NEW YORK, Sept. 30 -- When Citigroup Inc. chief executive Charles O. Prince III learned of allegations that the firm's private bankers in Japan had violated anti-money-laundering laws and overcharged customers, he could not believe his ears.
"I have trouble understanding how people can do things like that and tarnish the reputation of this great institution," Prince said in an interview in his Park Avenue office on Thursday. "I feel like saying, 'How could you possibly have done that? What were you thinking when you did that? Don't you realize what you are doing here?' "
Charles O. Prince III is Citigroup chief executive.
(File Photo)
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What the bankers were doing, before regulators shut them down, was making Prince's already tough job that much tougher.
When he took over as chief executive a year ago, Prince accepted a massive challenge: restoring the reputation and transform the results-at-any cost culture of the world's largest financial firm, a global superpower with $1.4 trillion in assets and operations in 102 countries.
So far, it has been a rough ride.
In the past few weeks, regulators shuttered Citigroup's Japanese private bank, and British authorities began investigating a massive bond trade in London that netted the firm a nice profit but violated the unwritten rules of fair play.
The flame-ups caused a high-profile Wall Street analyst to downgrade Citigroup's stock last week and rekindled a few long-simmering questions:
• Can Prince reshape the bank's culture while continuing to atone for bull-market sins committed before his watch -- including Citigroup's involvement with Enron Corp. and WorldCom Inc. and the scandal over tainted stock research?
• Can a firm of Citigroup's size ever hope to stay out of trouble while continuing to produce a steady stream of dazzling results that are the envy of Wall Street?
• Is Citigroup, as Sanford C. Bernstein & Co. analyst Howard K. Mason asked, "too big to control?"
