Ex-Citigroup Employee Claims the Bank Fired Him for Refusing to Feed False Data to Regulators

Kathleen Martin, a former managing director at Citigroup Bank, recently filed a lawsuit against her former employer. The suit, targeting not only Citigroup but also its COO, accuses them of unlawful termination, which came after Martin refused to provide regulators with false information.

Lawsuit Claims Martin Was Ordered To Lie To The OCC

Kathleen Martin has been with Citigroup since 2021, after which she spent two years as a managing director, only to be fired in September 2023. She alleges that she lost her job due to her complaints against the bank’s officials.

After losing her job, she filed a lawsuit against the company in the New York district federal court, claiming that COO Anand Selva instructed her to hide critical information from the Office of the Comptroller of the Currency (OCC).

The alleged crucial information was tied to Citi’s data governance metrics, and Martin alleges that surrendering the real data to the OCC would make the bank “look bad.” To prevent this, Selva allegedly insisted that this information must not be shared with the authorities.

The metrics that Martin was supposedly told to falsify refer to a 2020 consent order issued by the OCC. At the time, the Office of the Comptroller of the Currency ordered Citigroup to address certain deficiencies in its risk management and data governance controls.

The lawsuit implies that these changes were never made, and when the OCC requested an update on the matter, Selva wanted to falsify the data to make it appear like the bank addressed the issue and resolved the problems.

Commenting on the matter, Martin’s attorney claims that she acted in the long-term interest of the bank, demanding that the court reinstate her and her pay, with certain bonuses. However, Citigroup’s spokesperson responded to the allegations by saying that the lawsuit is without claim.

The bank fully intends to defend against it, and for the time being, it refuses to settle.

Martin Might Have Difficulties Proving Her Claims

As mentioned, Martin was hired in 2021, which was after the regulator fined Citi $400 million a year before. The penalty came due to a pattern of misconduct in the bank’s data governance practices. If Martin’s allegations are true, the bank will never change its behavior and practices, which could result in even greater penalties if she manages to win the case.

However, it is also worth noting that Selva did not become the bank’s COO until 2023. While he was not in a position when the bank was originally fined, Martin insists that he started pressuring her to lie to regulators about Citi meeting certain metrics when he was promoted. Meanwhile, Martin herself was hired to revamp the bank’s data processes and help it avoid further legal jeopardy.

The lawsuit explains: “The more Martin pushed back against this unlawful activity, the worse things got.” Eventually, the situation escalated, and she lost her job on September 25, 2023. On the other hand, the timing of her departure may make it difficult to confirm the bank’s motivation, as it launched a wide-scale reorganization during the same month. The move reduced its workforce by 7,000 employees over the next few months.

This makes it seem like a disgruntled employee’s frustration with losing her job. However, there is the fact that Citi’s internal documents show that CEO Jane Fraser praised Martin’s performance, stating that she exceeded expectations and is building strong relationships at the bank.