Citigroup Wrongful Termination Lawsuit Could Have Far-Reaching Impact

A former Citigroup employee has filed a wrongful termination lawsuit against her former employer and its chief operating offer— a case that could have far-reaching regulatory and corporate governance implications for the bank and the broader financial industry.

PayRate42, a financial services and fintech publication, reported details of the suit against the company and Chief Operating Officer Anand Selva. Kathleen Martin, a bank employee since 2021, claims Citigroup fired her unlawfully after she refused to provide false information to the Office of the Comptroller of the Currency (OCC).

The suit, filed in federal district court, New York, alleges that Martin was terminated after her persistent complaints about Selva’s alleged demands that she falsify data. Martin claims that Selva instructed her to hide “critical information” from the OCC to prevent Citigroup from “looking bad” in the eyes of the regulator.

The information at issue concerns a 2020 consent order issued by the OCC that required Citigroup to remedy significant deficiencies in its risk management and data governance controls. According to the plaintiff, her instructions to falsify those metrics constituted an attempt to evade scrutiny and the potential penalties for failing to comply with OCC’s directives.

Citigroup’s response is a firm denial. A statement by a spokesperson claims that the allegations are without merit and says Citigroup plans to defend itself vigorously. The bank did not provide comments on the plaintiff’s specific allegations.

Martin seeks reinstatement and compensation for lost pay, including bonuses. Her complaint argues that she acted in Citigroup’s best interests by ensuring regulatory compliance and transparency. It characterizes her termination as a retaliatory act against her efforts to uphold ethical standards.

The outcome of the case could set a precedent, and influence how financial institutions manage their internal controls and compliance functions. PayRate42 advises monitoring developments and assessing their impact on regulation and governance in the banking sector.

Read Today’s General Counsel’s past coverage of a Supreme Court ruling on the retaliatory standard for firing a whistleblower here and here.