There are times when I just wonder where the justice is. I represent, and have represented, former Citigroup (Now Morgan Stanley Smith Barney)brokers in arbitration claims filed by the firm seeking recovery of promissory note money. Citigroup isn’t alleging that my clients did anything wrong other than refusing to pay back the money Citi claims that it is owed.
On the other hand, my clients’ careers have been devastated, for the most part. The past several years have not been great ones to be a broker, particularly a low to mid-level producer at a firm looking to make itself look pretty for a suitor. That was the case with Prudential Securities brokers in 2002-2003 and it was the case more recently when Smith Barney and Morgan Stanley were doing the dance. Morgan Stanley and Smith Barney made it very clear that honest, hardworking (though not financially successful) brokers were not going to be able to hang around the firm any longer.
It did not matter if the broker came to work every day. It did not matter that the broker had no customer complaints or regulatory problems. It did not matter that the broker needed what little money the firm was willing to pay, even at a 20 or 25% payout. The broker just wanted to work and have the opportunity to build up his or her book of business. Instead, of course, the firms made it impossible to make a living and forced the brokers through the door. Then, Citigroup files an arbitration to recoup the money that the brokers were living on because their business collapsed.
Meanwhile, at the top of the food chain, two senior executives were caught by the SEC telling untruths about Citigroup’s exposure to sub-prime mortgages. They did it “unintentionally” we are told. Who cares. They did it, they messed up and their total fines were $180,000. You can read about it here.
According to Citigroup’s proxy statement, Gary Crittenden, who paid a $100,000 fine, received compensation totaling over $12,000,0000 in 2008. How is he supposed to learn from this experience?
In the 2009 Proxy Statement, it was disclosed that he received a $350,000 housing allowance, including a car and a driver, for the slightly more than six months he worked at Citigroup in 2009. My clients are lucky to to have a car that starts in the morning. This means that he had to give up less than 30% of his car allowance in 2009. I hope he was able to survive on what was left over from 2008.
That’s the angry view of one Lawyer From Jupiter, Palm Beach County, Florida. I’m Marc Dobin.