FOX Business Network’s (FBN) Elizabeth MacDonald is reporting that “newly uncovered emails and documents from Citigroup (C) that FOX Business has obtained reveal that Citi executives were in open insurrection against top management over risky, speculative investments that failed in spectacular fashion in early 2008, even though Citi’s sales force had touted them as plain-vanilla, safe funds to its richest clients.” MacDonald reports that the bank “maintained it acted appropriately” however the documents obtained by FBN indicate “executives were growing increasingly worried that the managers of the funds were in over their heads.” Excerpts from the report can be found below, courtesy of Fox Business Networks.
On the risky investments being made by Citigroup executives:
“Newly uncovered emails and documents from Citigroup that FOX Business has obtained reveal that Citi executives were in open insurrection against top management over risky, speculative investments that failed in spectacular fashion in early 2008, even though Citi’s sales force had touted them as plain-vanilla, safe funds to its richest clients. What’s more, Citi’s internal emails and confidential documents show Citi’s own private bankers and financial advisors felt they themselves were duped by their fellow workers about the riskiness of these investments. That means investors could not possibly know the risks involved because even Citi’s salespeople themselves did not have the complete picture.”
On Citigroup’s response to allegations of making deceptive and risky investments:
“Citi has steadfastly maintained it acted appropriately. ‘Citi acted appropriately at all times in connection with these investments,’ a spokesman for Citigroup tells FOX Business in a statement. ‘Our disclosures were accurate and complete and the investors who purchased these investments were highly sophisticated and knew of the risks involved.’ The bank declined further comment.”
On the emails indicating there was risky investing occurring under the pretense of being safe:
“Citi’s offering documents obtained by FOX Business noted: ‘Asta provides investors with a stable, above-market return with little risk to principal.’ But, behind the scenes, Citi executives were growing increasingly worried that the managers of the funds were in over their heads. A top official, Maureen O’Toole, in Citi’s global wealth management unit emailed the co-heads of Citi’s fixed income alternative investments unit in November 2007, demanding reassurance that these fixed-income funds were good for investors.”
Disclaimer: This page contains affiliate links. If you choose to make a purchase after clicking a link, we may receive a commission at no additional cost to you. Thank you for your support!
Leave a Reply