The top management at the Citigroup has been struggling to restore its credibility, operational expertise and bring the bank's performance back on track. The task is not that easy as the group is harvesting negative headlines. The recent scandals—the Thompson scandal, the "phishing and skimming" e-mail frauds and the leakage of a US Citibank customers' accounts at an Indian call center—have been a major blow to the company, especially in the US. The various scandals involving Citigroup have flawed its image among some shareholders, analysts and employees. Despite best efforts by Charles Prince, Citigroup's Chief Executive, the company continues to be dogged by regulatory and legal problems around the world. Meredith A Whitney, Banking Analyst with CIBC World Markets, says, "The bigger problems for Citi are the years of underinvestment that they are suffering from and it would still take a long time to turn this thing around." The scandals that raked the world's largest financial services company include.
Citigroup has faced one of the worst consumer scams till date. Hundreds of its US customers were affected when hackers broke into the ATM network through a retail store server and stole a block of PINs and the keys to decrypt them. As a result of the security breach, a large-scale of US consumers' information had been exposed. There were fraudulent ATM cash withdrawals on Citibank-branded MasterCard credit and debit cards in Canada, the UK and Russia, because of the accounts that were compromised in the security breaches at "retailers in the US". In this particular scam, it was assumed that the magnetic-stripe data found on the back of ATM cards was stolen (likely from a retailer), which large banks typically validate. |
