Failing to Meet Expectations
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Citigroup (NYSE:C) has incurred a hefty $135.6 million penalty due to its inability to sufficiently address deficiencies related to data quality management, according to statements from the Federal Reserve Board and the Office of the Comptroller of the Currency released on Wednesday.
Despite having been subject to consent orders from 2020, Citigroup failed to implement essential controls to mitigate its ongoing risks, as highlighted by the Federal Reserve.
The Federal Reserve imposed a fine of $60.6 million on Citigroup, while the Office of the Comptroller of the Currency levied a $75 million civil penalty.
Evolving Challenges
Acting Comptroller of the Currency Michael J. Hsu remarked, “While the bank’s leadership has demonstrated significant overall progress, including streamlining operations, persistent weaknesses persist, particularly in the realm of data management.”
Citigroup’s CEO, Jane Fraser, acknowledged the firm’s shortcomings, stating, “Despite our advancements in simplification and compliance with our consent orders, there are areas where progress has been lacking, specifically in the domain of data quality management.”
Fraser further emphasized the company’s intensified dedication and increased investment in these areas over recent months, affirming, “We remain resolute in allocating the resources needed to rectify our regulatory commitments, as evidenced by our agreement with the OCC.”
Market Reaction
The repercussions were immediate, with Citigroup’s stock tumbling by 1.5% during Wednesday’s after-hours trading.
