Courtesy of Pam Martens
Michael Corbat, CEO of Citigroup Since 2012
So far this year, the mega Wall Street bank, Citigroup, has lost 37 percent of its market value – outpacing peer banks like Morgan Stanley, Goldman Sachs, JPMorgan Chase and Bank of America. (See chart below.)
Then there was the fat finger in August in the back office of Citigroup that wired $900 million by mistake to pay off the entire principal balance of a Revlon bond instead of making just the payment of interest on the bond. Citigroup is now embroiled in lawsuits with the Revlon lenders, attempting to get them to return the money. According to Institutional Investor, “a total of $526.4 million has yet to be returned” as of August 27. The lenders are refusing to return the funds to Citigroup on the basis that Revlon owed them the money anyway because Revlon had improperly changed the terms of the loan.
Mistakenly wiring almost $1 billion on behalf of Revlon out of the bank’s own coffers is not something that federal regulators want to hear about from a federally-insured bank that sits on $1.2 trillion in customers’ deposits and a bank that received the largest bailout in U.S. history from 2007 to 2010. Citigroup also has a serial recidivist reputation for engaging in wrongdoing.
As the bank’s share price was tanking, in June Bloomberg News dropped the bombshell that Citigroup had “returned almost twice as much money to its stockholders as it earned” over the prior three years, as a result of it buying back its own shares (which prop up its share price) and paying out common and preferred dividends.
In April, Wall Street On Parade reported this:
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