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Staff fraud a risk: Citi disclaimer

PTI  New Delhi, January 10, 2011
First Published: 00:31 IST(10/1/2011) | Last Updated: 00:33 IST(10/1/2011)

It may be a routine ‘risk factor’ disclaimer, but global giant Citibank has acknowledged that it runs the risk of possible fraud by its employees and internal controls may not always be effective.


“There have also been a number of highly publicised cases involving fraud or

other misconduct by employees in the financial services industry in recent years and Citigroup runs the risk that employee misconduct could occur,” stated the ‘Risk Factors’ disclosure by the group.

The disclosure is a part of the last annual account report filed by Citigroup with US market regulator SEC, while the same was also referred to in the last quarterly report filing made in late 2010.

Such ‘risk factor’ disclosure filings are made as a routine practice by all listed companies with the US regulator to inform investors about the potential risks they face and has no direct relation to the fraud in India.

“It is not always possible to deter or prevent employee misconduct and the extensive precautions Citigroup takes to prevent and detect this activity may not be effective in all cases,” the bank filing read.

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