Financial Winners and Losers: Citigroup

Updated from 1:50 p.m. EDT

Financial stocks were among the worst decliners of Wednesday's session after reports the government will seek more regulation over compensation paid to bank CEOs, including those who have not received government aid.

A report in The Wall Street Journal said that President Obama is looking to overhaul compensation practices across the industry, even if a company has not received funds from the Troubled Asset Relief Program, or TARP.

The idea of more government regulation did not sit well with bank stocks. Bank of America (BAC Quote) lost 10.2%, Citigroup (C Quote) sank 6.8%, and Wells Fargo (WFC Quote) gave back 5.8%.

Companies that have not received TARP funds or other government aid were also hit by the news. Lincoln National (LNC Quote) lost 10.7%, Principal Financial (PFG Quote) fell 6%, and Hudson City Bancorp (HCBK Quote) was down 4.4%.

Citigroup's slide comes even as its Primerica Financial Services unit is reportedly looking for bids. Bloomberg reported the Citi subsidiary approached private-equity firms, including J.C. Flowers, Blackstone Group (BX Quote) and TPG, to gauge their interest in buying the division's sales arm.

Meanwhile, JPMorgan Chase (JPM Quote) is planning to sell a new dollar-denominated bond that doesn't have the backing of the Federal Deposit Insurance Corp., according a report in The Wall Street Journal that cited two people familiar with the situation. The five-year senior notes will be benchmark size, the report said, which means JPMorgan will raise at least $500 million.

The Journal also reported that American Express (AXP Quote) is also in the market with a two-part benchmark deal that is not backed by the government, according to a person familiar with the deal. Shares finished lower by 5.3% to $24.09.