Citi Execs Make Killing On Stock Surge

[RamboLiberal]

Source: CBS News

Citigroup's recent upbeat news about its profitability has driven Wall Street's surge this week, but it also generated $2.2 million for four executives who bought millions of shares of company stock nine days ago, reports Bloomberg.

According to regulatory filings, director Roberto Hernandez bought 6 million shares on March 2 for an average price of $1.25. The stock touched a record low of $0.97 on March 5, but five days later CEO Vikram Pandit issued an internal memo saying the bank turned a profit over the first two months of the year. That news drove Citi shares up 47 percent to its Thursday close of $1.52, giving Hernandez a $1.7 million profit on paper, reports the news agency.

"You’re supposed to buy when everyone else is selling,” Bruce Foerster, a former Lehman Brothers Holdings Inc. managing director who now runs South Beach Capital Markets in Miami, told Bloomberg. He said banks have internal monitoring systems to keep an eye on executive trades and prevent abuses.

Other executives include Latin America CEO Manuel Medina-Mora, who bought 1.5 million shares on March 3 at an average price of $1.24, Vice Chairman Lewis Kaden with 100,000 shares and controller John Gerspach with 65,000, reports Bloomberg.


Read more: http://www.cbsnews.com/blogs/2009/03/13/business/econwatch/entry4863570.shtml

---

B*stards. How the hell was Citi a dead bank last week and this week is profitable? Hello!

[burythehatchet]

1. Classic insider trading. Of course, CItibank's sudden "profitability" was a result

of a temporary change in accounting rules that allowed them to pretend their losses did not happen.

[onenote]

16. not all insider trading is illegal

not suggesting you're saying it is, just wanting to clarify.

In fact, most insider trading is legal. The two big limitations is that it has to be reported and the insider purchase has to be held for at least six months. So if Citi's stock stays up, the buyers will do fine. But they can't just flip it immediately.

[Bandit]

20. I think if I suddenly received a forty billion dollar "gift" I might have a "Profit" as well.

Their Profit was after receiving billions in bailout funds to eliminate debt. No wonder they showed Profit... It really doesn't take a rocket scientist to figure that one out.

[SOS]

31. Exactly

How to BS the public and make millions for yourself in 3 easy steps:

1. Buy Citi stock at 98 cents on Friday
2. Over the weekend, contrive a memo, based on outrageous regulatory forbearance, that says Citi will be "profitable" by hiding their colossal losses.
3. Release memo, watch stock go to $1.75, sell and make millions.

Right before Eastern Europe collapses, sell short and close at 5 cents. Make more millions. Stick the ruined American worker with the bill.

It never ends with these crooks.

[Le Taz Hot]

2. Didn't Martha Stewart,

a Democrats, go to jail for this? And iirc, there was FAR less money involved.

[Shipwack]

9. It was worse than that...

Martha Stewart went to jail for saying she was innocent of a crime she was never charged for. Claiming innocence was decided to be "obstruction of justice", since she didn't cooperate with the feds by admitting guilt and saving them the trouble of an investigation.

[MrPerson]

10. She went to jail for lying about it

[Skink]

3. THey must have known the Government was not about to zero out the stock holders.

But were happy to see the share price drop on rumors of nationaization.

[Jackpine Radical]

4. Unspeakable bastards.

I'm sure they will all be donating their ill-gotten gains to the bailout fund.

[Belial]

5. Take me too..

I bought Citi and AIG.. Maybe one will balance the other?

[pampango]

6. The stock may have gone from $1.25 to $1.52, but if Hernandez doesn't sell his stock, "paper profit"

will disappear if Citi's stock starts falling again like the stock of a "dead bank". (If the stock drops back down to $.97, he won't look so smart.) At least if the execs are buying stock, they are taking a downside risk as well as upside. If they are trading on insider information then they are idiots and I hope they go to jail.

I have a bigger problem with stock options often given to execs - no downside risk with them.

[wackywaggin]

7. If they now sell

freeze all their assets and disgourge!!

[pampango]

8. They can do that, but it will be public knowledge and they risk insider trading

accusations if the stock goes down after they sell (or they miss out on more profits if the stock goes up more) and they may anger shareholders who will wonder why they should own the stock if the execs are selling at $1.50 after it used to be $40.

[notesdev]

14. ain't much risk

if no one has the balls to prosecute.

The Pandit memo is a classic example of stock market manipulation, but everyone is so happy about the sucker rally that he's going to get away with it.

[florida08]

11. still playing the game

the bastards..yet they're one of the five facing huge losses according to a regulatory report by McClatchy.

Posted on Monday, March 9, 2009
Citibank, Bank of America, HSBC Bank USA, Wells Fargo Bank and J.P. Morgan Chase reported that their "current" net loss risks from derivatives — insurance-like bets tied to a loan or other underlying asset — surged to $587 billion as of Dec. 31. Buried in end-of-the-year regulatory reports that McClatchy has reviewed, the figures reflect a jump of 49 percent in just 90 days.

http://www.mcclatchydc.com/227/story/63606.html

[Dreamer Tatum]

12. Execs buying stock is a good thing

They have to plan their transactions, by the way.

[TheWatcher]

17. Yes, and this was conveniently timed, Savvy and brave of them.

They bought this Stock NINE DAYS ago.

You remember nine days ago.

When the Stock was all but a Penny Stock and the Government was threatening Nationalization.

Then all of a sudden this "Miracle Memo", which was nothing more than "hopes" and "assurances" is suddenly "leaked" before the Market Open on Tuesday, with not one shred of tangible evidence or raw data that could be substantiated to clarify, back up, or prove that said Memo had ANY basis in reality.

And they make out like Bandits.

And we are supposed to think this is all fine and good, and not the least bit suspicious.

I guess this fake, artificial, manipulated Rally the past four days isn't based solely on Well-Crafted Propaganda, and is based on solid tangible evidence of a real "recovery."

There seems to be no limit to the Kool-Aid and Bullshit people are willing to swallow from the very Criminals that CAUSED the Economic Crisis to begin with.

Unbelievable.

[Dreamer Tatum]

21. Whatever, dude nt

[TheWatcher]

23. That's All You've Got? "Whatever, Dude?"

Let's get something nice and sparkling clear, sweetie.

I'm NOT your "Dude." That was your first mistake.

Read my Post below.

THAT is what's going on, "Dude".

It's not some "conspiracy kookery". This stuff is well chronicled in the headlines and articles of Yahoo Finance and Bloomberg Financial this week. If you choose to buy the Propaganda, that's your problem, "Dude".

There is not one shred of tangible evidence that Citi, or BAC, or JPM, or Wells Fargo, or GM, or GE being profitable the first two months of this quarter, other than the conveniently timed Propaganda they have lathered us with this week.

NOT ONE. I DARE you to find one. You won't, and that's why you have to respond with little two word snarky responses, because you can't refute that, and you can't refute what's in the message.

Citi insiders just happen to buy a large chunk of Stock as the Bank is sliding into the abyss and threatened with Nationalization Nine days ago.

And that's where the Bank WAS, "Dude." That's not "conspiracy kookery" either. It was ALL over the news that Citi was all but Bankrupt, and all but a penny Stock, and the Government announced plans to take a 36% Stake in the Bank to keep it from failing.

Fast Forward to Monday, and this conveniently "leaked" Memo released by the CEO, saying that they are Profitable in the first two months of the quarter, and that Government help won't be necessary. No tangible evidence of such, no substantiated data to prove the content of the Memo. Just "Hopes" and "Assurances"

Basically "Because I said so."

And all of a sudden THE Toxic Stock of the Dow that NO ONE in their right mind would touch with a 10 foot pole that had an Intra Day low of .97 a few days before, basically making it a PENNY Stock, jumps over 50% in two days, and those Insiders just happen to make out like Bandits.

And The Dow Rallies an Absurd 6%, based on the unsubstantiated words of a Corrupt CEO that have no tangible basis is reality. Just his words. No Proof, nothing else.

And Citi, which was on the Brink of Nationalization, is all of a sudden just fine again.

"Whatever, Dude."

The Rally in Wall Street for the Past four days is based SOLELY on "Hopes" "Assurances" and Well-Crafted Propaganda.

And too many people are buying into it and going along with it because "We need positive news, and we just want to feel good about the economy again."

WAKE UP.

[Dreamer Tatum]

25. What I said still stands: whatever, DUDE.

There is not one shred of tangible evidence that Citi, or BAC, or JPM, or Wells Fargo, or GM, or GE being profitable the first two months of this quarter, other than the conveniently timed Propaganda they have lathered us with this week.

NOT ONE. I DARE you to find one. You won't, and that's why you have to respond with little two word snarky responses, because you can't refute that, and you can't refute what's in the message.

Citi insiders just happen to buy a large chunk of Stock as the Bank is sliding into the abyss and threatened with Nationalization Nine days ago.


Gee, I HOPE there isn't a shred of tangible evidence that ANY publicly-traded company is profitable in January or February: THESE ARE PUBLICLY TRADED COMPANIES WHO DON'T REPORT Q1 EARNINGS UNTIL APRIL, AT THE EARLIEST. Their AUDITORS probably haven't seen the numbers yet.

That said, it is entirely plausible that a bank can claim operating profits in the quarter, since a lot of the losses are coming from charges, rather than from net credit losses. I expect that distinction to elude you, dude.

Citi insiders just happen to buy a large chunk of Stock as the Bank is sliding into the abyss and threatened with Nationalization Nine days ago.

And that's where the Bank WAS, "Dude." That's not "conspiracy kookery" either. It was ALL over the news that Citi was all but Bankrupt, and all but a penny Stock, and the Government announced plans to take a 36% Stake in the Bank to keep it from failing.

Fast Forward to Monday, and this conveniently "leaked" Memo released by the CEO, saying that they are Profitable in the first two months of the quarter, and that Government help won't be necessary. No tangible evidence of such, no substantiated data to prove the content of the Memo. Just "Hopes" and "Assurances"

Basically "Because I said so."

And all of a sudden THE Toxic Stock of the Dow that NO ONE in their right mind would touch with a 10 foot pole that had an Intra Day low of .97 a few days before, basically making it a PENNY Stock, jumps over 50% in two days, and those Insiders just happen to make out like Bandits.


I don't see any evidence of insider trading. Directors have to announce their intentions to buy and sell, whether you like/believe it or not. Maybe you should consider a little something: CITI HAS BEEN BEATEN DOWN FOR ONLY FOREVER AND A DAY. Furthermore, a Director of Citi is not going to retire on capital gains from a penny stock. So far, we have a director of a public company expressing confidence in said by company by planning a purchase of stock when it was beaten down to almost nothing AND is in fact at risk of being nationalized. I sort of WANT that sort of behavior on the part of the board and execs. Had you showed me a director who SHORTED the stock when it was at 45, then maybe I'd share your outrage.

Know who else could have done well with Citi stock in the last couple of weeks? Why, YOU, if you so chose.

At this point, your argument does not even merit conspiracy theory status, so don't worry about that. Dude.


And The Dow Rallies an Absurd 6%, based on the unsubstantiated words of a Corrupt CEO that have no tangible basis is reality. Just his words. No Proof, nothing else.

And Citi, which was on the Brink of Nationalization, is all of a sudden just fine again.

"Whatever, Dude."

The Rally in Wall Street for the Past four days is based SOLELY on "Hopes" "Assurances" and Well-Crafted Propaganda.

And too many people are buying into it and going along with it because "We need positive news, and we just want to feel good about the economy again."

WAKE UP.


Who are you to say when stock gains are "absurd?"

I will keep your opinion about the source of the market gains in mind, nevertheless. I mean, we all know it couldn't POSSIBLY be that investors are starting to like what they're hearing out of Washington, could it?

Hence my "whatever, dude."

[TheWatcher]

27. Oh would you please piss off with the "Dude" Crap.

You sound like an ignorant Frat Boy.

Gee, I HOPE there isn't a shred of tangible evidence that ANY publicly-traded company is profitable in January or February: THESE ARE PUBLICLY TRADED COMPANIES WHO DON'T REPORT Q1 EARNINGS UNTIL APRIL, AT THE EARLIEST. Their AUDITORS probably haven't seen the numbers yet.

That said, it is entirely plausible that a bank can claim operating profits in the quarter, since a lot of the losses are coming from charges, rather than from net credit losses. I expect that distinction to elude you, dude.


Actually is DOESN'T elude me "Dude". Maybe you haven't been keeping up with the fraud and shenanigans the Banks and Wall Street have been committing in the Bubble Economy the past six years, and I would expect that to elude YOU, because you feel comfortable with whatever Propaganda you're fed so you can feel good and act like you know something.

That's why you don't find any suspicion between these Stock Purchases and this conveniently "leaked" Memo, because you probably take everything you see on CNBC at face value, Drool, sputter out "yeah, Dude" and go on your merry way.

This was nothing more than a conveniently timed event to manipulate the Stock Price of the Financials and the Dow to higher Price Levels for Short term Profits, and Wall Street has been doing this for years, throughout this latest Bubble, which was mostly based on a sham Real Estate environment, CDO Swaps, Derivatives, and an out of control Monetary Policy, which created the ability for almost limitless Artificial Support for inflated Stock Prices.

The CEO's of these Banks have lied time and time again at the expense of the American People for their own narrow interests, and ignorant "Dudes" like you just keep drinking the Kool-Aid, puff out your chest, and act like you know something about economics.

And for your information, MOST of the insiders have been Commercial NET SHORT the whole way down, and were POSITIONING Huge Short Positions the WHOLE WAY UP in this Bubble, while CNBC was telling you things were a Great Buy and everyone should go long,and how "resilient and strong" the economy was, ALL THE WAY UP TO September of last year, right before the collapse. Like Bear Stearns. And Lehman. Etc, Etc, Etc. It's a SHELL GAME.

You probably bought that Fake rally back in late October, when the Dow had it's BIGGEST ONE WEEK ADVANCE EVER. Oh you REMEMBER. The Financial media was beating it's chest, cheerleading, Waving the Pom-Poms, complete with flashing lights and Dancing Girls, squealing to the Public that "The Crisis Is Over!" "We're SAVED!"

Care to recall where the Market was about three weeks later?

:rofl: You were probably one of the people you yelped out "THANK GOD IT PASSED!" when Paulsen's first Banker Bailout Bill was rammed through. (By the way, Congress didn't read that one either. But it's OK, you trust everything that comes out of Washington, so that shouldn't matter to you.)

Know who else could have done well with Citi stock in the last couple of weeks? Why, YOU, if you so chose.

At this point, your argument does not even merit conspiracy theory status, so don't worry about that. Dude.

Oh YES, and I'm sure a savvy "Dude" like you was in there buying with both fists when Government Nationalization seemed all but a GIVEN, and ALL indications were that Citi was going to fail at any time. You and every other savvy working American, who just couldn't pass up an opportunity like THAT.

Render unto me a fucking break, "DUDE."

Your attempted pseudo knowledgeable responses have about as much Credibility as Wall Street itself.

Who are you to say when stock gains are "absurd?"

I will keep your opinion about the source of the market gains in mind, nevertheless. I mean, we all know it couldn't POSSIBLY be that investors are starting to like what they're hearing out of Washington, could it?

Hence my "whatever, dude."

The only thing that "investors" are hearing out of Washington is a lot of Propaganda with absolutely nothing of substance to back it up. If you really think an $800 Billion Stimulus that the Congress didn't even bother to read before signing is going to "Save" the economy, you're in a dreamworld.

Here's a newsflash for you "Dude":

The Unfunded Debt Liability of the United States is $66 Trillion Dollars.

The Entire GDP OF THE PLANET IS $65 Trillion.

The CDO Swaps and Derivatives Markets are the next Bomb to Drop, and you don't even want to KNOW what kind of toxic bombs are in that mess.

Solve THAT with your "Stimlus" and Propaganda, and "Hopes" and "Assurances"

And when this whole Citi nonsense turns out to be complete, unmitigated BULLSHIT when it comes time to open the Books, ASSUMING they even report reputable numbers based on GAAP Acounting Principles and not the silly Pro-Forma methods of reporting that Companies have wedded themselves to, which basically means "We Made It up", maybe you might consider putting down your State Propaganda Kool-Aid Juice Box and bother to find out how this "economy" is really run.

Now, you run along over to "TheStreet.com", "MotleyFool", or whatever Sheep Investing Site you go to that tells you how to think.

Off to the ignore list with you. Just another ignorant, Kool-Aid drinking, waste of time.

Besides, what could a "Dude" (Still haven't figured out the gender thing, have you, genius?) like me possibly teach a scholar like you. Your willful ignorance, false paradigms, CNBC, and Wall Street Media Propaganda will tell you ALL you need to know.

[Dreamer Tatum]

29. Nice attempt at Victory Through Outraged Misdirection

When and where did I say anything about stimulus? Hopes? Assurances? I didn't. Save your scare capitalization, Skippy - doesn't work on me.

The issue at hand is the returns to C stock enjoyed by a Citi director.

A director who planned their purchase beforehand with the SEC and who made a few cents on a large block of shares.

As I said before, show me a director or a Form 144 filer who has shorted their own shares. Please. Drop the chest puffery, and show me a director of a publicly traded company that shorted their own stock. You can't.

Let me make it easier: show me where that Citi director realized their capital gains. Hint: you can't.

Dude.

[pampango]

22. If the execs sell their shares right away, the stock tanks when "real" news comes out,

and they emerge with a great short-term, manipulated profit, then nail them to the wall. If they hold the stock long term, then they are taking the same risk that any investor takes. I don't disagree with execs owning stock in the companies they manage.

[TheWatcher]

24. BuT you don't find the timing of these purchases the least bit suspicious

When you read about the "Miracle Memo" that was conveniently "leaked" on MONDAY about Citi's Profitability in the first two Months of the Quarter that Made the Stock Surge over 50% in two days, and are not the least bit disturbed that all this activity was based solely on a MEMO that had absolutely no basis or truth in reality, just "Hopes" and "Assurances" based on pure conjecture.

Jesus, I COULD DO THAT. Anybody with a ball point pen and letterhead Stationary could do that.

See, look how easy it is:

"I run a small business, and I made $50,000 in the first two months of this quarter. I have no data or proof in my Books I can show you to back this up, but it happened, because I say so."

WOW, I'm IN THE MONEY! And all I had to do was write some words in a MEMO.

No performance necessary!

I'm in the wrong business, I tell ya!

I should be the CEO of a large Bank!

I've SAVED THE ECONOMY!

PRAISE MARTY MOOSE!

You know, I think Wall Street has found it's next new formula to Propagandize and fleece the Public with for the next Bubble:

"Hope."

[Psephos]

13. Citi stock price rising is a good thing for millions of people

Anyone interested in the economic benefits of a healthier Citi (you could ask Geithner and Obama about that if you doubt it) can see the value of incentives for the people who run the bank to increase its viability and strengthen its balance sheets...especially when anyone who wants to can share in that incentive by purchasing Citi stock themselves.

That's how incentives should work. Reward for actual performance. They make money if and only if the bank improves. What a change from what's gone on in recent years.

The US Government now owns about a third of Citi, so every taxpayer in the country benefits from a rise in its price. I prefer that to schadenfreude.

[TheWatcher]

18. Not if it's based on lies and unsubstantiated Propaganda.

Christ this is unbelievable.

People are taking a "leaked" memo which has NO BASIS IN REALITY whatsoever at face value.

"Citi is profitable because the CEO said so, and that's good enough for me."

:wtf:


What does it take?

THERE IS NO TANGIBLE EVIDENCE THAT ANY OF THIS IS TRUE.

Not ONE SHRED.

There is NO PROOF of actual Performance here.

Again, just Unbelievable.

On Monday, Citi and BAC were on the edge of the abyss and nationalization, GM was collapsing, and GE was giving signs that they would be broke by the first week of June.

Now, on the basis of a "leaked" memo, Well-Crafted Propaganda that consists of nothing more than "Hopes" "Assurances" and "Rumors", All of these failed Institutions are parroting the SAME Propaganda from the SAME leaked Memo, with no tangible evidence that ANY of it is true. and they are all Smiling and saying "We're Profitable", We're Fine Now", "We Don't Need Any More Help", and everything is Puppies and Rainbows again, and PEOPLE ARE BUYING IT WITHOUT QUESTION?

One leaked Memo and 72 Hours Of Happy Talk And EVERYTHING IS FINE AGAIN?

This is truly becoming Bizarro World.

The only people that will end up "benefiting" from this sham at all are the Insiders who happened to conveniently buy this Nine Days ago before this "Miracle Memo" was conveniently leaked.

This is a sham for short term profit that has nothing to do with benefiting the rest of us or helping the economy or Banking system.


This country is slowly slipping into clinical Insanity.

:banghead:

[Dreamer Tatum]

26. Unless you're Citi's auditor, you have no idea what you're talking about

I'm sorry to sound harsh, but really...you haven't seen the numbers, so why could something have "no basis in reality?"

[TheWatcher]

28. You don't sound harsh, you sound like a Kool-Aid drinking Sheep who believes everything CNBC tells

him.

Look, it's clear you haven't got a single solitary clue about what has really been going on with Wall Street during this last Bubble Economy. There is no point in even having a discussion, because all you have to debate with is whatever Propaganda the Media feeds you. You're not even informed enough to be familiar with any of the information I laid out, and you can't possibly wrap your head around it, because you choose to willfully ignore it and just say it doesn't exist, because it doesn't fit into whatever delusions you've wedded yourself to or whatever false paradigm you believe in.

Bottom line. You aren't interested in any REAL truth, because you don't want to know what's going on. You'd rather have your perception managed by the Media, and believe whatever they tell you to.

Run along now.

"Dude"

[Dreamer Tatum]

30. Oooh, scary capitalization

I submit to your superior knowledge and wisdom.

:eyes:

[SOS]

32. Given Bernanke's recent endorsement of regulatory forbearance

it is highly unlikely that anyone will see an honest accounting of Citi's numbers.

[TheWatcher]

34. But you're not Citi's Accountant.

How could you possibly know what you are talking about?

:sarcasm:

Seriously though, that is another good point you brought up, and another reason for Wall Street's Euphoria this week. What Bernanke is proposing is yet another "modifying" of existing rules to allow Banks to commit even MORE fraudulent atrocities than they already have.

Oh, but it's all under the guise of "New Regulation", and it's so GOOD.

:eyes:

People like the poster I was sparring with above will buy it though. They love to be conned by Wall Street and Washington.

[crimsonblue]

15. I wouldn't be surprised if Citi purposely tanked their stock price...

so that they could buy it up, receive tens of billions in bailout money, and make a killing two ways when the price recovers. There needs to be a serious investigation into the sudden fiscal stability of Citi; it doesn't pass the smell test.

[Thor_MN]

19. Wait until the end of the quarter when they have to report write-offs

For most, if not all, of the the big financial institutions, the core business has been doing fine and reporting profits. It's only at the quarters, where they have to reort writeoffs due to bad decisions that the full picture comes out. If the execs sell now, string them up. If they hold it past the end of a couple quarters and then make a profit, I don't see much of a problem with execs having a personal stake in their company. Still think that their pay should be reduced to about an eighth of what they are making now, but I think I like the idea of execs that have something to lose if the company tanks.

[amandabeech]

33. I agree completely. The quarterlies will be a much better gage. n/t