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Citigroup (C) Fined $25.9M for Armenian American Discrimination
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Citigroup Inc. (C - Free Report) will pay $25.9 million in fines and remedies for intentionally discriminating against Armenian Americans when they applied for credit cards, per the Consumer Financial Protection Bureau (“CFPB”).
The CFPB found that Citigroup employees were trained to avoid approving applications of Armenian Americans as they were more likely to commit fraud. Employees referred to applicants as “bad guys” or as affiliated with organized crime.
Moreover, bank employees were told to avoid approving applicants with last names ending in “yan” or "ian" — common suffixes to Armenian last names. Applications originating in Glendale, CA, where a notable portion of the country's Armenian-American population lives, were also avoided.
Beside this, Citigroup employees hid the real reason why those applications were denied and kept any decisions off the record despite knowing that it was against the bank laws to discriminate against national origin.
“Citi stereotyped Armenians as prone to crime and fraud. In reality, Citi illegally fabricated documents to cover up its discrimination,” remarked Rohit Chopra, the director of the CFPB.
Hence, due to this discrimination, Citigroup will pay $24.5 million in fines and $1.4 million in remedies to affected customers.
Citigroup argued that employees were attempting to stop potential fraud due to a “well-documented Armenian fraud ring operating in certain parts of California" that resulted in individuals running up credit card debts and leaving the country.
However, the bureau said that these Citigroup employees used identifiable information that discriminated against Armenian Americans in general.
Per Citigroup, “Following an internal investigation, we have taken appropriate actions with those directly involved in this matter and we promptly put in place measures to prevent any recurrence of such conduct.”
Over the past six months, shares of Citigroup have declined 9.8% against the industry’s rise of 4.6%.
Capital One Financial Corporation (COF - Free Report) faces a lawsuit from savers who claim that the bank used deceptive practices to make them think that they were earning the highest interest rate available from the company's online banking arm amid the increasing rate environment.
The plaintiffs claim that COF misleadingly and fraudulently created a new high-yield account rather than increasing the rates on its 360 Savings account. In the high interest rate environment, COF’s existing 360 Savings account customers, who were seeking juicier yields, were required to open a 360 Performance Savings account.
A few months ago, Goldman Sachs (GS - Free Report) agreed to pay $6 million to the Securities and Exchange Commission (“SEC”) for not providing complete and accurate information in the blue sheets, which contain information regarding securities trading and transactions that are provided to various regulatory authorities.
Per the SEC’s findings, GS made more than 22,000 inadequate blue sheet submissions between 2012 and 2022, comprising 43 different types of errors that affected more than 163 million transactions.
The SEC stated that GS did not have adequate processes that could verify the accuracy of its electronic blue sheet submissions. Moreover, per the SEC, Goldman knowingly violated the recordkeeping and reporting provisions of the federal securities laws.
Hence, GS agreed to pay the fine levied on it and has undertaken remedial actions to rectify and improve the reporting systems and controls of the blue sheet submissions.
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Citigroup (C) Fined $25.9M for Armenian American Discrimination
Citigroup Inc. (C - Free Report) will pay $25.9 million in fines and remedies for intentionally discriminating against Armenian Americans when they applied for credit cards, per the Consumer Financial Protection Bureau (“CFPB”).
The CFPB found that Citigroup employees were trained to avoid approving applications of Armenian Americans as they were more likely to commit fraud. Employees referred to applicants as “bad guys” or as affiliated with organized crime.
Moreover, bank employees were told to avoid approving applicants with last names ending in “yan” or "ian" — common suffixes to Armenian last names. Applications originating in Glendale, CA, where a notable portion of the country's Armenian-American population lives, were also avoided.
Beside this, Citigroup employees hid the real reason why those applications were denied and kept any decisions off the record despite knowing that it was against the bank laws to discriminate against national origin.
“Citi stereotyped Armenians as prone to crime and fraud. In reality, Citi illegally fabricated documents to cover up its discrimination,” remarked Rohit Chopra, the director of the CFPB.
Hence, due to this discrimination, Citigroup will pay $24.5 million in fines and $1.4 million in remedies to affected customers.
Citigroup argued that employees were attempting to stop potential fraud due to a “well-documented Armenian fraud ring operating in certain parts of California" that resulted in individuals running up credit card debts and leaving the country.
However, the bureau said that these Citigroup employees used identifiable information that discriminated against Armenian Americans in general.
Per Citigroup, “Following an internal investigation, we have taken appropriate actions with those directly involved in this matter and we promptly put in place measures to prevent any recurrence of such conduct.”
Over the past six months, shares of Citigroup have declined 9.8% against the industry’s rise of 4.6%.
Image Source: Zacks Investment Research
Currently, Citigroup carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Misconduct by Other Companies
Capital One Financial Corporation (COF - Free Report) faces a lawsuit from savers who claim that the bank used deceptive practices to make them think that they were earning the highest interest rate available from the company's online banking arm amid the increasing rate environment.
The plaintiffs claim that COF misleadingly and fraudulently created a new high-yield account rather than increasing the rates on its 360 Savings account. In the high interest rate environment, COF’s existing 360 Savings account customers, who were seeking juicier yields, were required to open a 360 Performance Savings account.
A few months ago, Goldman Sachs (GS - Free Report) agreed to pay $6 million to the Securities and Exchange Commission (“SEC”) for not providing complete and accurate information in the blue sheets, which contain information regarding securities trading and transactions that are provided to various regulatory authorities.
Per the SEC’s findings, GS made more than 22,000 inadequate blue sheet submissions between 2012 and 2022, comprising 43 different types of errors that affected more than 163 million transactions.
The SEC stated that GS did not have adequate processes that could verify the accuracy of its electronic blue sheet submissions. Moreover, per the SEC, Goldman knowingly violated the recordkeeping and reporting provisions of the federal securities laws.
Hence, GS agreed to pay the fine levied on it and has undertaken remedial actions to rectify and improve the reporting systems and controls of the blue sheet submissions.