Citigroup Inc. (C) has denied allegations made by a former managing director who claims she was fired for reporting attempts to provide misleading information to regulators. The bank maintains that the employee’s dismissal was due to performance issues, while the former executive insists she was retaliated against for raising concerns about data manipulation.
In May, Kathleen Martin, a former managing director hired in 2021 to address data issues, filed a lawsuit against Citigroup, alleging that her supervisor, Chief Operating Officer Anand Selva, instructed her to conceal “critical information” about the bank’s data-governance metrics from the Office of the Comptroller of the Currency (OCC). Martin claims that Selva attempted to hide information that could harm Citi’s reputation, leading to her dismissal as a form of retribution.
Martin was part of a team dedicated to adhering to 2020 OCC and Federal Reserve consent orders related to risk management, data governance, and internal controls. However, Citigroup counters that Martin’s performance issues were already under review prior to these events and that she became interim data transformation chair after replacing her mentor, Rob Casper. The company contends that following her mid-year review in July 2023, Martin contacted human resources, fearing her job security.
Martin’s attorney, Valdi Licul, expressed satisfaction with Citigroup’s response to the lawsuit, stating, “We look forward to conducting the depositions of Ms. Fraser and Mr. Selva to show that they fired Ms. Martin only because she complained about illegal activity.”
This incident adds to a string of regulatory actions against Citigroup. Last month, the bank agreed to pay a $138,000 fine and $10,600 in costs for failing to report large options contract positions. Earlier, U.S. bank regulators, including the Federal Reserve Board and the OCC, had fined Citigroup $135.6 million for noncompliance with a 2020 enforcement action.
In a separate case, a federal appeals court ruled that Tamika Miller, the company’s vice president, is not entitled to a portion of the $400 million civil fine Citigroup agreed to pay in October 2020 due to its risk management failures. Furthermore, last month, Citigroup reportedly violated the U.S. Federal Reserve’s Regulation W, leading to liquidity reporting errors.
Despite these regulatory issues, Citigroup stock has witnessed a significant increase, gaining around 50% in the past 12 months. Investors can gain access to the stock through vehicles such as the First Trust Nasdaq Bank ETF (FTXO) and Series Portfolios Trust InfraCap Equity Income Fund ETF (ICAP).
As of Monday’s premarket trading, Citigroup shares were up 0.34% at $62.35.
