• On Wednesday, US regulators announced $400 million in fines against Citigroup for “related to deficiencies in enterprise-wide risk management, compliance risk management, data governance, and internal controls.”
  • It’s the latest in what has been a volatile few weeks for the global bank, which announced a change in leadership in September.
  • Business Insider has previously reported on issues regulators had with Citi’s inability to fix risk, compliance, and tech systems.  
  • Visit Business Insider’s homepage for more stories.

It’s been a complicated month for Citigroup.

The third-biggest US bank by assets shocked Wall Street in September when it announced Michael Corbat, Citi’s chief executive, would be retiring in February.

Jane Fraser, the bank’s president and CEO of its consumer banking division, was named Corbat’s successor, making her the first woman to serve as the chief executive of a major US bank.

However, it wasn’t the selection of Fraser, who had been seen by many as Corbat’s eventual successor after she was promoted to president of the bank last fall, that turned heads.

Instead, it was the timing of the announcement that raised questions. Corbat was only 60, leading some to believe he would remain at the helm of Citi longer. Analysts said the timing of the announcement was surprising and unexpected. The bank was also only a few months removed from an erroneous $900 million wire. 

jane fraser

Jane Fraser, Citi’s president and CEO of its consumer banking division

Julian Restrepo/Citigroup via AP

On Wednesday, less than a month after the announcement of Corbat’s retirement, the Federal Reserve Board and Office of the Comptroller of the Currency announced $400 million in fines levied against Citi “related to deficiencies in enterprise-wide risk management, compliance risk management, data governance, and internal controls,” according to the OCC. 

In addition to the fine, Citigroup needs to check with

Powell wants more stimulus for the economy … Trump punts on it until after the election, maybe … Louis Navellier’s thoughts looking forward

Yesterday morning, Federal Reserve Chairman, Jerome Powell, said we face “tragic” risks if the government doesn’t spend more to prop up the economy.

A few hours later, President Trump tweeted that he is rejecting Nancy Pelosi’s economic stimulus package, priced at $2.4 trillion.

Stocks fell off a cliff on the news.

As you can see below, the Dow gave up 440 points to end the day down 1.3%.

The time of Trump’s tweet — 2:48 PM — coincides exactly with the plummet.

chart, line chart

© Provided by InvestorPlace

Then, an hour or so after that, Trump signaled a reversal, tweeting:


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If I am sent a Stand Alone Bill for Stimulus Checks ($1,200), they will go out to our great people IMMEDIATELY. I am ready to sign right now.

As I write Wednesday morning, the markets have rallied on hopes for more stimulus, with all three indices up over 1%.

***Yesterday’s wild ride began in the morning with Powell speaking at a virtual conference of private-sector economists

He stated:

The expansion is still far from complete.

At this early stage, I would argue that the risks of policy intervention are still asymmetric. Too little support would lead to a weak recovery, creating unnecessary hardship.

Even if policy actions ultimately prove to be greater than needed, they will not go to waste.

Stocks took the comments in stride. A few bumps, but the market edged up as trading continued throughout the day.

That changed with President Trump’s tweet:

Nancy Pelosi is asking for $2.4 Trillion Dollars to bailout poorly run, high crime, Democrat States, money that is in no way related to COVID-19.

We made a very generous offer

Shake Shack’s  (SHAK) – Get Report comparable-sales numbers are turning around, Loop Capital analyst Lynne Collier says, initiating coverage of the burger chain at buy with a $78 share-price target.

The New York company’s comparable sales have hit bottom and a “brand transformation” has begun, the analyst said, according to The Fly.

Shake Shack has done well in curbside and digital sales, which should trigger “outsized” sales comparison in the intermediate term, she said. 

Worries about the company’s urban focus at a time when people are fleeing to the suburbs to escape the coronavirus have been priced into the stock, Collier said.

Shake Shack’s same-store sales plunged 49% in the quarter ended June 24 from a year earlier amid the coronavirus pandemic and civil-rights protests that reduced the restaurants’ operating hours.

The drop was “driven by a decline in traffic of 60.1% and an increase in price mix of 11.1%,” Shake Shack said in a statement. 

“Same-Shack sales improved during the quarter, delivering 64%, 42% and 42% declines for fiscal periods April, May and June, respectively.”

The company opened four new company-operated Shacks, in Sacramento, Calif., Los Angeles, Charlotte and St. Louis, in the latest quarter. Each of them “opened with encouraging levels of sales,” Shake Shack said.

Revenue totaled $91.8 million for the latest quarter.

On a day when the market is indicated sharply lower, Shake Shack’s shares recently traded unchanged at $64.87. The stock has jumped 22% over the past three months through Thursday, compared with a 9% gain for the S&P 500.

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