<div class='quotetop'>QUOTE </div><div class='quotemain'>Jan. 23 (Bloomberg) -- Enron Corp. creditors could see their original payout more than quadruple to as much as $31 billion after a trial against Citigroup Inc. Enron Creditors Recovery Corp., the entity winding up the defunct energy trader's affairs, distributed $13.3 billion, or 36 cents on the dollar, since a bankruptcy plan was approved in 2004. That includes most of $1.73 billion in out-of-court settlements with 10 of the 11 banks creditors accused of aiding the fraud that wiped out the company. They argue that Citigroup, the only lender that hasn't settled, should pay the rest of the claims, about $18 billion. The amount is more than six times the $2.8 billion reserve for Enron, WorldCom Inc. and initial public offering-related litigation that Citigroup disclosed in a Nov. 5 regulatory filing. Evidence at a trial set for April in New York may include an examiner's report citing bank e-mails as evidence Citigroup assisted in the fraud. Testimony against the bank by Andrew Fastow, Enron's imprisoned former chief financial officer, may also be introduced. ``There's a lot of evidence that financial irregularities occurred and they were aided and abetted and assisted by the banks,'' said John Coffee, a Columbia Law School securities law professor in New York. The creditors' distribution from litigation and asset sales almost doubled to $11.5 billion in the year after April 2006. An $18 billion win this spring would bring the total to more than four times the 2006 figure. Deep Pocket The creditors say Citigroup should be forced to pay the remaining debt under a rule allowing recovery from one of a group of defendants for the total damages caused by all. The New York-based bank says the so-called deep-pocket rule shouldn't apply. ``Everyone is looking at Citi to see the kind of pocket it has left,'' said Nancy Rapoport, a law professor at the University of Nevada-Las Vegas and co-editor of a 2004 book on Enron. ``Citi has a lot to be worried about.'' The lawsuit is among legacies Vikram Pandit assumed in December on being named chief executive officer after Charles Prince III was forced to step down amid the global credit squeeze. Citi reported the largest loss in its history, $9.83 billion, for the fourth quarter posted Jan. 15 after it wrote down the value of subprime mortgage investments by $18 billion. The bank lost more than half its market value in the past year and fell yesterday to a 52-week low closing price of 24.40 in New York Stock Exchange composite trading. Citigroup considers the Enron lawsuit meritless and will fight it, spokesman Michael Hanretta said. No settlement talks are under way, said Harlan Loeb, an Enron creditors' spokesman. `Unprecedented' Evidence There's an ``unprecedented'' amount of evidence against Citigroup, said John Ray III, chairman of Houston-based Enron Creditors Recovery. This includes the report by examiner Neal Batson, who quoted one internal bank e-mail as saying, ``Sounds like we made a lot of exceptions to our standard policies'' in setting up an Enron deal. ``Let's remember to collect this IOU when it really counts.'' The bank ``bent its own internal rules and participated in transactions about which it had substantial reservations, in order to accommodate Enron and maintain an important client relationship,'' Batson concluded about special-purpose entities, or SPEs, used to disguise loans as investments. ``There is evidence both that Citigroup knew Enron's SPE transactions would result in Enron's financial statements being materially misleading, and that Citigroup provided substantial assistance to Enron in completing those transactions,'' he wrote. Eager for Trial Creditors are ``anxious to get to trial,'' Ray said, calling a Citigroup effort to move the case from U.S. Bankruptcy Court a stalling tactic. In December, the bank said the case should be heard before a U.S. District Court jury, not Bankruptcy Judge Arthur Gonzalez. Bankruptcy courts don't conduct jury trials and are below district courts in the federal judicial hierarchy. Citigroup attorney Brad Karp of Paul, Weiss, Rifkind, Wharton & Garrison in New York declined to comment. Enron creditors' attorney David Stern of Klee Tuchin Bogdanoff & Stern in Los Angeles didn't return a call seeking comment. Prince told Congress in 2002 the bank relied on Enron and its auditors for accounting advice in setting up transactions. Congressional investigators said Citigroup helped the energy trader hide debt by disguising loans as trades. The bank asked Gonzalez Jan. 7 to throw out most of the suit, saying Enron Creditors Recovery doesn't have standing to pursue creditors' claims. Enron, not banks that lent it money, is to blame for its collapse, Citigroup said in court papers. Citigroup claims Enron still owes it as much as $5 billion. Shareholder Accord Citigroup in 2005 agreed to a $2 billion settlement of another suit, in which Enron shareholders claimed banks helped executives including Kenneth Lay and Jeffrey Skilling commit fraud. The banks that refused to settle, including Merrill Lynch & Co., won when an appeals court ruled the shareholders couldn't sue as a group for the $40 billion they were seeking to recover. The U.S. Supreme Court yesterday refused to hear an appeal. Ray, of Enron Creditors Recovery, declined to comment on what would be a fair settlement in his case, saying only that he will continue to fight for returns. ``Certainly it's the bold aggressiveness that got us from 17 cents to what today is 36 cents,'' Ray said. Charles Tatelbaum, a bankruptcy attorney at Adorno & Yoss in Fort Lauderdale, Florida, said that while another $2 billion Citigroup settlement is possible, creditors are looking for more. ``They are gambling with house money,'' Tatelbaum said. ``The speculators that bought at 15 cents on the dollar are going to say go for it.'' Trading Claims The claims were bought from original creditors and may have been traded since. Bankruptcy claims are traded in private transactions whose terms are rarely disclosed. Claims were traded by Lehman Commercial Paper Inc., SPCP Group LLC, Bear Stearns Investment Products Inc. and Ore Hill Hub Fund Ltd., according to court documents. All the buyers declined to comment or didn't return calls. Even if Citigroup offers to bring the creditors' recovery to 50 cents on the dollar, that ``may not be enough to move the needle with this group,'' said Michael Sirota, a bankruptcy attorney with Cole Schotz Meisel Forman & Leonard in Hackensack, New Jersey. Enron creditors settled with Royal Bank of Scotland Group Plc, Royal Bank of Canada, Canadian Imperial Bank of Commerce, Toronto-Dominion Bank, JPMorgan Chase & Co., Credit Suisse Group, Merrill Lynch & Co., Fleet Bank N.A., Barclays Plc and Deutsche Bank AG. The case is Enron Creditors Recovery Corp. v. Citigroup Inc., 03-9266, and the bankruptcy case is In re: Enron Corp., 01-16034, both U.S. Bankruptcy Court, Southern District of New York (Manhattan).</div> Source: Bloomberg Enron mess is still ongoing. This will rock Citigroup's world if they have to pay out $18Billion.
<div class='quotetop'>QUOTE (Denny Crane @ Jan 23 2008, 04:00 PM) <{POST_SNAPBACK}></div><div class='quotemain'>Who runs Citigroup, and basically has since 2000?</div> Their current CEO, Sallie L. Krawcheck, was only recently promoted in 2007. She's been with Citigroup for awhile now though. I'm not sure who her predecessors were, but the CEO in 2000 was the infamous Sandy Weill.
<div class='quotetop'>QUOTE (Shapecity @ Jan 23 2008, 01:11 PM) <{POST_SNAPBACK}></div><div class='quotemain'><div class='quotetop'>QUOTE (Denny Crane @ Jan 23 2008, 04:00 PM) <{POST_SNAPBACK}></div><div class='quotemain'>Who runs Citigroup, and basically has since 2000?</div> Their current CEO, Sallie L. Krawcheck, was only recently promoted in 2007. She's been with Citigroup for awhile now though. I'm not sure who her predecessors were, but the CEO in 2000 was the infamous Sandy Weill. </div> That's the operations people, not who runs it. http://edition.cnn.com/2007/US/11/04/citigroup.ceo.ap/ November 5, 2007 -- Updated 0832 GMT (1632 HKT) Citigroup CEO retires; Rubin steps in <ul>[*]Story Highlights[*] Citigroup holds billions of dollars in losses from investing in bad debt[*] CEO Charles Prince has retired[*] Former Treasury Secretary Robert Rubin will replace him[/list]NEW YORK (AP) -- Citigroup Inc. Chairman and Chief Executive Charles Prince, beset by the company's billions of dollars in losses from investing in bad debt, resigned Sunday and is being replaced as chairman by former Treasury Secretary Robert E. Rubin. The nation's largest banking company announced Prince's widely expected departure in a statement following an emergency meeting of its board. Citi also said Sir Win Bischoff, chairman of Citi Europe and a Member of the Citi management and operating committees, would serve as interim CEO. Rubin, a former co-chairman of Goldman, Sachs & Co., has served as the chair of Citi's executive committee, and it was also expected he would take a greater role in leading the company. In a separate statement, Citi, which took a hit of $6.5 billion from asset writedowns and other credit-related losses in the third quarter, said it would take an additional $8 billion to $11 billion in writedowns. "It was the honorable course, given the losses we are now announcing," Rubin said of Prince's resignation in an interview with The Associated Press. Prince joined former Merrill Lynch & Co. CEO Stan O'Neal, who resigned from the investment bank last month, as the highest-profile casualties of the debt crisis that has cost billions at other financial institutions as well. Prince, 57, became chief executive of Citigroup in October 2003. Many shareholders criticized him openly for much of his tenure, as Citigroup's stock lagged its peers while Prince executed what was called an umbrella model of corporate organization, with several separate lines of business. Shares closed Friday at $37.73, about 20 percent below where they were when Prince became CEO. Prince's position looked especially shaky after the company on October 1 estimated that third-quarter profit would decline about 60 percent to some $2.2 billion after seeing nearly $6 billion in credit costs and write-downs of overly leveraged corporate debt and souring home mortgages. At that time, Prince said the bank's earnings would return to normal in the fourth quarter. But when Citigroup released its third-quarter results two weeks later, the write-downs and credit costs exceeded $6 billion, and Chief Financial Officer Gary Crittenden indicated the outlook going forward wasn't as upbeat as Prince had predicted. Citigroup wasn't alone in its third-quarter turmoil. When borrowers with poor credit stopped paying their mortgages, many banks not only had to take losses on those subprime mortgages, they also saw instruments in their portfolios backed by mortgages plummet in value. But Citigroup's stumbles were particularly grievous, given the bank's size, history and CEO, who had been telling shareholders for years to give his strategy a chance. Even in October, Prince said in a call to analysts: "I think any fair-minded person would say that strategic plan is working." Fixing Citigroup will take more than just cleaning up bad debt. The umbrella model that Sanford I. Weill created and Prince touted looked like a giant mess compared to its conglomerate counterpart JPMorgan Chase & Co. -- now led by Weill's former protege, Jamie Dimon. JPMorgan's writedowns were smaller, and strength in asset management, security services, card services and commercial banking units made up for weakness in other areas. Having cut costs and built up cash reserves in previous quarters, the bank was better prepared for a tough lending climate. Meanwhile, Citigroup's expenses outweighed revenues, it botched its fixed income trading operations, and its cash-to-debt ratio dipped. The anger toward Prince was so intense that during a conference call last month, Deutsche Bank analyst Mike Mayo told Prince that investors wanted a significant change in management. His supporters, though, argue that he was dealt a tough hand when his predecessor Weill gave him the reins, and that matching the hefty profit gains Citigroup saw in the 1990s would be difficult for any CEO. Weill was a fairly popular leader, building Citigroup through various mergers and acquisitions over the course of about 20 years into the huge conglomerate that it is today. When he stepped down as chairman in 2006 and handed the position to Prince, Weill -- now a board member -- got two standing ovations from shareholders and a big blue banner from employees that read, "Thank you, Sandy!" Prince, whose compensation came to nearly $25 million last year, is leaving under a much darker cloud. Citigroup, along with JPMorgan Chase & Co. and Bank of America Corp., is trying to create a fund to buy up distressed securities in the tight credit markets, a move some industry experts say smacks of desperation. Citigroup is the only major U.S. bank to manage "structured investment vehicles," or SIVs, and may end up having to take losses on them because demand for the assets that fund them has dropped. Rubin, 69, after 26 years at Goldman Sachs, became President Bill Clinton's chief economic adviser in 1993 before leading the Treasury Department. His experience steering the U.S. economy during the Mexican and Asian financial crises could come in handy as Citigroup attempts to navigate the tight credit markets. Bischoff, 66, was the chairman of the British investment bank Schroders PLC, then joined Salomon Smith Barney Inc., a subsidiary of Citi, when it acquired Schroders. He began his current position in May 2000. "There's no change of strategy that we see, actually, going forward," Bischoff said, noting that the company still plans to focus on international expansion, at least until a new CEO is chosen. It was not known whether Bischoff was in the running to replace Prince as CEO. Before Sunday's meeting, many ideas for Prince's replacement were floated by industry watchers; one name that has come up often is John Thain, who was once president of Goldman Sachs and is now CEO of NYSE Euronext. In 2004, Citigroup had to close its Japan Private Bank amid allegations of improper activities. And in January, former head of global wealth management Todd Thomson resigned, reportedly having been forced out for extravagant spending and dealings with CNBC anchor Maria Bartiromo. Citigroup did a minor reshuffling in early October, combining its investment banking and alternative investments businesses into one unit led by Vikram Pandit, who had led Citigroup's alternative investments unit. Tom Maheras, co-CEO of the investment banking unit, left. At the time, Rubin and Saudi Arabian Prince Alwaleed bin Talal -- Citigroup's biggest individual shareholder and once a critic of Prince -- expressed their support for the bank's embattled CEO.
According to their company profile here's the list of key executives with Vikram Pandit listed as CEO. Ms. Sallie L. Krawcheck , 43 Chairman of Citi Global Wealth Management, Chief Exec. Officer of Citi Global Wealth Management, Member of Bus. Heads Committee and Member of Operating Committee $ 6.32M $ 0 Mr. Robert E. Rubin , 69 Director, Member of Office of Chairman, Chairman of Exec. Committee, Member of Operating Committee and Member of Special Committee $ 9.40M $ 3.50M Mr. Stephen R. Volk , 71 Vice Chairman and Member of Operating Committee $ 5.87M $ 0 Mr. Charles Prince , 58 Advisor $ 14.20M $ 1.15M Mr. Vikram S. Pandit , 51 Chief Exec. Officer N/A N/A
A corporation doesn't resemble a pyramid. It's really an hourglass with the CEO where the two pyramids meet. Rubin was director, member of operating committee, member of executive committee, etc. He hired and fired the CEOs. What do you think the operating committee does? (Note: Ken Lay was Chairman and CEO of Enron, Rubin wears the Chairman title).
<div class='quotetop'>QUOTE (AEM @ Jan 23 2008, 04:12 PM) <{POST_SNAPBACK}></div><div class='quotemain'>When I think Citigroup, I can't get past Abu Dhabi and Pince Alwaleed bin Talal...</div> Exactly. It was one thing in the 80's when Japanese Companies were buying stuff left and right, but, foreign governments and state run companies of allegedly shady countries is another.
