...The Role of Corporate Law in Preventing a Financial Crisis: Reflections on In re Citigroup Inc. Shareholder Derivative Litigation Franklin A. Gevurtz* TABLE OF CONTENTS I. INTRODUCTION .................................................................................................. II. CITIGROUP AS A CASE STUDY IN EXCESSIVE RISK-TAKING .............................. III. TOOLS FOR CURBING EXCESSIVE RISK-TAKING AND THE ROLE OF CORPORATE LAW ............................................................................................... A. The Tools for Curbing Excessive Risk-taking ............................................. 1. Regulation of Business Activities .......................................................... 2. Capital Requirements ........................................................................... 3. Compensation Rules ............................................................................. 4. Liability for Unreasonable Risks .......................................................... 5. Selection of Management (Rules of Corporate Governance) ............... B. Dividing the Tools Between Banking and Corporate Law .......................... IV. WHY IT MATTERS: CITIGROUP AS AN ILLUSTRATION OF THE LIMITATIONS OF STATE CORPORATE LAW ........................................................ A. Citigroup As a Case Study In Weak Corporate Law................................... 1. Overview ..................................................
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...thoroughness with which the topic is addressed. Paper should be three to four pages in length. Citigroup is dramatically expanding its Internet presence in an effort to approach its target of 1 billion customers By Bob Violino | | | | itigroup, the financial-services giant formed by the merger last fall of Citicorp and Travelers Group, wants to be the leader in online banking and E-commerce in the financial-services industry. It wants a piece of the major portals on the Internet. And these are part of an even bigger goal: expanding its customer base from 100 million to 1 billion by 2012, Citi's 200th anniversary. The billion-customer figure, first articulated by Citigroup in 1997, is more of a "stretch target" than a do-or-die goal, company officials say. But it reflects Citigroup's effort to broaden its influence and reach dramatically, an effort driven primarily by IT. Citigroup is preparing for the customer push with an aggressive E-business strategy that involves all aspects of its organization. The division Citigroup created two years ago to spearhead its E-commerce effort is working overtime to deploy new products and services. It's exploring radical ways to make it easier for customers to interact with the company. And Citigroup's traditional IT organization is making the infrastructure changes needed to support the company's online effort. Citigroup isn't abandoning its brick-and-mortar constituency. But the greatest potential for gaining new...
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...“Inside Job” Movie review -Deepshikha Dubey SYBCOM (Hons) Roll number-1071 ‘I nside job’ true to its title, is an exasperating documentary about the actual causes and consequences of the financial crisis of 2008. Directed by Charles Ferguson and narrated by Matt Damon, the movie is not a piece of muckraking or breathless support. It rests its infuriation on proper reason, research, figures and careful argument. Several interviews of eminent personalities from political, financial and academic backgrounds, along with news clips and aerial shots of New York, Iceland, London and other disaster areas — are all in there! Though dealing with a very complex issue, the movie has beautifully dealt with the topic and made it much easier for common man to understand the reason behind the nerve wrecking recent financial crisis that hit USA and then the world’s economy. The film is divided into five main parts, covering a wide scope- Who, what, when, why, how… it is all answered! Unlike most other documentaries that have been released over the past several years, ‘inside job’ bases its arguments on numbers and facts and doesn't just emotions. The first part of the movie- “How we got here?” Takes the viewers back to history in the 1930s when US had a strong financial system. The regular banks were local businesses and were not allowed to mess around with the depositor’s money. The investment banks were private partnerships and thus did not make risky investments...
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...CITIBANK INDIA Industry: Banking Financial services Owner Citigroup Founded 1902 Headquarters Mumbai, Maharashtra, India Profit After Tax INR 3422 crores (fiscal year ended March 31, 2015) Total Income INR 13490 crores (fiscal year ended March 31, 2015) Number of employees 7,500 Citibank financials: https://www.online.citibank.co.in/portal/newgen/home/Website-Citibank-Financials-2015.pdf Citibank India is an Indian private sector bank headquartered in Mumbai, Maharashtra. It is a subsidiary of Citigroup, a multinationl financial services corporation headquartered in New York City, United States. The Indian Headquarters are at Bandra Kurla Complex, a hub for multinational corporations in Mumbai. Currently, Citigroup, the owner of Citibank India, is the largest foreign direct investor in financial services in India with a total capital commitment of approximately US$4 Billion in its onshore banking and financial services business and its principal and alternate investment programmes.It operates 44 full-service Citibank branches in 31 cities and over 700 ATMs across the country. Citibank is an employer of about 7,500 people. Citi offers consumers and institutions a broad range of financial products and services,including consumerbanking and credit, corporate and investment banking, securities brokerage, and wealth management. Citi's franchise in...
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...Bianca Meneses Laura Riolli HROB 151 17 October 2015 As a teller for one of Wells Fargo's Northern California locations, Danielle D. Latimore tells us all the details of her job's chief objective, tasks and duties, and how much time is put in for each task. She also describes how management runs, along with the contacts, customers and services she most importantly interacts and deals with. Danielle states that the chief objective of being a teller is "to provide excellent customer service by following policies and procedures to complete transactions". The most important tasks of being a teller, where Danielle explains that each task takes 25% of a teller's work time, are to greet customers and give them a welcoming feeling, as well as to establish professional relationships with regular customers; to process customer transactions and help them manage their finances; to make financial services more convenient for customers, e.g. help them sign up for online banking. Other tasks take up the least of the work time, such as recommending additional products and services to meet the customers' needs (15%) and referring customers to Wells Fargo partners (10%). As a Wells Fargo teller, one must work their way up through the authorization check/cash handling process. For Danielle, $1000 is her current limit where she does not need to seek a supervisor's approval to complete the deposit. By December of 2015, she will be approved by her supervisor to increase the dollar amount due...
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...CH INSTITUTE OF MANAGEMENT AND COMMUNICATION Post Graduate Diploma in Management Term 2 Batch –III Guided By– Submitted By– Prof.Swati Sachar Satendra Dubey Introduction:- The case ‘Citibank’s E-Business Strategy for Global Corporate Banking(2008)’ is all about the city bank which was incorporated in 1812 as a city bank of new work in the whole case is about the adaptation of E-Business strategy by city bank and how and in what sense the benefited by the E-Business Strategy, In 2000, intense competition and the dot com boom put pressure on Citibank and its competitors to transform their business in the new economy. In response to these challenges, Citibank made a serious push to deliver integrated solutions that would enable its corporate customers to conduct transactions on line. Citibank’s e-business strategy – Connect, Transform and Extend – was to Web-enable its core services, develop integrated solutions, and reach new markets. The ultimate goal was to build a single Web-enabled platform for all customers with similar needs. As per the case Citibank’s vision was to become the world’s leading e-business enabler. It aimed to empower local, regional and global customers and the B2B2C marketplace and provide solutions to help them take advantage of the efficiencies and opportunities created by e-commerce [pic]. As...
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...| The 2008-2009 Credit Crises Executive Summary The Great Depression was when America faced the worst economic catastrophe in history. It wasn’t until the nineties that the financial industry started to re-invent itself for the purpose of making more money. Banks became successful at modifying legislation and creating ventures that would profit investors. The level of risk involved with the securities produced was ignored. Initially, the securities that were built were not expected to fail. When the home loan industry began to breakdown it became clear that something needed to be done. Legislation that the financial industry was trying to avoid was necessary. The Dodd-Frank Act was enacted as a result. Introduction The financial industry is currently facing a number of challenges such as poor investment strategies, improper activities by lenders and poor ethical standards within investment companies. Over the last 3 years more than 200 financial institutions within the United States have ceased to exist because of the 2008-2009 credit crises. Restoring confidence in the financial environment has been an uphill battle since the credit crises began. Today banks that were not able to sustain operations are being acquired by others that are more stable which causes the long-standing institutions to become more risky. As a result the acquisitions are dramatically affecting the remaining banks and further weakening the finance industry. Banks have been searching...
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...in Boston, for several years and then enrolled in Harvard Business School. While a student at Harvard, Dimon interned at Goldman Sachs and was offered a job there after graduation in 1982. He declined, instead going to work for the mentor who would profoundly shape his career: Sandy Weill. From 1982 to 1985 Weill and Dimon teamed up at American Express, where Dimon signed on as vice president and assistant to the president. Dimon's abilities to crunch numbers meshed well with Weill's people skills. When Weill was forced out of American Express, he made Dimon his second in command at the little-known consumer-lending outfit that he bought called Commercial Credit Company. That tiny firm was the beginning of what would eventually become Citigroup. Dimon was a key member of the team that launched and defined Commercial Credit's strategy. He served as the company's chief financial officer and an executive vice president and then later as president. Through the course of Dimon's time at the firm, Commercial Credit was completely restructured and made numerous acquisitions and divestitures, substantially improving its profitability. The most significant transaction was the 1987 acquisition of Primerica Corporation, which included Smith Barney. Commercial Credit then assumed the Primerica name. In 1983 Primerica had...
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...Student RES/351 April 16, 2012 Dr. UoP Professor Ethics Oriented Article Review The following is a summary of unethical business research conduct by Citigroup Inc. and subsequently resulting in trial proceedings for the unethical conduct. The summary will reveal the specific unethical behavior and who were the injured parties in this misconduct. Additionally, insight into how the unethical behavior affected the organization, the individuals, and society. Finally, evidence will be show how this unethical behavior could have been avoided or at a minimum resolved early in the research process. What unethical research behavior was involved? In 2002, Citigroup Inc. was accused of misleading investors. This misconduct was accomplished by the organizations’ research divisions with pressure from the investment sections within the company. The research analysts used biased research to promote the sale of stock that research had shown was not a good investment. The analysts misrepresented the legitimate research because of concern over from backlash from the organizations’ investment bankers. Additionally, the internal pressure from the investment sections to accomplish this misrepresentation was met the reward of bonuses and stock options for the research analysts. The end game in this misrepresentation was to ensure Citigroup, Inc. would have a better bottom line. Numerous examples illustrate the organizations viewpoint of increased profits were more important than a commitment...
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...Loan Details and Next Steps Please print this page as you will need these instructions to continue the application process. Also, be sure to review the Loan Details below and any action items assigned to you. To check the status of your application, visit Borrower Online Access at https://wfefs.wellsfargo.com/boa. Keep pages with personal or confidential information - such as a loan application number - in a secure place. You will need Adobe® Reader® to view the documents we provide. Download Adobe® Reader® for free. Important Reminder: Accessing PDFs from a Mac or a PC may require additional customer action. Learn More Loan Details ------------------------------------------------- Wells Fargo® Student Loan for Parents Action Items 1. Download, print, and sign your Wells Fargo® Student Loan for Parents Loan Request/Consumer Credit Agreement. Return it to Wells Fargo using the contact information above. Wells Fargo® Student Loan for Parents Loan Request/Consumer Credit Agreement We will send a confirmation email regarding your application and next steps to DJHALL48@AOL.COM. If additional documentation has been requested, please include your application number on each document. Send or fax your documents to Wells Fargo Education Financial Services using the contact information on this page. Your option to receive paper copies: You can obtain a paper copy of a document that was presented or signed electronically by contacting us using the contact information...
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...Citi's eBusiness Model By commercialprintin Citibank differentiate its e-business product 1. How does Citibank differentiate its e-business product offering from that of its competitors? How could Citibank create its own competitive advantages in the market place? Citibank differentiated itself from competitors by using their customer service effectively. They offered several services to their clients. Citibank offered telephone hotlines, customer relations managers to give individual attention to their customers, and service experts. Citibank also continued their investment in technology for the front and back end of the banking systems. Citibank committed to an “e-business strategy-Connect, Transform and Extend-was to web enable its core services, develop integrated solutions and reach new markets.” (McCauley & Khan, 2002, p.1). Citibank was also committed to its customers. According to the case study, ‘Citibank’s vision was to become the world’s leading e-business enabler". Citibank had over 268,000 employees located in over 100 countries and their focus was to embed their services into the everyday lives of the local population. “A bank that had roots in the country as deep as any local indigenous bank, building a broad customer base, offering diverse products, actively participating in the community and recruiting staff and senior management from the local population”. In addition to being committed to employees and customers around the world, Citibank has strong brand...
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...Citigroup: Restoring Ethics and Image Before Growth Charles Prince, CEO of Citigroup, is facing a daunting challenge as the head of the largest financial services organization in world. He has joined a company that has experienced significant regulatory scrutiny and that has been linked to the biggest scandals in corporate history. Unfortunately for Prince, the problems are pervasive throughout most of Citigroup’s diverse service offerings. In March 2005, Prince announced his strategy to transform the financial giant and to provide a new direction for the future. He called it the “Five Point Ethics Plan” to: improve training, enhance focus on talent and development, balance performance appraisals and compensation, improve communications, and strengthen controls. Due to the size and complexity of the organization, there were significant unresolved questions. How could the plan be effectively revealed? Would the plan be strong enough to change the culture of the entire organization? How should the corporate communications department handle both the initial and long-term communication of this plan to major stakeholders? About Citigroup Incorporated in 1998, Citigroup Inc. is a diversified global financial services holding company providing services to consumer and corporate customers. The company has approximately 141,000 full-time and 7,000 part-time employees in the United States and 146,000 full-time employees in more than 100 countries outside the United States. All of Citigroup’s...
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...hold a lot of power over the financial industry. One of Wells Fargo’s advantages is that that they hold a large amount of capital and have the ability to invest and keep mortgages on their own portfolio. Buyer power is high in the financial industry. The financial services industry is a service based industry, meaning if they do not please the consumer then they lose the customer. The products available by the financial industry are very similar. Although Wells Fargo puts a lot of effort into differentiating their product, the customer will go elsewhere if they feel as though they are not treated right. . Rivalry among existing firms exists between Wells Fargo, and the three following competitors: US Bancorp, Bank of America and Citigroup, this being said there is a high degree of substitutes available to the end consumer The only problem with this rivalry is that even though Wells Fargo has a national brand, the competitors can switch to lower costs and the customer will switch in the financial industry. When it comes to product differentiation, Wells Fargo has put effort into differentiating their products from that of their competitors allowing them to...
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...Cigna is a multifarious health care organization whose company reaches across the world to provide healthcare, to its consumer. Cigna has roots in the healthcare business from its parental foundation, dating back hundreds of years. In 1982, Cigna began its own venture in the healthcare organization in the state of Connecticut after the unification of Insurance Company of North America (INA) and Connecticut General Life Insurance Company (CG). By expanding its services to customers in the United States and around the globe that provides medical, dental, disability, life and accident insurance, and related products, Cigna has become a global health service leader. Network Growth and Strategies In 2014, Cigna launched a new brand campaign, Together, all the way” a promise to customers to work together with them to lead healthier, more secure lives (Cigna Company Profile, 2017). That campaign promise may change with the implementation of new changes and or revamping of the Affordable Care Act in 2017, according to (Hufford, 2017) Cigna will review its participation in the Affordable Care Act Exchange and entertain a merger with Anthem health insurance. The possible mergers of a handful of healthcare organizations will reverse the intention of the Affordable Care Act by eliminating competition and raise healthcare costs. The merger will accentuate Cigna’s profits and reduce expenses by eliminating competition and raising the premiums of consumers. Last year in 2016, posted on...
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...Unethical Behavior Involved In 2002, CitiGroup Inc. and other top Wall Street securities firms were accused of misleading investors. This misconduct was done by the securities firms’ research divisions. The analysts used biased research to sell stock that they knew were not good buys. The analysts ignored the legitimate research because of concern over from backlash from their investment bankers. They were encouraged to do this by the investment sections of their companies in return for bonuses and stock options. The real research the ten companies did was disregarded completely so that the company would have a better bottom line. In some cases, the analysts recommended stocks that they knew were no good. Citigroup was the parent of Salomon Smith Barney at the time of the ethical misconduct. “At Salomon Smith Barney, analyst Grubman reiterated a "buy" recommendation in February 2001 on Focal, an investment banking client, and a target price of $30 (twice the stock price). The same day, an institutional investor e-mailed a research analyst who worked for Grubman, "McLeod [McLeod USA Inc.] and Focal are pigs aren't they?" and asked whether Focal was a short. The analyst responded, "Focal definitely "" In April 2001, Grubman stated privately the need to downgrade Focal, but nevertheless once again advised investors to buy Focal” (Di Lorenzo, 2006). Some stocks went from $80 to $2 a share but the analysts were still pushing the stock. This went on for months and in some...
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