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Citigroup is shifting responsibility for a key piece of its compliance work and around 800 employees from chief operating officer Anand Selva, after the bank was fined $136mn by regulators this summer for reporting failures.
Tim Ryan, the former accountant and top PwC partner who joined Citi in June, will head the data overhaul at the heart of the bank’s efforts to satisfy regulators that its compliance systems are up to scratch, according to four people familiar with the changes.
The move makes Ryan, the bank’s chief technology officer, the third senior Citi executive in three years to oversee the task of fixing the bank’s persistent data problems.
Citi is expected to announce the changes to employees as early as Monday morning.
The bank will also name a new top data officer to replace Japan Mehta, who reported to Selva. Ashutosh Nawani will instead report to Ryan.
Selva will remain head of the bank’s larger effort to improve risk controls and continue to head the bank’s back-office operations.
The decision to move responsibilities to Ryan from Selva was made last week during a series of meetings chief executive Jane Fraser held with bank executives and board members.
The shift is seen as an acknowledgment that Selva has been stretched too thin and that adding another executive to the effort would speed up the overhaul, according to a person close to the bank.
The change in responsibilities is a nevertheless a blow to Selva, a 33-year Citi veteran and one of the bank’s most senior executives. Selva ran Citi’s consumer business and was promoted to chief operating officer in March last year.
Earlier this year, Selva was sued along with the bank by a former staffer, Kathleen Martin, who claims she was instructed by the executive to lie to regulators.
Martin alleges she was fired after instead telling regulators that the bank was behind schedule in fixing its issues.
Citi, which is fighting the lawsuit, said Martin was fired legitimately for performance issues. A spokesperson for Selva declined to comment.
Citi has added tens of thousands of employees in recent years as it seeks to close gaps in its risk management and data controls.
The bank was fined $136mn in June in large part for inaccurately reporting to regulators the details of tens of billions of dollars of loans.
Following the fine — which specifically mentioned Citi’s data issues — Fraser pledged to commit more resources to improving data controls.
Citi has been engaged in a company-wide effort to improve risk controls since it mistakenly sent $900mn to creditors of cosmetics company Revlon, an error that resulted in the ousting of the bank’s then-chief executive Michael Corbat and the imposition of a regulatory consent order requiring it to fix the issues.
Selva assumed responsibility for fixing Citi’s compliance issues and satisfying the consent order from Karen Peetz, a veteran bank executive who left last year.
At the time, Fraser said Selva was a “highly disciplined operator who delivers results”.
However, the bank failed an inspection by the Federal Reserve in September last year. In May, the bank was fined £62mn for failing to catch a $1.4bn trading error that briefly shook European markets.
In June, banking regulators rejected Citi’s so-called living will — a detailed plan to wind itself down in the event of catastrophic failure, also citing data issues. The following month it was hit with the $136mn fine.
Fraser has said that fixing the bank’s risk controls and satisfying regulators is one of the areas in which the bank has come up short under her leadership. She has pledged changes and previously said the bank would redouble its efforts.
Citi declined to comment.
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