Citigroup
Whereas, our company agreed to settle an SEC fraud charge over a mortgage-bond deal (Class V Funding III) which cost our company and its investors more than $700 million,
Whereas, our company agreed to pay shareholders $590 million to settle class action lawsuits tied to claims that the bank understated its exposure to unremarketable CDO securities, and settled similar SEC allegations for a $75 million penalty,
Whereas, in March 2013, our bank agreed to pay another $730 million to settle claims it misled investors in four dozen bond and preferred stock offerings over more than two years in which the bank raised $71 billion,
Whereas, our company in July 2014 agreed to pay $7 billion, the largest civil fraud penalty ever levied by the U.S. Department of Justice, to settle an ongoing investigation into Citigroup’s mortgage securitization programs,
Whereas, our company continues to set aside millions of dollars to handle additional litigation expenses,
Whereas, our bank continues to respond to international charges including allegations of foreign exchange market and LIBOR manipulation, money laundering in Mexico, India, Africa and Japan, and price fixing in the United Kingdom,
Whereas, the Final Report of the National Commission on the Causes of the Financial Crisis in the United States in January 2011 stated that one of the causes of the crisis was “. . . a systemic breakdown in accountability and ethics,”
Whereas, the proponent believes there is overwhelming evidence, post-financial crisis, that shareholders and our economy face greater long-term downside risk from profit-making activities of Citigroup than do our top officers and directors,
Whereas, the proponent believes that the problem of moral hazard occurs where directors and managers are more likely to take actions with greater risk to society because the directors and managers do not face proportionate downside risks compared with the risks to society and to stakeholders. While the financial crisis resulted in financial penalties and legislative efforts, there may remain systemic risk posed by our company that has not been addressed,
Therefore, be it resolved, the shareholders request that the board of directors issue a report on moral hazard as it relates to Citigroup, assessing whether current company policies and procedures, above and beyond legal compliance practices, are adequate to prevent management and the board from making business decisions maximizing short-term profits by externalizing long-term financial risks to the U.S. economy. Such report should also explore potential policy options to trigger a special internal oversight and decision-making process in the event the board or management becomes aware of circumstances in which our company’s activities, regardless of their lawfulness, may pose systemic risk, or create the potential for another major financial crisis. The report may be prepared at reasonable expense and exclude proprietary or legally prejudicial information.