97-581: FGG may refer to: Fairfield Greenwich Group , an American investment firm Federation of Gay Games Fibrinogen gamma chain Flat Glass Group , a Chinese glass production company Foundation for God's Glory , an American charity "FGG", a song by Susumu Hirasawa from The Ghost in Science Topics referred to by the same term [REDACTED] This disambiguation page lists articles associated with
194-551: A censure from state officials, agreed to provide restitution to Massachusetts investors, and paid a $ 500,000 fine. On April 13, 2009, a Connecticut judge dissolved a temporary asset freeze from March 30, 2009, and issued an order for Walter Noel to post property pledges of $ 10 million against his Greenwich home and $ 2 million against Jeffrey Tucker's. Noel agreed to the attachment on his house "with no findings, including no finding of liability or wrongdoing". Andres Piedrahita's assets continued to remain temporarily frozen because he
291-680: A joint venture meant to introduce Asian investors to the firm. Richard Landsberger, a Fairfield partner, is director. In September 2008, Banque Bénédict Hentsch, a private Swiss bank, managing $ 2 billion in assets, merged with Fairfield Greenwich Group, intending to create an $ 18 billion venture in combined assets. Bénédict Hentsch, founder and chairman of the board of directors, stated that clients would gain access to Fairfield Greenwich's funds, while Fairfield Greenwich clients would be able to access BBH's wealth management services. Bénédict Hentsch and Robert Pennone became directors of Fairfield Greenwich Group, and Charles Murphy and Mark McKeefry joined
388-405: A whistleblower in 2006, 60% of the mortgages were defective. The number of bad mortgages began increasing throughout 2007 and eventually exceeded 80% of the volume. Many of the mortgages were not only defective but were a result of mortgage fraud . Bowen attempted to rouse the board via weekly reports and other communications. On November 3, 2007, Bowen emailed Citigroup chairman Robert Rubin and
485-509: A $ 1.6 billion loss in 2009. Late in 2010, the government sold its remaining stock holding in the company, yielding an overall net profit to taxpayers of $ 12 billion (~$ 16.4 billion in 2023). A special IRS tax exception given to Citi allowed the US Treasury to sell its shares at a profit, while it still owned Citigroup shares, which eventually netted $ 12 billion. According to Treasury spokeswoman Nayyera Haq, "This (IRS tax) rule
582-462: A 17% interest in the firm. Though he is not as prominent as the Noels, Tucker benefited from Fairfield's success. In 2007, Tucker, chairman of Empire Racing, led the group of thoroughbred investors, who sought to bid for New York State's horse-racing franchise. In 2004, the firm formed a partnership with Lion Capital of Singapore , now Lion Global Investors, and created Lion Fairfield Capital Management,
679-457: A 17% ownership interest. Walter Miller Noel, Jr. was born in Birmingham, Alabama in 1930 to Walter and Corinne (née Travis) Noel. At the time of Noel's birth, his father was a mortgage appraiser. The family moved to Kenmore, New York , a suburb of Buffalo, where Noel was raised. Noel attended Montgomery Bell Academy , Vanderbilt University and Harvard Law School . Noel had previously been
776-408: A 20% share of profits on investments, about double what competitors charged that farmed out clients' money to a variety of fund managers. In October 2004, it also began collecting a 1% fee on assets under management. Madoff didn't charge additional fees, rather a commission on trades he allegedly executed. This arrangement raised suspicions and doubt among other money managers . Harry Markopolos ,
873-443: A Mexican oil services firm. The plaintiffs claimed that Citigroup conspired with Oceanografia to accept falsified work estimates. The courts found in favor of Citigroup. In April 2016, Citigroup announced that it would eliminate its bad bank , Citi Holdings. Citi Capital Advisors (CCA), formerly Citi Alternative Investments, was a hedge fund that offered various investment strategies across multiple asset classes. To comply with
970-616: A Shanghai-based equity and debt brokerage operating in the Chinese market. In January 2019, Citigroup announced that it sold its stake in the business to its Chinese partner. The company failed the Comprehensive Capital Analysis and Review stress tests in 2012 due to Citi's high capital return plan and its international loans, which were rated by the Fed to be at higher risk than its domestic American loans. In 2013, Sanjiv Das
1067-445: A distribution "simply doesn't exist in finance", since the markets are too volatile under the best of conditions for this to be possible. Madoff frequently "over-hedged" his trades for Fairfield Sentry by buying more options than necessary to hedge his stock positions. In many cases, he did so to generate profits, a violation of his contract with Fairfield Greenwich. In May 2008, for instance, over $ 95 million of Sentry's earnings were
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#17328587959091164-546: A group of New York merchants , the bank opened for business on September 14 of that year, and Samuel Osgood was elected as the first President of the company. After the Panic of 1837 , Moses Taylor acquired control of the company. The company's name was changed to The National City Bank of New York in 1865 after it converted its state charter into a federal charter and joined the new U.S. national banking system. After Taylor died in 1882, Percy Rivington Pyne I became president of
1261-536: A million dollars — so I am not that upset personally," said Alberto Mugrabi, a son of the family patriarch. "It was a very informal thing. We know Andrés (Piedrahita) since forever, from Bogotá, he's a great guy, and he says to us, 'This is the Madoff thing, he's the master.' I trusted Andrés. I still trust him." In early 2005, The Abu Dhabi Investment Authority invested approximately $ 400 million. After redemptions in 2005 and 2006, it continued to invest $ 132 million, 2% of
1358-423: A one-16th shared interest in a Cessna 560XL private jet, purchased in late 2006. Tucker wanted to sell his three horse farms, which he bought in 2004 for $ 18 million. They each include furnished homes. Most of his horses have been sold. Tucker's wife Melanie, an avid bridge player, was accustomed to using her husband's jet to fly herself, and the bridge pros hired to play on her team, to bridge tournaments across
1455-639: A private banker in Lausanne, Switzerland , then worked at Citigroup , before becoming the head of Chemical Bank 's international private banking practice in Nigeria , Switzerland, and Brazil . Noel met his Brazilian-born wife, Monica Haegler, who hails from a prominent Swiss family, while she was studying at Wellesley College in Massachusetts. They have five daughters and 19 grandchildren. Their daughters married into families that provided additional connections for
1552-713: A product pusher. On January 16, 2009, Citigroup announced its intention to reorganize itself into two operating units: Citicorp for its retail and institutional client business, and Citi Holdings for its brokerage and asset management. Citigroup will continue to operate as a single company for the time being, but Citi Holdings managers will be tasked to "take advantage of value-enhancing disposition and combination opportunities as they emerge", and eventual spin-offs or mergers involving either operating unit were not ruled out. Citi Holdings consists of Citi businesses that Citi wants to sell and are not considered part of Citi's core businesses. The majority of its assets are U.S. mortgages. It
1649-472: A result of the criticism and the U.S. Government's majority holding of Citigroup's common stock , compensation and bonuses were restricted from February 2009 until December 2010. In 2009, Jane Fraser , the CEO of Citi Private Bank, stopped paying its bankers with a commission for selling investment products, in a move to bolster Citi Private Bank's reputation as an independent wealth management adviser, as opposed to
1746-532: A retail bank, the third largest issuer of credit cards , as well as its wealth management business. Citigroup was formed on October 8, 1998, following the merger of Citicorp, the bank holding company for Citibank , and Travelers to create the world's largest financial services organization. Citibank , (formerly City Bank of New York) was chartered by the State of New York on June 16, 1812, with $ 2 million (~$ 43.4 million in 2023) of capital. Serving
1843-646: A significantly higher level of due diligence work than typically performed by most fund of funds and consulting firms". It is an employee-owned firm with 140 employees, 21 of whom are shareholders. At one time, it reported $ 16 billion in assets under management . It was reported that foreign investors provided 95% of its managed assets, 68% from Europe, 6% from Asia, and 4% from the Middle East. Each of Noel's four daughters married into international families. In 2008, Fairfield Greenwich reported more than $ 14 billion in assets under management. Presently, Walter Noel has
1940-515: A single company in December 1993. With the acquisition, the group became Travelers Inc. Property & casualty and life & annuities underwriting capabilities were added to the business. Meanwhile, the distinctive Travelers red umbrella logo, which was also acquired in the deal, was applied to all the businesses within the newly named organization. During this period, Travelers acquired Shearson Lehman —a retail brokerage and asset management firm that
2037-402: Is a mixed bag, its primary objective is to wind down some non-core businesses and reduce assets, and strategically "breaking even" in 2015. On February 27, 2009, Citigroup announced that the U.S. government would take a 36% equity stake in the company by converting US$ 25 billion in emergency aid into common stock with a United States Treasury credit line of $ 45 billion to prevent
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#17328587959092134-585: Is an investment firm founded in 1983 in New York City. The firm had among the largest exposures to the Bernard Madoff fraud. The firm was founded in 1983 by Walter M. Noel Jr. At one time, the firm operated from Noel's adopted hometown in Greenwich, Connecticut , before relocating its headquarters to New York City, New York. In 1989, Noel merged his business with a small brokerage firm whose general partner
2231-809: The Financial Stability Board , and is commonly cited as being " too big to fail ". It is one of the eight global investment banks in the Bulge Bracket . Citigroup is ranked 36th on the Fortune 500 , and was ranked #24 in Forbes Global 2000 in 2023. Citigroup operates with two major divisions: Institutional Clients Group (ICG), which offers investment banking and corporate banking services, as well as treasury and trade solutions (TTS) and securities services such as custodian banking ; and Personal Banking and Wealth Management (PBWM), which includes Citibank ,
2328-499: The New York Stock Exchange . As a result, late in the evening on November 23, 2008, Citigroup and Federal regulators approved a plan to stabilize the company and forestall a further deterioration in the company's value. On November 24, 2008, the U.S. government announced a massive bailout for Citigroup designed to rescue the company from bankruptcy while giving the government a major say in its operations. A joint statement by
2425-608: The US Treasury Department , the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) announced: "With these transactions, the U.S. government is taking the actions necessary to strengthen the financial system and protect U.S. taxpayers and the U.S. economy." Citi received the largest amount of TARP funding, "a larger bailout than any other U.S. bank." The bailout called for
2522-744: The mutual fund statutes of the British Virgin Islands and technically under the control of their local directors. Spanish anticorruption prosecutors investigated Fairfield Greenwich as well as Piedrahita to determine what they knew about Madoff's fraudulent funds when they sold them to Spanish clients. According to Fairfield's offices in Spain, Spanish investments totaled $ 89.1 million. On November 19, 2010, both Greenwich Sentry, L.P. and Greenwich Sentry Partners, L.P. voluntarily filed for Chapter 11 bankruptcy protection in New York. Court filings blamed
2619-552: The " Everything card " and later to become MasterCard —in 1967. Also in 1967, First National City Bank was reorganized as a one-bank holding company, First National City Corporation, or "Citicorp" for short. The bank had been nicknamed "Citibank" since the 1860s when it began using this as an eight-letter wire code address. In 1974, under the leadership of CEO Walter B. Wriston , First National City Corporation changed its formal name to "Citicorp", with First National City Bank being formally renamed Citibank in 1976. Shortly afterwards,
2716-573: The 24th floor of the Sofitel New York Hotel on March 27, 2017. His widow, Annabelle Murphy, later sold the townhouse for only $ 28.5 million in April 2018, well below its peak $ 49.5 million asking price in 2016. Citigroup Citigroup Inc. or Citi ( stylized as citi ) is an American multinational investment bank and financial services company based in New York City . The company
2813-678: The Commonwealth William Galvin filed a civil action charging Fairfield Greenwich with fraud, breaching its fiduciary duty to clients by failing to provide promised due diligence on its investments. The complaint sought a fine and restitution to Massachusetts investors for losses and disgorgement of performance fees paid to Fairfield by those investors. It alleged that in 2005 Madoff coached Fairfield staff about ways to answer questions from SEC attorneys who were looking into Harry Markopolos' complaint about Madoff's operations. The Secretary of State had stated that he had no plans to settle
2910-596: The Cuban sugar industry, since the mid-19th century. The purchase of U.S. overseas bank International Banking Corporation in 1918 helped it become the first American bank to surpass $ 1 billion in assets. During the United States occupation of Haiti and the bank's income from Haiti's loan debt related to the Haiti indemnity controversy , the bank earned some of its largest gains in the 1920s due to debt payments from Haiti, becoming
3007-616: The FDIC after the collapse of IndyMac Bank , with the goal of keeping as many homeowners as possible in their houses. Executive salaries would be capped. As a condition of the federal assistance, Citigroup's dividend payment was reduced to $ 0.01 per share. In a New York Times op-ed, Michael Lewis and David Einhorn described the November 2008 $ 306 billion (~$ 425 billion in 2023) guarantee as "an undisguised gift" without any real crisis motivating it. According to The Wall Street Journal ,
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3104-650: The Fairfield Sentry fund in 1990 with $ 1 million in " seed money ", and began expanding it a year later. At the time, Noel and Tucker said Madoff provided more information and transparency than most hedge funds, and operated a reputable Wall Street firm. The Fairfield Sentry fund required a $ 100,000 minimum investment, and was billed as a way to tap Madoff's trading expertise using "algorithmic technology" while Fairfield with due diligence conducted "systematic investment compliance". It had more than $ 7 billion invested with Madoff, and became one of his largest victims. It
3201-566: The First National City Bank of New York in 1955. The "New York" was dropped in 1962 on the 150th anniversary of the company's foundation. The company organically entered the leasing and credit card sectors, and its introduction of U.S. dollar-denominated certificates of deposit in London marked the first new negotiable instrument in the market since 1888. The bank introduced its First National City Charge Service credit card—popularly known as
3298-705: The Funds' NAVs that were sent to the investors. ... Accordingly, the Court finds that Plaintiffs allege a relationship between the investors and the Administrators that gives rise to a duty of care Fairfield was also a defendant in a lawsuit filed in Miami against PricewaterhouseCoopers Ireland by investors in a fund marketed by defendant Banco Santander SA , Europe's second-largest bank by market value, which lost an estimated $ 3 billion. On April 1, 2009, Massachusetts Secretary of
3395-587: The Great Depression—forbade banks to merge with insurance underwriters, and meant Citigroup had between two and five years to divest any prohibited assets. Weill stated at the time of the merger that they believed "that over that time the legislation will change ... we have had enough discussions to believe this will not be a problem". Indeed, the passing of the Gramm-Leach-Bliley Act in November 1999 vindicated Reed and Weill's views, opening
3492-509: The Primerica name, and employed a " cross-selling " strategy such that each of the entities within the parent company aimed to sell each other's services. Its non-financial businesses were spun off . In September 1992, Travelers Insurance , which had suffered from poor real estate investments and sustained significant losses in the aftermath of Hurricane Andrew , formed a strategic alliance with Primerica that would lead to its amalgamation into
3589-457: The SEC about Madoff, Markopolos noted that in 14 years, Madoff only reported four losing months. Markopolos claimed this was equivalent to a baseball player with a .960 batting average, or an NFL team going 96–4 over a 100-game span. For years, Fairfield's return stream rose steadily upward with only a few downticks, represented graphically by a near-perfect 45-degree angle. Markopolos contended that such
3686-621: The U.S. It also has Latin America partnership cards with Colombia-based airline Avianca and with Banamex and AeroMexico; and a merchant loyalty program in Europe. Citibank is also the first and currently the only international bank to be approved by Chinese regulators to issue credit cards under its own brand without cooperating with Chinese state-owned domestic banks. In 2012, the Global Markets division and Orient Securities formed Citi Orient Securities,
3783-645: The bank launched the Citicard, which pioneered the use of 24-hour ATMs . John S. Reed was elected CEO in 1984, and Citi became a founding member of the CHAPS clearing house in London. Under his leadership, the next 14 years would see Citibank become the largest bank in the United States and the largest issuer of credit cards and charge cards in the world, and expand its global reach to over 90 countries. Travelers Group, at
3880-605: The bank ... Banque Bénédict Hentsch have immediately taken all appropriate steps in order to protect the interests of its clients and those of the bank. Noel and Tucker were introduced to Madoff in 1989 by Tucker's father-in-law, from Scarsdale, New York , who knew Madoff and had invested with him. In 2006, the Securities and Exchange Commission, as part of an investigation into Madoff's activities, determined that Fairfield Greenwich had not properly disclosed that Madoff oversaw its investment decisions, though no evidence of fraud
3977-475: The bank's chief financial officer , head auditor, and the chief risk management officer to again expose the risk and potential losses, claiming that the group's internal controls had broken down and requesting an outside investigation of his business unit. The subsequent investigation revealed that the Consumer Lending Group had suffered a breakdown of internal controls since 2005. Despite the findings of
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4074-473: The bank's reputation. On April 6, 1998, Citicorp and Travelers announced a merger. The deal would enable Travelers and Citicorp to access each other's customer base for the marketing of financial products. In the transaction, Travelers Group acquired all Citicorp shares; existing shareholders of each company owned about half of the new firm. While the new company maintained Citicorp's "Citi" brand in its name, it adopted Travelers' distinctive "red umbrella" as
4171-559: The bank. He died nine years later and was replaced by James Stillman . The bank became the largest bank in New York City after the Panic of 1893 and the largest bank in the U.S. by 1895. It became the first contributor to the Federal Reserve Bank of New York in 1913, and the following year it inaugurated the first overseas branch of a U.S. bank in Buenos Aires , although the bank had been active in plantation economies, such as
4268-737: The bankruptcy filings on the cost of the Madoff-related litigation, and asserted a goal of reaching a global settlement of the litigation for the bankruptcy cases. On February 4, 2009, Madoff whistleblower Harry Markopolos testified before Congress. In his prepared statement he discussed Fairfield Greenwich's accounting practices regarding its choice of auditors and accused it of frequently switching them, or "auditor shopping". However, Markopolos did not distinguish between separate auditors for separate funds within Fairfield Greenwich, which did not actually change as he alleged. Noel and Tucker sold
4365-406: The bankruptcy of the company. The government guaranteed losses on more than $ 300 billion of troubled assets and injected $ 20 billion immediately into the company. The salary of the CEO was set at $ 1 per year and the highest salary of employees was restricted to $ 500,000. Any compensation amount above $ 500,000 had to be paid with restricted stock that could not be sold by the employee until
4462-472: The board of Banque Bénédict Hentsch Fairfield Partners SA. In mid-December 2008, it terminated the merger due to the Madoff crisis. It had $ 47.5 million of client assets at risk with Madoff. The founding shareholders of the bank have terminated their partnership with the Fairfield Greenwich Group. They have concluded an agreement with the latter whereby they have repurchased the total capital of
4559-485: The case of Anwar v. Fairfield Greenwich (SDNY) relating to fund administrator liability for failure to handle its NAV-related obligations properly, the defendants settled in 2016 by paying the Anwar plaintiffs $ 235 million. The court held in the case, prior to the settlement, that it is reasonable to infer from Plaintiffs' allegations that the Administrators were aware that Plaintiffs would—and did—rely on their statements of
4656-431: The chief underwriter of Citigroup's Consumer Lending Group, began warning the board of directors about the extreme risks being taken on by the mortgage operation that could potentially result in massive losses. The group bought and sold $ 90 billion of residential mortgages annually. Bowen's responsibility was essential to serve as the quality control supervisor ensuring the unit's creditworthiness. When Bowen first became
4753-468: The country. She postponed attending tournaments requiring air travel. Executive Charles Murphy initially offered for sale his 1882, 12,000-square-foot (1,100 m ) limestone townhouse, located at 7 East 67th Street, Lenox Hill , Manhattan, but as of December 2009, the home was no longer listed. He had bought the residence from Seagram liquor heir Matthew Bronfman in 2007 for $ 33 million. Murphy later committed suicide by leaping to his death from
4850-399: The door to financial services conglomerates offering a mix of commercial banking, investment banking, insurance underwriting, and brokerage. Joe J. Plumeri worked on the post-merger integration of the two companies and was appointed CEO of Citibank North America by Weill and Reed. He oversaw its network of 450 branches . J. Paul Newsome, an analyst with CIBC Oppenheimer , said: "He's not
4947-559: The emergency aid in full and the U.S. government had made a $ 12 billion (~$ 16.4 billion in 2023) profit on its investment in the company. Government restrictions on pay and oversight of the senior management were removed after the U.S. government sold its remaining 27% stake in December 2010. On June 1, 2009, it was announced that Citigroup would be removed from the Dow Jones Industrial Average effective June 8, 2009, due to significant government ownership. Citigroup
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#17328587959095044-596: The emergency government aid was repaid in full. The U.S. government also gained control of half the seats in the board of directors, and the senior management was subjected to removal by the US government if there were poor performance. By December 2009, the U.S. government stake was reduced from a 36% stake to a 27% stake, after Citigroup sold $ 21 billion of common shares and equity in the largest single share sale in U.S. history, surpassing Bank of America's $ 19 billion share sale 1 month prior. By December 2010, Citigroup repaid
5141-588: The firm and helped funnel money into Madoff's fund: Three of Noel's sons-in-law eventually became partners, promoting the firm's funds in their home countries and other regions, and funneled money into Bernie Madoff's funds. Piedrahita was named a Fairfield founding partner in 2007; he owns 22 percent and became one of the firm's dominant representatives of European and Latin American banking and investment. Della Schiava helmed Noel funds in Madrid and Lugano, Switzerland. Toub
5238-630: The first $ 29 billion in losses. The Treasury would assume the first $ 5 billion in losses; the FDIC would absorb the next $ 10 billion; then the Federal Reserve would assume the rest of the risk. The assets remained on Citigroup's balance sheet; the technical term for this arrangement is ring fencing . In return, the bank gave the U.S. Treasury $ 27 billion of preferred shares and warrants to acquire common stock . The government obtained wide powers over banking operations. Citigroup agreed to try to modify mortgages, using standards set up by
5335-462: The form of collateralized debt obligation (CDOs), compounded by poor risk management, led Citigroup into trouble as the subprime mortgage crisis worsened in 2007. The company had used elaborate mathematical risk models which looked at mortgages in particular geographical areas, but never included the possibility of a national housing downturn or the prospect that millions of mortgage holders would default on their mortgages. Trading head Thomas Maheras
5432-866: The fund's assets. One of the largest of the world's sovereign wealth funds , its assets were estimated in early 2008 to be approaching $ 700 billion. In August 2008, JPMorgan Chase pulled $ 250 million from this Madoff feeder fund account. Chase had become "concerned about lack of transparency", and had performed due diligence which had "raised doubts" about Madoff's operation. The firm set up feeder programs with such banks as Banco Santander , SA private banking unit, Banif , Swedish Bank Nordea , Zurich -based NPB Neue Privat Bank, Banque Bénédict Hentsch & Cie [ fr ] of Geneva , all conduits of fresh money to Madoff which extended his global reach. Fairfield's fee arrangement earned them approximately $ 400 million from 2005 to 2008. The firm charged clients larger fees than most similar firms did, including
5529-451: The fund's risk and investment adviser and their actions and inactions constitute gross negligence." The lawsuit alleged breach of fiduciary duty, and unjust enrichment . It was "the largest victim of the fraud perpetrated by Bernard L. Madoff", losing $ 7 billion. The defendants include founders Noel and Tucker and other fund partners who the plaintiffs alleged "failed to fulfill their contractual obligations to use best efforts to supervise
5626-887: The government aid provided to Citi in 2008/2009 was provided to prevent a worldwide chaos and panic by the potential collapse of its Global Transactions Services (now TTS) division. According to the article, former CEO Pandit said if Citigroup was allowed to unravel into bankruptcy, "100 governments around the world would be trying to figure out how to pay their employees". According to New York Attorney General Andrew Cuomo , Citigroup paid hundreds of millions of dollars in bonuses to more than 1,038 of its employees after it had received its $ 45 billion (~$ 62.5 billion in 2023) TARP funds in late 2008. This included 738 employees each receiving $ 1 million in bonuses, 176 employees each receiving $ 2 million bonuses, 124 each receiving $ 3 million in bonuses, and 143 each receiving bonuses of $ 4 million to more than $ 10 million. As
5723-547: The government to back about $ 306 billion in loans and securities and directly invest about $ 20 billion in the company. The Treasury provided $ 20 billion in Troubled Asset Relief Program (TARP) funds in addition to $ 25 billion given in October. The Treasury Department, the Federal Reserve and the FDIC agreed to cover 90% of the losses on Citigroup's $ 335 billion portfolio after Citigroup absorbed
5820-481: The investigation, Bowen's charges were ignored, even though withholding such information from shareholders violated the Sarbanes–Oxley Act (SOX), which he had pointed out. Citigroup CEO Charles Prince signed a certification that the bank was in compliance with SOX despite Bowen revealing this wasn't so. Citigroup eventually stripped Bowen of most of his responsibilities and informed him that his physical presence
5917-399: The largest commercial bank in the world in 1929. As it grew, the bank became an innovator in financial services, becoming the first major U.S. bank to offer compound interest on savings (1921); unsecured personal loans (1928); customer checking accounts (1936) and the negotiable certificate of deposit (1961). The bank merged with First National Bank of New York in 1955, becoming
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#17328587959096014-415: The lawsuit in spite of Fairfield Greenwich's offer to repay all Massachusetts investors, and said he was going to force Fairfield to explain e-mails and other evidence that appear to show company officials knew about potential problems with Madoff but failed to disclose them to clients. However, the action was settled on September 8, 2009. Fairfield Greenwich neither admitted nor denied wrongdoing, accepted
6111-523: The life insurance and annuities underwriting businesses until it sold them to MetLife in 2005. In spite of divesting Travelers Insurance, Citigroup retained Travelers' signature red umbrella logo as its own until February 2007, when Citigroup agreed to sell the logo back to St. Paul Travelers, which renamed itself Travelers Companies . Citigroup also decided to adopt the corporate brand "Citi" for itself and virtually all its subsidiaries, except Primerica and Banamex. Heavy exposure to troubled mortgages in
6208-648: The main whistleblower in the Madoff scandal, for instance, wondered why Madoff would leave money "on the table", which was usually unheard of on Wall Street. Hedge fund manager Suzanne Murphy believed that Noel and other Fairfield executives should have wondered why Madoff wasn't charging them anything when "all they were doing was collecting the money." Massachusetts regulators alleged that in 2007 Tucker earned more than $ 30 million in fees from Madoff. There were numerous other red flags , but Fairfield Greenwich chose to ignore them. Even in down markets, Madoff helped Fairfield earn steady returns. In his third submission to
6305-497: The merger of Smith Barney with Morgan Stanley Wealth Management . Citi received $ 2.7 billion and a 49% interest in the joint venture. In June 2013, Citi sold its remaining 49% stake in Smith Barney to Morgan Stanley Wealth Management for $ 13.5 billion following an appraisal by Perella Weinberg. In 2010, Citigroup achieved its first profitable year since 2007. It reported $ 10.6 billion in net profit, compared with
6402-787: The money may already be in the hands of Fairfield's own clients, who are likely off-limits to Picard, since they weren't direct investors with Madoff. On May 29, 2009, Fairfield Sentry, based in the British Virgin Islands , filed a complaint in New York State Supreme Court in Manhattan seeking to recover more than $ 919 million in investment management and performance fees that it paid to Fairfield, based upon "inflated net asset value reports of its investments with Bernard L. Madoff Investment Securities LLC ... The Fairfield entity defendants recklessly disregarded their duties as
6499-487: The new corporate logo, which was used until 2007. The chairmen of both parent companies, John S. Reed and Sandy Weill respectively, were announced as co-chairmen and co-CEOs of the new company, Citigroup, Inc., although the vast difference in management styles between the two immediately presented question marks over the wisdom of such a setup. The remaining provisions of the Glass–Steagall Act —enacted following
6596-434: The new fund and/or withdrew from any existing funds. Fairfield Greenwich was a defendant in a class action seeking to recoup losses resulting from Fairfield Greenwich funds' investments with Bernard L. Madoff Investment Securities. The class action was a result of the consolidation of multiple cases filed in federal and state court against Fairfield Greenwich. On September 29, 2009, a second amended consolidated complaint
6693-453: The operations" of Madoff-related investments and to "oversee the day-to-day investment activities of the fund". The case was Fairfield Sentry Ltd. v. Fairfield Greenwich Group , 601687/2009, New York State Supreme Court (Manhattan). On July 20, 2009, Justice Edward Alexander Bannister granted the request to liquidate the Fairfield Sentry funds, worth more than $ 7.2 billion in December 2008, now less than $ 70 million, incorporated in 1990 under
6790-458: The period from 2002 to Madoff's arrest in December 2008. $ 1.2 billion was withdrawn in the final three months of the fraud. Since 1995, the Fairfield funds invested about $ 4.5 billion with Bernard L. Madoff Investment Securities LLC, or BLMIS, through 242 wire transfers . The funds were Fairfield Sentry Ltd., Greenwich Sentry LP, and Greenwich Sentry Partners LP. However, it was conjectured that
6887-403: The possibility of trouble with its CDOs was so tiny (less than 1/100 of 1%) that they excluded them from their risk analysis. With the crisis worsening, Citigroup announced on January 7, 2008, that it was considering cutting another 5 percent to 10 percent of its 327,000 member-workforce. In 2007, Citigroup acquired 61% of Nikko Asset Management for $ 7.7 billion to take majority control in what
6984-469: The product of over-hedging. In June 2008, a financial consultant noticed that even with the market as a whole trending downward, Madoff was on the winning side of every trade. He didn't think this was possible even for a trader of Madoff's ability, and suggested that Fairfield Greenwich officials find out who was trading with Madoff and make sure he was actually holding the assets he claimed to hold. However, no one did so. As early as 2005, Fairfield Greenwich
7081-740: The spit-and-polish executive many people expected. He's rough on the edges. But Citibank knows the bank as an institution is in trouble—it can't get away anymore with passive selling—and Plumeri has all the passion to throw a glass of cold water on the bank." Plumeri boosted the unit's earnings from $ 108 million to $ 415 million in one year, an increase of nearly 300%. He unexpectedly retired from Citibank in January 2000. In 2000, Citigroup acquired Associates First Capital Corporation for $ 31.1 billion in stock, which, until 1989, had been owned by Gulf+Western (now part of National Amusements ), and later by Ford Motor Credit Company . The Associates
7178-526: The time of the merger, was a diverse group of financial concerns that had been brought together under CEO Sandy Weill . Its roots came from Commercial Credit, a subsidiary of Control Data Corporation that was taken private by Weill in November 1986 after taking charge of the company earlier that year. Two years later, Weill mastered the buyout of Primerica Financial Services —a conglomerate that had already bought life insurance company A L Williams as well as brokerage firm Smith Barney . The new company took
7275-477: The title FGG . If an internal link led you here, you may wish to change the link to point directly to the intended article. Retrieved from " https://en.wikipedia.org/w/index.php?title=FGG&oldid=1213997235 " Category : Disambiguation pages Hidden categories: Short description is different from Wikidata All article disambiguation pages All disambiguation pages Fairfield Greenwich Group Fairfield Greenwich Group
7372-419: Was Fairfield's signature fund, one of several feeder funds through which money from wealthy foreign investors could capitalize on Madoff's supposed investment acumen. Its marketing prospectus promised low volatility and steady returns, and boasted an 11 percent annual return over the prior 15 years, with only 13 losing months, a record that grew increasingly desirable over recent years of volatility. The fund
7469-651: Was Jeffrey Tucker, who had worked as a lawyer in the enforcement division of the Securities and Exchange Commission . Both Noel and Tucker are semi-retired. Fairfield offered feeder funds of single-strategy trading managers. Fairfield also started several fund of funds , each investing in a basket of hedge funds , though the offering of feeder funds has been the primary business of Fairfield. It described its investigation of investment options as "deeper and broader" than competitive firms, because of Tucker's regulatory experience. Fairfield Greenwich's website says it "employs
7566-522: Was aware that Madoff was being audited by an accounting firm with only one full-time accountant. As recently as December 11, 2008, the day Madoff was taken into federal custody, Madoff was working with Fairfield Greenwich to raise money for new funds, which promised about a 16% return, using more leverage than the 3–1 ratios he claimed he used in existing funds. It was reported by one client that Fairfield warned investors they would be excluded from any future Madoff product if they declined to participate in
7663-416: Was backed by loans from banks including Banco Bilbao Vizcaya Argentaria and Nomura Holdings , which invested about $ 304 million. The Mugrabis, extremely wealthy art collectors from Colombia who have lived in New York for more than 20 years, and long-time friends of Piedrahita (a Colombian who had married Noel's eldest daughter, Corina), were investors. "We had very little money with the fund — just under
7760-543: Was close friends with senior risk officer David Bushnell, which undermined risk oversight. As Treasury Secretary, Robert Rubin was said to be influential in lifting the Glass–Steagall Act that allowed Travelers and Citicorp to merge in 1998. Then on the board of directors of Citigroup, Rubin and Charles Prince were said to be influential in pushing the company towards MBS and CDOs in the subprime mortgage market. Starting in June 2006, Senior Vice President Richard M. Bowen III ,
7857-696: Was created in the wake of the financial crisis as part of Citi's restructuring plan. It consists of several business entities including remaining interests in local consumer lending such as OneMain Financial, divestitures such as Smith Barney, and a special asset pool. Citi Holdings represents $ 156 billion of GAAP assets, or ~8% of Citigroup; 59% represents North American mortgages, 18% operating businesses, 13% special asset pool, and 10% categorized as other. Operating businesses include OneMain Financial ($ 10B), PrimeRe ($ 7B), MSSB JV ($ 8B) and Spain / Greece retail ($ 4B), less associated loan loss reserves. While Citi Holdings
7954-420: Was described as struggling, and by November they were insolvent, despite their receipt of $ 25 billion (~$ 34.7 billion in 2023) in taxpayer-funded federal Troubled Asset Relief Program funds. On November 17, 2008, Citigroup announced plans for about 52,000 new job cuts, on top of 23,000 cuts already made during 2008 in a huge job cull resulting from four-quarters of consecutive losses and reports that it
8051-1081: Was designed to stop corporate raiders from using loss corporations to evade taxes and was never intended to address the unprecedented situation where the government owned shares in banks. And it was certainly not written to prevent the government from selling its shares for a profit." In 2011, Citi was the first bank to introduce digitized Smart Banking branches in Washington, D.C., New York, Tokyo and Busan (South Korea) while it continued renovating its entire branch network. New sales and service centers were also opened in Moscow and St. Petersburg. Citi Express modules, 24-hour service units, were introduced in Colombia. Citi opened additional branches in China, expanding its branch presence to 13 cities in China. Citi Branded Cards introduced several new products in 2011, including: Citi ThankYou, Citi Executive/ AAdvantage and Citi Simplicity cards in
8148-660: Was filed. The complaint also named as defendants the placement agent for the funds; Citco , the fund administrator and sub-custodian of the funds which calculated the net asset value (NAV) of the funds; and PricewaterhouseCoopers , the auditor of the funds. The complaint alleged fraud, violations of Rule 10b-5 , violations of Section 20(a), negligent misrepresentation, gross negligence , breach of fiduciary duty , third-party beneficiary breach of contract, constructive trust , mutual mistake, negligence, negligent misrepresentation, aiding and abetting breach of fiduciary duty, aiding and abetting fraud, and unjust enrichment . In
8245-408: Was focused on fixed-income and institutional clients, whereas Smith Barney was strong in equities and retail. Salomon Brothers absorbed Smith Barney into the new securities unit termed Salomon Smith Barney; a year later, the division incorporated Citicorp's former securities operations as well. The Salomon Smith Barney name was abandoned in October 2003 after a series of financial scandals that tarnished
8342-483: Was formed in 1998 by the merger of Citicorp, the bank holding company for Citibank , and Travelers ; Travelers was spun off from the company in 2002. Citigroup is the third-largest banking institution in the United States by assets; alongside JPMorgan Chase , Bank of America , and Wells Fargo , it is one of the Big Four banking institutions of the United States. It is considered a systemically important bank by
8439-480: Was found. Subsequently, Fairfield Greenwich formally disclosed Madoff's role – and in the process raised about $ 1.7 billion from investors in the US and Europe. During the summer of 2007, several private equity firms were discussing taking a large investment in the firm, but Madoff ended any potential deal by refusing to grant the potential investors access for due diligence . By 2008, the firm had 48 percent of its capital tied to Madoff. Noel and Tucker created
8536-421: Was headed by Weill until 1985 —and merged it with Smith Barney. In November 1997, Travelers Group (which had been renamed again in April 1995 when they merged with Aetna Property and Casualty, Inc.), acquired Salomon Brothers , a major bond dealer and bulge bracket investment bank , in a $ 9 billion (~$ 15.9 billion in 2023) transaction. This deal complemented Travelers/ Smith Barney well as Salomon
8633-455: Was never served with the complaint. The principals were all involved in a lawsuit filed by the town of Fairfield 's pension funds . The pension fund case was Retirement Program for Employees of the Town of Fairfield v. Madoff , FBT-CV-09-5023735-S, Superior Court of Connecticut (Bridgeport). On May 18, 2009, Irving Picard sued Fairfield Greenwich Group seeking the return of $ 3.2 billion covering
8730-639: Was no longer required at the bank. The Financial Crisis Inquiry Commission asked him to testify about Citigroup's role in the mortgage crisis, and he did so, appearing as one of the first witnesses before the Commission in April 2010. As the crisis began to unfold, Citigroup announced on April 11, 2007, that it would eliminate 17,000 jobs, or about 5% of its workforce, in a broad restructuring designed to cut costs and bolster its long underperforming stock. Even after securities and brokerage firm Bear Stearns ran into serious trouble in summer 2007, Citigroup decided
8827-514: Was prompted by the insurance unit's drag on Citigroup stock price because Travelers earnings were more seasonal and vulnerable to large disasters and events such as the September 11 attacks . It was also difficult to sell insurance directly to its customers since most customers were accustomed to purchasing insurance through a broker. Travelers merged with The St. Paul Companies Inc. in 2004 forming The St. Paul Travelers Companies. Citigroup retained
8924-426: Was replaced as head of CitiMortgage with Jane Fraser , former head of Citi Private Bank. The company failed the stress tests again in 2014, this time due to qualitative concerns. However, it passed the stress tests in 2015 and in 2016. In February 2016, the company was subject to a $ 1.1 billion fraud lawsuit filed by lender Rabobank and other investors as a result of the bankruptcy of Oceanografia SA,
9021-419: Was replaced by Travelers Co. Smith Barney, Citi's global private wealth management unit, provided brokerage, investment banking and asset management services to corporations, governments and individuals around the world. With over 800 offices worldwide, Smith Barney held 9.6 million domestic client accounts, representing $ 1.562 trillion in client assets worldwide. On January 13, 2009, Citi announced
9118-674: Was the "agent" for the Abu Dhabi Investment Authority , the Safra National Bank of New York , and the National Bank of Kuwait . Monica Noel's niece, Bianca Haegler, a well-known Brazilian socialite, and her father, Alex, reportedly steered Brazilian investors to the firm, as did her cousin Jorge Paulo Lemann , Brazil's richest financier, co-owner of InBev , Budweiser 's parent company. Jeffrey Tucker also had
9215-403: Was then the largest foreign buyout ever of a Japanese company. Citigroup attempted to buy out the remaining shares of Nikko later that year at a cost of $ 4.6 billion to take full control of the company. Two years later, Citigroup sold its stake to Sumitomo Trust and Banking Co, a subsidiary of Sumitomo Mitsui Trust Holdings , for $ 795 million as it retreated from Japan. By July 2008 Citigroup
9312-448: Was unlikely to be in profit again before 2010. The same day on Wall Street markets responded, with shares falling and dropping the company's market capitalization to $ 6 billion, down from $ 300 billion two years prior. Eventually staff cuts totaled over 100,000 employees. Its stock market value dropped to $ 20.5 billion, down from $ 244 billion two years earlier. Shares of Citigroup common stock traded well below $ 1.00 on
9409-786: Was widely criticized for predatory lending practices and Citi eventually settled with the Federal Trade Commission by agreeing to pay $ 240 million to customers who had been victims of a variety of predatory practices, including "flipping" mortgages, "packing" mortgages with optional credit insurance, and deceptive marketing practices. In 2001, Citigroup made additional acquisitions: European American Bank , in July, for $ 1.9 billion, and Banamex in August, for $ 12.5 billion. The company spun off its Travelers Property and Casualty insurance underwriting business in 2002. The spin-off
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