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          Sarbanes Oxley Corporate Governance Commentary


Sayanora Citigroup. Japan shuts down Private Banking Unit.

Corporate Conflicts of Interest
at Citigroup (C): Japanese Financial Services Agency (FSA) has ordered Citigroup to shut down its private banking operations in Japan. Regulators said they found a list of problems at Citigroup's private banking arm, from improper trading practices to lax anti-money laundering procedures.

In addition, the FSA stated Citigroup also went beyond the scope of its banking license by brokering real estate and art deals for its clients; activities not allowed by banks under Japanese laws. Citigroup private bankers were also found to have misled customers about investment risk and overcharged for some financial products.

Citigroup must cease operations at four branches that conduct private banking in Japan. The FSA ordered the US banking group to suspend new private banking business and gave it one year to close all accounts at the four branches. Citigroup will have their licenses revoked on September 30, 2005.

This setback jeopardizes Citigroup's remaining operations in Japan. Citigroup will undoubtedly lose the trust of clients of high net worth, who had relied on the bank. It's no wonder that Citigroup has been running a multi-million dollar advertising campaign on financial news networks such as CNBC focusing on their private banking services.

A global business ethics program should also be considered to reinforce to all employees that corporate policies must be adhered to. It would also serve notice that the actions were of a few employees and not representative of the entire firm.

 
2005 Nelson Chin.
To inquire about consulting or speaking engagements, e-mail: Nelson Chin

Other Commentaries:

Former Computer Associates CEO faces new indictment. Could auditors have detected the fraud ?

Adelphia and ex-CEO Rigas to settle fraud case.

Arthur Andersen Conviction Overturned: Too Little Too Late.


Worldcom's Ebbers faces $30 Million Fine and life in prison.


Russian Oil Tycoon Mikhail Khodorovsky: Guilty of Fraud and Victim of Politics?

Accounting Giant KPMG Probed for Unlawful Conduct.

Former CEO of HealthSouth Scrushy acquitted.


Former Tyco CEO Kozlowski convicted, faces 30 years.

Outgoing TOYS R US CEO's Favorite Toy? The Golden Parachute.

Sayanora Citigroup. Japan shuts down Private Banking Unit.

Heist at the Bellagio or plot twist for the New Ocean's Eleven sequel?

Eisner versus Ovitz. The Showdown in Tinseltown.


Marsh sinks deeper in insurance scandal.

Managers disconnected at Verizon.

What is Martha stuffing in her stocking this holiday season?

Is Apprentice Street Smart Candidate a College Graduate?


Outsourcing Employees - coming soon.

Samples of Written Policies:

Conflicts of Interest v1
Conflicts of Interest v2
Conflicts of Interest v3

Audit Committee v1

Regulatory:

Sarbanes-Oxley Act of 2002

Final Arthur Andersen Alumni Letter

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