Federal Appeals Court Denies Citigroup Claim to $400 Million Fine

A federal appeals court has ruled that Citigroup Vice President Tamika Miller is not entitled to a share of the $400 million civil fine the bank agreed to pay in October 2020 for its risk management failures. This decision came from the 2nd U.S. Circuit Court of Appeals in Manhattan.

Whistleblowing Claims:

Miller claimed that her whistleblowing about Citigroup’s alleged alteration of audit reports led to the bank’s settlement with the Federal Reserve and the Office of the Comptroller of the Currency (OCC).

She argued that Citigroup’s actions violated its previous settlements, including a $700 million settlement in 2015 with the Consumer Financial Protection Bureau over its credit card business and a $35 million settlement with the OCC over its marketing practices.

Court’s Decision:

Circuit Judge Denny Chin, writing for a three-judge panel, stated that federal law gave the OCC discretion to fine Citigroup over the audit reports but did not obligate it.

This undermined Miller’s claim that Citigroup hid its compliance failures to avoid a fine the government was entitled to collect.

Chin also noted that Miller’s lawsuit lacked specific details to provide Citigroup with fair notice of her claim and seemed like an attempt to use the litigation process to uncover hypothetical wrongdoing.

False Claims Act Context:

Miller’s lawsuit was filed under the federal False Claims Act, which permits whistleblowers to sue on behalf of the government and share in recoveries, usually between 15% and 30%.

Such cases typically argue that companies received money they weren’t entitled to, but Miller’s “reverse false claim” argued that Citigroup kept money it should have paid.

Citigroup’s Response:

Citigroup did not directly respond to requests for comment, nor did Miller’s lawyers. Since taking over in March 2021, Citigroup’s chief executive, Jane Fraser, has prioritized addressing the bank’s regulatory failings.