Citi: How Low Can You Go ?

Citigroup CEO Chuck Prince (aka The Prince of Darkness) must love the latest scandal to have rocked his company And Jesus, is this one tacky or what? .

It appears that over 100 of Citigroup's brokers in the US improperly obtained waivers of mutual funds sales fees for clients - by claiming that they were disabled!

Some US mutual funds allow clients to sell stock for free in certain circumstances, usually death or if they have a disability. Well, it appears that, between 2001 and 2002, the brokers thought it a great ruse to classify hundreds of clients as disabled to avoid them paying fees. A total of 2,419 transactions, totalling $47m, were apparently uncovered. Some clients the brokers claimed were disabled were actually hedge funds! One broker is said to have entered claims for 80% of his clients!!

US regulator NASD has fined Citigroup $400,000 for supervisory and record-keeping violations, and the company has been ordered to pay $715,000 in restitution to the mutual funds firms affected. James Shorris, NASD's head of enforcement, said in a statement that 'Citigroup effectively failed to address a known problem. Its representatives were able to improperly exploit the mutual funds' fee-waiver provisions that were specifically reserved for disabled individuals'.

Citigroup agreed to settle without admitting or denying liability. Naturally, no one did nothin’ to no one. And nobody knows nothin’. We don’t want to get all moralistic or anything, but you have to wonder what leadership is worth when a company like Citi is afraid to stand up and accept responsibility. Not much.

http://news.hereisthecity.com/news/business_news/5845.cntns