Friday, December 12, 2008

RUBIN NAMED IN SUIT ALLEGING CITIGROUP PONZI SCHEME

Paul Tharp, NY Post - A new Citigroup scandal is engulfing Robert Rubin and his former disciple Chuck Prince for their roles in an alleged Ponzi-style scheme that's now choking world banking.

Director Rubin and ousted CEO Prince - and their lieutenants over the past five years - are named in a federal lawsuit for an alleged complex cover-up of toxic securities that spread across the globe, wiping out trillions of dollars in their destructive paths.

Investor-plaintiffs in the suit accuse Citi management of overseeing the repackaging of unmarketable collateralized debt obligations that no one wanted - and then reselling them to Citi and hiding the poisonous exposure off the books in shell entities.

The lawsuit said that when the bottom fell out of the shaky assets in the past year, Citi's stock collapsed, wiping out more than $122 billion of shareholder value.

However, Rubin and other top insiders were able to keep Citi shares afloat until they could cash out more than $150 million for themselves in "suspicious" stock sales "calculated to maximize the personal benefits from undisclosed inside information," the lawsuit said.

The latest troubles for Rubin, Prince and others emerged in a 500-page investigation by Citigroup investors represented by law firm Kirby McInerney. . .

Rubin cleared $30.6 million on his stock sales, while Prince got $26.5 million, former COO Robert Druskin got nearly $32 million and former Global Wealth Management unit chief Todd Thomson got $25.7 million, the suit said.

Citi denied the allegations and said it "will defend against it vigorously."

3 Comments:

At December 12, 2008 12:56 PM, Anonymous Anonymous said...

I can't possibly guess why the Bush Justice Dept. didn't investigate and prosecute this case. I guess the FBI was too busy knocking down doors and terrorising innocent families of low level fugitive drug dealers. Asking the Feds to oversee finance and protect investors would be expecting a madam to warn her clients that one of her whores had an std.

 
At December 13, 2008 12:55 PM, Anonymous Mairead said...

I oppose the death penalty for almost all crimes in almost all circumstances, but I think I might make an exception in the case of people who are in positions of enormous trust, power, and responsibility who abuse those positions for their personal gain.

In his excellent Going Postal, Terry Pratchett introduces the concept of fractional deaths - the idea that even non-violent criminals can be assigned responsibility for deaths even if no individual dies as a direct result of their crimes. A thief (for example) who steals the cumulative value of a lifetime's earnings from a large number of people is in some sense guilty of a killing. He hasn't killed any individual, but he has diminished the lives of many.

It seems like a good concept. The corporate malefactors who take the life savings of thousands of people should go to prison as though for several counts of first-degree murder.

 
At January 4, 2009 10:52 PM, Anonymous Anonymous said...

Citi is now the government...all the crooks can now work together....the people wanted change, and now they have it! The ponzi scheme of all ponzi schemes....AMEN.

 

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