Citi's Pandit Raises Doubts, as Bank Nears Breakup

"Up until very recently he was a [big] defender of the financial supermarket model -- which they are now abandoning -- and if they're breaking with the path, I think the biggest signal would be to change leadership," says Richard Ferlauto, the director of corporate governance and pension investment at the American Federation of State, County and Municipal Employees, or AFSCME, a frequent critic of Pandit. "He should have made a decision when he first took the reins about changing the business model and that way preserved significant shareholder value that's been lost in the past year."

The New York company is under pressure from regulators to make more drastic changes to find additional capital. Citi has already received $45 billion through the Treasury Department's Troubled Assets Relief Program -- making the government its largest investor -- along with other private and public sector capital investments. Selling a majority stake of its profitable Smith Barney business to Morgan Stanley is another effort to raise capital.

Pandit took Citi's reins in December 2007, following the forced resignation of Charles Prince. The company, along with Merrill Lynch, recently acquired by Bank of America (BAC Quote) , suffered the worst of the losses stemming from the credit crunch.

Citi had purchased hedge fund Old Lane Partners earlier that year, which Pandit had been running. He previously worked as head of investment securities at Morgan Stanley.

Since then, Citi's management has slowly changed over as Pandit sought to bring in his own executives.