NEW YORK (TheStreet) -- Citigroup (C) is more focused than ever on ensuring employees comply with global securities laws after paying $2.5 billion in penalties over foreign-exchanging rigging, about 2,500 times the amount of unlawful gains.
"The value that we generated from the illegal conduct in foreign exchange was order of magnitude about $1 million," Citigroup President James Forese said during a presentation at the Morgan Stanley financials conference this week. "The misconduct of some our employees has been hugely painful to the institution and to shareholders."
Last month, Citigroup and JPMorgan Chase (JPM) were hit the hardest of four banks, including RBS (RBS) and Barclays (BCS), that pleaded guilty to manipulating the dollar-euro exchange, the world's biggest currency market. As part of its settlement with the Department of Justice and the Federal Reserve, Citigroup agreed to pay $925 million in fines and $342 million in civil penalties. In November, the bank agreed to pay a total of $1.02 billion in settlements with the U.S. Commodity Futures Trading Commission, the U.S. Comptroller of the Currency and the U.K. Financial Conduct Authority.
The misbehavior has been "incredibly damaging and costly," Forese said. "We're spending a lot of time on improving the conduct of our employees and making sure that they perform.
The bank said in November that it had already begun making changes to systems, controls and monitoring processes "to better guard against improper behavior." Citigroup's reforms are part of its agreement with regulators, one of whom issued a stern warning to financial institutions when the most recent settlement was announced.