Headline: Citigroup in SEC Argentina accounts probe. By DAVID WELLS Source: Financial Times (USA edition). 6 May 2004
Citigroup yesterday said the US Securities and Exchange Commission was reviewing how the company accounted for its Argentine operations during 2001 and 2002. The world's largest financial services company made the disclosure in a quarterly filing, which said Citigroup believed the SEC's investigation originated with the company's accounting treatment regarding investments, business activities and loan loss allowances with respect to Argentina in the fourth quarter of 2001 and the first quarter of 2002. It also said the SEC was reviewing the "timing and support documentation for certain accounting entries or adjustments". Citigroup's Argentine operations wiped out more than Dollars 1bn of pre-tax earnings over those two quarters. The losses came after Argentina defaulted on Dollars 95bn of debt in late 2001 and then devalued its currency, the peso. US banks, including Citigroup and FleetBoston Financial, now part of Bank of America, lost billions of dollars. The SEC has requested accounting and internal controls-related information from Citigroup for 2001, 2002 and 2003. It scheduled testimony to begin this month. A Citigroup spokeswoman said the company was co-operating with the investigation. Citigroup has publicly said the Argentine crisis was a wake-up call for the bank. In April 2002, Victor Menezes, then Citigroup's head of emerging markets, said the situation went beyond the dangers that were predicted by Citigroup's risk models: "What happened in Argentina went beyond our expectations in the terms of the stress tests." By June 2002, Citigroup said it was dismantling its emerging markets business. Mr Menezes, who had run the division, was shifted to a strategic role. Last month he said he was retiring from Citigroup. ==================================== ########################################################################## # Send submissions for Goanet to [EMAIL PROTECTED] # # PLEASE remember to stay on-topic (related to Goa), and avoid top-posts # # More details on Goanet at http://joingoanet.shorturl.com/ # # Please keep your discussion/tone polite, to reflect respect to others # ##########################################################################
