich McRacists said, “While studying his run for his party’s nomination, we at the RNC realized he was “our kind of guy”. The spokesman went on to say traits Obama showed during his campaign, for instance beating up on the underdog, keeping women down, shoveling out money to beat the competition, and calling for a consensus outside the rules of the election, aligns him more with Republicans than Democrats. Furthermore, the RNC claims that Senator Obama’s most recent loss shows that he is out of touch with blue collar workers, something also inherently Republican.

The RNC claims that Senator Obama’s negative views on NAFTA are based on an irrational fear and hatred of Mexicans, which is something he and President Bush can both agree upon. When asked if his views on big business gel with those of the Republican party, McRacist noted that Goldman Sachs gave his campaign over a half million dollars, and other notable firms like JPMorgan Chase & Co, Lehman Brothers, Citigroup, Google, Time Warner, and Morgan Stanley round out the top of his campaign contribution list.

Finally, McRacist added, the dangling preposition in Obama’s campaign slogan, “Change We Can Believe In”, shows the same grammatical styling of some of the Republican’s most notable orators such as President George W. Bush and former Vice President James Danforth Quayle.

A federal judge in New York on Monday threw out a settlement between the Securities and Exchange Commission and Citigroup over a 2007 mortgage derivatives deal, saying that the S.E.C.’s policy of settling cases by allowing a company to neither admit nor deny the agency’s allegations did not satisfy the law.

The judge, Jed S. Rakoff of United States District Court in Manhattan, ruled that the S.E.C.’s $285 million settlement, announced last month, is “neither fair, nor reasonable, nor adequate, nor in the public interest” because it does not provide the court with evidence on which to judge the settlement.

The ruling could throw the S.E.C.’s enforcement efforts into chaos, because a majority of the fraud cases and other actions that the agency brings against Wall Street firms are settled out of court, most often with a condition that the defendant does not admit that it violated the law while also promising not to deny it.

That condition gives a company or individual an advantage in subsequent civil litigation for damages, because cases in which no facts are established cannot be used in evidence in other cases, like shareholder lawsuits seeking recovery of losses or damages.

The S.E.C.’s policy — “hallowed by history, but not by reason,” Judge Rakoff wrote — creates substantial potential for abuse, the judge said, because “it asks the court to employ its power and assert its authority when it does not know the facts.”

The S.E.C. did not respond immediately to a request for comment on the judge’s decision, which was released Monday morning. A Citigroup spokesman said the company was studying the decision and had no immediate comment.


The New York Times, “Judge Blocks Citigroup Settlement With S.E.C.”

"…the S.E.C.’s policy of settling cases by allowing a company to neither admit nor deny the agency’s allegations did not satisfy the law."

Fucking A.

Watch on

Erica Joy originally shared this post: Time to close those Citibank accounts. #occupywallstreet


For those who can’t view the video, a group of 30 people are locked inside a Citi Bank, detained against their will. According the video and reports, these people were attempting to close their accounts as a form of protest.

Near the end of the video, a lady standing outside the bank is asked if she was inside. She says yes, I’m a customer. Holds up her banking info (presumably, I can’t read the paper and the cops didn’t bother to either). She is immediately detained by a guy in plain clothes and other cops come and surround her and drag her away as she repeats “I’m a customer!”

(h/t +Eric Rice) #OWS #OCT15 CITI BANK ARRESTS