In the Forbes magazine interview on2/28/2014 on Corporate Leadership and Ethics, Citigroup CEO Michael Corbat is quoted:
“As much as I have to say it, at appears even now—five years after a crisis in which the financial services industry shouldered its fair share of blame-There are some people that still don’t get it. For all the talk about economic, political and regulatory environment, there is no greater risk to our institution and our industry than ethical lapses.”
Then this week we get this in the Wall Street Journal”
$7 billion fine for Citigroup for:
“Mr. Holder said the bank sold mortgage-backed securities with widespread defects and described Citigroup’s conduct as “egregious.”
“The bank’s activities contributed mightily to the financial crisis that devastated our economy in 2008,” Mr. Holder said. “Taken together, we believe the size and scope of this resolution goes beyond what could be considered the mere cost of doing business.”
“Citigroup employees often personally ordered the due diligence firms to change the loan grades…from reject to accepted,” said U.S. Attorney John Walsh of Colorado, whose office helped lead the investigation.
In all, the Justice Department uncovered 45 mortgage-security deals in 2006 and 2007 in which the bank made misrepresentations about the quality of the underlying loans, said Loretta Lynch, the U.S. attorney from Brooklyn.”
Where was Corbat? Didn’t he know this was going on? How can he preach ethics in February, when these activities have been going on for years in Citigroup with his employees?
What an ethical contradiction! I’m not surprised, just terribly disappointed again.