Globalisation:Citigroup

Controversies

WorldCom Scandal

In 2004, Citigroup agreed to pay $2.6bn (£1.4bn) to settle class action suits accusing it of participating in fraud with WorldCom, the phone company now known as MCI.

Shareholders sued Citigroup after the collapse of WorldCom and over allegations surrounding former Smith Barney (a subsidiary of Citigroup) telecom analyst Jack Grubman, who came under fire for hyping WorldCom and other hi-tech stocks.

WorldCom filed for the biggest bankruptcy in history in July 2002 amid accounting irregularities and Mr Grubman was subsequently fined $15m and barred from the securities industry for issuing misleading research.

Citigroup said it had agreed to settle federal class action suits brought on behalf of those who had purchased WorldCom stock and other securities from April 29, 1999, through June 25, 2002.

Charles Prince, Citigroup's chief executive, said the settlement was part of an effort "to put an unfortunate chapter behind us".

Global Crossing

In 2005 Citigroup paid $75m (£39.2m) to settle a class-action suit over its role in the collapse of telecom network provider Global Crossing.

The US banking giant had been accused of issuing inflated research reports and failing to flag up conflicts of interest in the three-year-old case.