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Morning Coffee: Mystery of the alleged Citigroup equities culture survey. Bonuses loosened in London, tightened in New York

Citigroup is making some effort to get to grips with the allegedly poor culture in its equities sales and trading business. Not only has the new good guy head of the whole markets business Andrew Morton sent a memo instructing people to speak up about harassment, but according to a new and expanded version of the complaint first brought against Citi last November by managing director (MD), Ardith Lindsey, the bank has also conducted a survey among women in the equities business to find out what it's really like. Lindsey says the survey took place in February 2024. She claims that, as yet, there have been no results. 

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What did the survey find? Citi didn't respond to a request to comment. The bank has denied all Lindsey's claims and indicated a willingness to defend itself against them in court. However, a spokesman also described abusive text messages sent to Lindsey by her former boss, with whom she was in a relationship she describes as abusive, as "vile." Subsequent to Lindsey's complaint, Bloomberg posted an article claiming that other employees had described a "pattern of harassment" in Citi's equities division. 

Reuters notes that Lindsey's new complaint claims that Citi should have done more to protect her from her former boss, whom she says was often intoxicated. It also mentions various other current and ex-senior Citi equities staff, whom Lindsey says perpetuated the unpleasant environment.

The February culture survey (if it exists) will presumably reveal whether Lindsey's experience at Citi was singular, or whether the issues she raises are pervasive. Lindsey is still employed by Citi and remains a managing director there. She's currently on medical leave and says she's been diagnosed with trauma after her experiences at the bank, which have led - among other things - to a 24 point drop in her formerly 95th percentile IQ. 

Separately, just as regulations are loosening around bonuses in London, they're tightening around bonuses in New York. 

The Wall Street Journal reports that moves are afoot in the US to make big banks defer more of their bonuses and to clawback a higher proportion of bonuses when things go wrong. This has been in process for a while - the rules are required by the 2010 Dodd-Frank financial law, but have never quite got off the ground. Last time they were mooted, in 2016, they would have required 50% deferrals for at least four years for senior staff, plus seven year bonus clawbacks. That didn't happen. It doesn't help that officials from six US agencies, including the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency, have to agree on the rules. But they're having another try. 

In London, on the other hand, bonuses are theoretically now free to be as high as banks like following the lifting of the bonus cap imposed by the European Union. The cap restricted bonuses to no more than twice salaries. In its absence, London bonuses are untethered from fixed pay. However, things aren't changing immediately. Bloomberg notes that banks like HSBC and Lloyds are proposing to lift the cap, but haven't done so yet. Barclays has left the cap in place, but wants permission to lift it in future, maybe. NatWest still has the cap, but is now paying bonuses that are up to two times salary, instead of one times salary when the cap was in place.

Meanwhile...

A Wells Fargo bond saleswoman is suing for discrimination after she says she had to wait nine years to be promoted from VP and all the big accounts went to men who thought she was earning a "second income" alongside her husband. (Yahoo) 

Citi’s share price rose by more than 50% between September and March. Jane Fraser may become the banker who turned it around. (Economist) 

UBS will roll out five waves of job cuts, starting in June as it lays off 50-60% of remaining Credit Suisse employees. (Financial News) 

Peel Hunt made the cuts we said were coming. (Bloomberg) 

Giacomo Ciampolini, head of Citigroup’s alternative capital markets business for Europe, the Middle East and Africa, is leaving. (Financial News) 

Goldman Sachs moved Dirk Lievens, head of Goldman’s financial institutions group for Europe, the Middle East and Africa, to Paris to be closer to continental European clients. (Financial Times) 

Kegan Greene and Rob Freiman, Jefferies' heads of fintech banking, have resigned. (Bloomberg) 

Barclays appointed Steven Pick as head of M&A for EMEA. (Barclays) 

UBS is opening an office from Menlo Park California. It's hired Sean Lynch from Barclays to work there. (Bloomberg) 

CVC co-founder Donald Mackenzie will net up to €150m in the IPO. (Financial Times) 

The New York Stock Exchange is polling market participants on the merits of trading stocks around the clock. (Financial Times) 

The ketamine consultants are coming. “It sounds very hippy-dippy—it does—but I really believe professional services firms these days have to be looking inwards to find an edge in problem solving.” (WSJ)  

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AUTHORSarah Butcher Global Editor

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