Fed, OCC hit Citigroup with enforcement orders, $400M penalty (up to date) (NYSE:C)

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Citigroup (NYSE:C) pays a $400M civil penalty from the Office of the Comptroller of the Currency, and the Federal Reserve has issued an enforcement motion calling on the agency to right “longstanding” deficiencies.

The Fed’s cease and desist order calls on Citigroup to reinforce firmwide danger administration and inner controls, saying the corporate hasn’t taken immediate and efficient motion to right beforehand recognized points within the areas of “compliance danger administration, knowledge high quality administration, and inner controls.”

In the meantime, the OCC’s penalty is tied to deficiencies in “enterprise-wide danger administration, compliance danger administration, knowledge governance, and inner controls.” It additionally issued a stop and desist order calling for broad and complete corrective actions, which requires the financial institution to get an OK from OCC earlier than important new acquisitions.

Citi shares are -1.4% after hours.

Up to date: in a response, Citi says “We’re disenchanted that now we have fallen wanting our regulators’ expectations, and we’re totally dedicated to completely addressing the problems recognized within the Consent Orders. Citi has important remediation tasks underway to strengthen our controls, infrastructure and governance. These tasks are every multi-year and have obtained important funding. Nevertheless, whereas now we have made progress in every of those areas, we acknowledge that substantial enchancment remains to be required to satisfy the requirements now we have set for ourselves and that our regulators anticipate of us.

“To that finish, now we have accelerated investments and made structural adjustments. This 12 months alone, we’ll make investments over $1B on this space. In June, we employed Karen Peetz as Chief Administrative Officer to centralize program administration and steer these applications to completion.”

Earlier at the moment, BofA mentioned Citi needed to clear its regulatory overhang earlier than making a run for its price target of $74/share.

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