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CITIGROUP INC. STOCK BROKER MISCONDUCT

 

Citigroup-logoCitigroup has had a history of deceiving investors on a large scale. Several of the largest financial scandals in the past decade have involved Citigroup, the broker-dealer with more than 16,000 offices worldwide. Since supervisory failures and irresponsible trading on Citigroup’s behalf have routinely harmed American investors, it’s a great wonder why this firm was dubbed by Congress to be “too large to fail.”

HAVE YOU INVESTED YOUR MONEY WITH CITIGROUP INC?

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Larry Hagman Hits Back at Citi

Which broker-dealer paid the largest regulatory award to an individual investor 2010? This dubious honor went to Citigroup, which was ordered to pay $12 million after defrauding one of its former clients.

Larry Hagman, the former star of the hit TV show “Dallas”, and his wife opened an account with investment advisor Lisa Ann Detanna in 2005. Though Detanna and the firm were given specific instructions to invest the Hagmans’ money conservatively, the broker began investing more than 75 percent of the portfolio in risky stocks.

Detanna also purchased an extremely pricey life insurance policy for the Hagmans, under Citigroup’s supervision, that served no real purpose. In addition to annual premium payments of $168,000, the policy ended up costing $437,000 once the market fell; since the Hagmans had plenty of money protecting them in retirement, all they needed was to invest safely.

This incident, which spawned thousands of “Who Shot J.R.” pun headlines, is just the latest in a string of major regulatory mishaps for Citigroup Inc.

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HAVE YOU INVESTED YOUR MONEY WITH CITIGROUP INC?

Contact one of our attorneys to get a no-cost, no-obligation consultation.
By phone: Call us toll-free at 1 (888) 986-9010
By email: Please fill out the form to the right

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Enron, WorldCom, Citigroup

In 1999, Enron executives used five banks as underwriters to raise equity for their multi billion-dollar accounting fraud scheme at the term of this century. Citigroup finally agreed to settle with investors-including ex-Enron employees-for $2 billion.

Citigroup had played a played a similar role as lead banker in the demise of WorldCom, which is why multiple class-action lawsuits were filed against the firm and an eventual $2.65 billion settlement was reached.

PhotobucketFor many these financial scandals have been overshadowed by recent events, but it is worthwhile to highlight a company’s involvement with scandal when it is especially routine and spans several years. Enron and WorldCom investors remained in legal battles with Citigroup for so long, and Larry Hagman sued Citigroup when he was already well into retirement, because victims of broker misconduct never forget.

 

Bailout and Beyond

The U.S. Government provided more than $45 billion in TARP bailout money to Citigroup in late-2008, in an effort to prevent the bank from failing. Months later, Citigroup paid out hundreds of millions in bonuses to 1,038 employees, with 143 executives receiving at least $4 million each.

And in case you noticed, the federal bailout came on the heels of Citigroup’s negotiations of the SEC over its sale of auction-rate securities.

While Congress has its many reasons for wanting to prop up Citigroup, investors should be well aware that the broker has been named in more than 750 FINRA arbitrations in the past ten years.

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