2. What is scam..?
A fraudulent scheme performed by a
dishonest individual, group, or company in an
attempt obtain money or something else of value.
3. Why the Scandals?
Blamed high tech boom
Meeting quarterly earnings
Stock options, greed and short-term price
manipulation
Historically, same result - speculative bubbles
followed by crashes
Fiascos, corruption, business failures follow
economic booms
4. Group or Global CEO Vikram Pandit
chairman William Rhodes
chief operating officer Douglas Peterson
chief financial officer John Gerspach
Citibank National Association
Citi never sleeps.
Type Public company
Founded 1812
Headquarters New York City, United States
Parent Citigroup
5. scam
Retail banking unit in Gurgaon
Rs 400 crore estimated fraud and forgery
Fraud - a handiwork(making things by hand,
considered as a subject of instruction).
Main Accused or culprit - Shivraj Puri
6. Scam explanation
The racket involved investments of high net worth
individuals (HNIs), who were given firm
commitments of monthly returns as high as 1.5-2.5
per cent, or 18-30 per cent annually. Fake fixed deposit
receipts were issued against these investments
Sanjay Puri, a relationship manager with Citibank's
Gurgaon branch, is accused of luring 40 high net-
worth individuals and corporate entities to invest in
bogus schemes by promising high returns, which he
falsely substantiated with a forged letter from market
regulator SEBI..
7. Scam cont.…
about 18 to 20 companies and 30 individuals had
invested money in Puri's accounts in the last 14
months. The investment ranged from Rs. 15 lakh and
above.
that Puri had initially even returned some of the
money at a 20% interest to win their trust.
8. Investors impact
Investors had lost around Rs. 250 crore after their
money was invested by Citibank fraudster.
The bank has decide to pay the money back to the
investor along with the interest made.
After this incident no investor has forwarded to invest
in bank
9. Government actions
Different I-T offices were involved in the probe to
ascertain the flow of money and check if taxes
have been evaded by these individuals by way of
non-reporting the funds that they put in the
"investment scheme“.
Gurgaon Police has hired a Chartered Accountant
firm hired to help crack the Rs. 460 crore fraud at a
Citibank branch.
10. Wealth Management Lessons From
Citibank’s Case
If your wealth manager comes to you with an investment
which has unusually high rewards, don’t get carried away.
Use your common sense on how those returns will be
achieved. If you’re told an investment proposal is endorsed
by SEBI, question why a markets regulator would endorse an
investment proposal?
Where possible, ask for third-party research on potential
investments.
