Citigroup’s Regulatory Woes Continue

The U.S. Federal Reserve has prohibited Citigroup from engaging in acquisitions until it puts its regulatory house in order. The timing of the Fed’s action is intended to maximize pressure on CEO Charles Prince to execute a previously announced strategy to step up its compliance efforts and improve ethics training throughout the organization.

Citigroup has had several major brushes with financial-services regulatory authorities, in several jurisdictions, over the last year. The most significant of these to date arose in Japan, where regulators forced Citigroup to shut down its private banking functions completely. The firm subsequently fired the executives involved.