Citigroup CEO Vikram Pandit lost his bid last month for a pay plan that would have awarded him $15 million when Citi shareholders rejected the proposal. But he is still in the job making obscene amounts and shareholders need to do more. We need to fire the executives who led these institutions into the financial crisis–fire all of them. And prosecutors need to bring criminal charges in order to restore any sense of justice and trust in the financial sector.
The below clip highlights the outcome of a whistle-blower law suit recently won against Citi group. Citigroup admitted approving loans for government insurance that didn’t qualify under Federal Housing Administration rules.
By 2006, the bank was buying mortgages from outside lenders with doctored tax forms, phony appraisals and missing signatures, she says. It was Hunt’s job to identify these defects, and she did, in regular reports to her bosses.
Executives buried her findings, Hunt says, before, during and after the financial crisis, and even into 2012.
In March 2011, more than two years after Citigroup took $45 billion in bailouts from the U.S. government and billions more from the Federal Reserve — more in total than any other U.S. bank — Jeffery Polkinghorne, an O’Fallon executive in charge of loan quality, asked Hunt and a colleague to stay in a conference room after a meeting.
The encounter with Polkinghorne was brief and tense, Hunt says. The number of loans classified as defective would have to fall, he told them, or it would be “your asses on the line.”
Hunt says it was clear what Polkinghorne was asking — and she wanted no part of it.
Citigroup behaving badly as late as 2012 shows how a big bank hasn’t yet absorbed the lessons of the credit crisis despite billions of dollars in bailouts, says Neil Barofsky, former special inspector general of the Troubled Asset Relief Program.
“This case demonstrates that the notion that the bailed-out banks have somehow found God and have reformed their ways in the aftermath of the financial crisis is pure myth,” he says.
As a reward for blowing the whistle on her employer, Hunt, the country girl turned banker, got $31 million out of the settlement paid by Citigroup.
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