According to an amended lawsuit filed late Thursday, a former Citigroup managing director claims she was fired for refusing to mislead federal regulators about the bank's risk management. She accuses Citigroup's Chief Operating Officer of deliberate deception.
Kathleen Martin stated that Chief Operating Officer Anand Selva "wanted to misreport Citigroup’s metrics to deceive the Office of the Comptroller of the Currency" into believing that the bank had resolved its risk management deficiencies as part of a $400 million settlement in 2020.
In the amended complaint filed in Manhattan federal court, Martin reiterated that Selva was concerned that reporting accurate information would "make us look bad."
Martin pointed out that successful false reporting would not only deceive shareholders and the public, but failure to do so could have "massive legal and financial implications" for the third largest bank in the U.S., including "substantial" new fines.
The amended complaint also includes specific examples of Citigroup's compliance shortcomings.
This includes a $135.6 million fine imposed on July 10 by the Office of the Comptroller of the Currency and the Federal Reserve for the bank's "insufficient progress" in addressing issues identified in 2020.
This fine is the latest blow to CEO Jane Fraser, who has been striving to streamline Citigroup and has made rectifying regulatory mishaps a top priority.
