[DEBATE] : Citigroup Executives Gain $2.2 Million in Stock Bets (Update1)
riaz.tayob at gmail.com
Thu Mar 12 15:56:56 GMT 2009
[still able to benefit while Rome burns...]
Citigroup Executives Gain $2.2 Million in Stock Bets
By David Scheer
March 12 (Bloomberg) -- Four Citigroup Inc. executives who bought the
bank's stock last week generated a $2.2 million paper profit within
nine days, regulatory filings show.
The executives, including director Roberto Hernandez, benefited as the
company's stock climbed 47 percent from March 10 through yesterday's
close of markets, after Chief Executive Officer Vikram Pandit said in
a memo that the bank is having the best quarter since 2007. Their
buying spree was the first by bank insiders since Jan. 14, filings
"You're supposed to buy when everyone else is selling," said Bruce
Foerster, a former Lehman Brothers Holdings Inc. managing director who
now runs South Beach Capital Markets in Miami. Banks have internal
systems to monitor executive trades and prevent abuses, he said.
Pandit wrote in the internal memo March 10 that the company was
profitable in January and February, leaving him "encouraged with the
strength of our business so far in 2009." The comments triggered
Citigroup's biggest one-day percentage gain since Nov. 24, spurring
The stock had tumbled 95 percent in the previous year amid five
straight quarters of losses and three government rescue attempts since
October. The plunge has slashed the value of investments by the bank's
own employees, including some of the executives who purchased shares
Shannon Bell, a spokeswoman for New York-based Citigroup, declined to
comment on the trades.
Hernandez bought 6 million shares on March 2 at an average price of
$1.25 apiece, regulatory filings show. The stock, which touched a
record low price of 97 cents on March 5, closed at $1.52 in New York
Stock Exchange composite trading yesterday, giving him a paper profit
of $1.7 million.
Latin America Chief Executive Officer Manuel Medina-Mora bought 1.5
million shares on March 3 at an average price of $1.24, regulatory
filings show. Other buyers last week included Vice Chairman Lewis
Kaden with 100,000 shares and Controller John Gerspach with 65,000.
The shares slipped 1 cent to $1.53 as of 10:37 a.m., cutting the
executives' paper gains by $77,000.
Hernandez said last month he will step down from the board after
Citigroup's annual meeting in April. He plans to keep his role as
non-executive chairman of the company's Mexican bank, Banamex.
Hernandez also has an interest in a Mexican mutual fund that owns 14.6
million Citigroup shares, the filings show.
To contact the reporter on this story: David Scheer in New York at
dscheer at bloomberg.net.
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