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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: Wall Street has never had a reputation for impeccable behavior.

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Speaker 2: Headlines and pop culture often show a cutthroat industry with

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Speaker 2: toxicity bubbling right beneath the surface, but Citygroup appeared to

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Speaker 2: be different. In twenty twenty one, the bank promoted Jane

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Speaker 2: Fraser to CEO, making her the first female CEO of

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Speaker 2: any major Wall Street bank, and the company touted a

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Speaker 2: concerted effort to prioritize diversity and inclusion. But in November

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Speaker 2: of last year, a managing director at the bank named

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Speaker 2: Ardith Lindsay filed a lawsuit accusing Citygroup of harassment and discrimination.

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Speaker 3: The managing director painted this sort of picture of just

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Speaker 3: an extremely dysfunctional workplace, sort of life with discrimination and

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Speaker 3: sexual harassment and drug use that she says persisted over

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Speaker 3: a number of years.

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Speaker 2: My Bloomberg colleague, Page Smith covered the lawsuit in November

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Speaker 2: and then kept digging. She worked with finance reporter Max Abelson,

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Speaker 2: who's covered Wall Street for years, and together they uncovered

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Speaker 2: a much bigger story about problems in Citygroup's equities division

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Speaker 2: and the finance industry's long path to reckoning, with how

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Speaker 2: it treats women.

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Speaker 4: The story is a reminder that questions about gender and

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Speaker 4: behavior like are not abstract at all, and the question

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Speaker 4: of corporations and what they owe their employees is a

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Speaker 4: very real thing with real consequences.

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Speaker 2: Today on the show, we go inside Citygroup and explore

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Speaker 2: what behavior within this one unit reveals about just how

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Speaker 2: far Wall Street still has to go.

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Speaker 1: This is the big take from Bloomberg News. I'm Sarah Holder.

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Speaker 2: In November of twenty twenty three, Citygroup executive artist Lindsay

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Speaker 2: filed a lawsuit against the bank, accusing it of tolerating

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Speaker 2: a culture of harassment and discrimination in its equities unit.

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Speaker 2: Citygroup has said it will defend itself against our claims.

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Speaker 2: But for Bloomberg reporter Paige Smith, the legal filing opened

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Speaker 2: a rare window into part of City Group's culture. She

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Speaker 2: wanted to pry it all the way open. So, Paige,

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Speaker 2: where did the reporting process take you next? What other

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Speaker 2: questions did you want to ask?

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Speaker 3: I think the thing that we really wanted to uncover

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Speaker 3: with this piece was understanding that the lawsuit was one

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Speaker 3: person's experience within the equity's division, But we really wanted

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Speaker 3: to learn more about how widespread the alleged behavior was

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Speaker 3: how many people had experienced it over what period of time,

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Speaker 3: what kinds of experiences may be extended beyond those described

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Speaker 3: in the lawsuit. So our reporting sort of brought us

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Speaker 3: to these interviews with these many, many people who worked

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Speaker 3: in or closely with the Equity's division over a long

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Speaker 3: period of time.

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Speaker 2: Can you describe any more of the specific allegations that

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Speaker 2: were unearthed in these conversations.

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Speaker 3: One instance that is one depiction of some of the

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Speaker 3: dysfunction that we uncovered in our reporting was a client

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Speaker 3: party at a sort of buzzy downtown club restaurant called

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Speaker 3: Catch in May twenty eighteen, where there were rappers performing,

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Speaker 3: there were City Group employees there, there were clients there,

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Speaker 3: and there were also two people linked to the Equities

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Speaker 3: Division there, a young two year rotator and her roommate,

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Speaker 3: And at the time the night sort of progressed and

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Speaker 3: one of the unit's bosses actually came up and started

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Speaker 3: sort of grinding his crotch against the young two year

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Speaker 3: rotator's roommate.

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Speaker 2: That's according to two people present who said they saw

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Speaker 2: the incident.

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Speaker 3: It was an instance that sort of stuck out to

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Speaker 3: us as just showing that this behavior was not just

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Speaker 3: tolerated but witnessed by a number of people within the division,

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Speaker 3: and it was not just a standalone incident, but kind

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Speaker 3: of a pattern of harassment.

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Speaker 4: And what I find impressive about pages reporting is that

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Speaker 4: it doesn't just stop there. She also has that rotator

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Speaker 4: going on to be told to like wear higher heels

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Speaker 4: to work and to wear shorter skirts. And I think

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Speaker 4: that there was a male trader who kept asking about

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Speaker 4: her love life. Pages work depicts not just these individual instances,

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Speaker 4: but a pattern of a unit where all was not well.

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Speaker 2: What is the culture of an equities division generally.

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Speaker 4: Well, you know, Wall Street, like any high stakes corporate

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Speaker 4: environment is never perfect when there's a lot of money

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Speaker 4: to be made or to be lost. I think it's

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Speaker 4: completely normal to expect a certain level of intensity and competitiveness.

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Speaker 4: But we're not talking about pedestrian banal competitiveness. We're talking

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Speaker 4: about people who were using cocaine, and not just after hours,

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Speaker 4: but at work. One person had to tell another to

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Speaker 4: wipe the white residue beneath their nose, you know, inside

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Speaker 4: the Manhattan headquarters. And it's also so you know, it's

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Speaker 4: not a matter of like policing other people's drug use.

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Speaker 4: There's also a pattern that she found of men raiding

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Speaker 4: their female colleagues, including very very young ones, by their

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Speaker 4: looks and oggling and staring at their bodies as they

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Speaker 4: walk by. I think that if it's fair to expect

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Speaker 4: a certain level of intensity and competitiveness, that's certainly fair.

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Speaker 4: But it's also fair to expect that at some of

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Speaker 4: the biggest companies in the world, like people shouldn't be

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Speaker 4: objectified and be stared at and sort of face a

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Speaker 4: sort of an unusual degree of drug use like on

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Speaker 4: a random day.

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Speaker 2: Absolutely, But what did City say about some of the

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Speaker 2: specific allegations that you raise.

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Speaker 3: A City spokesperson did respond to many of our questions,

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Speaker 3: and one of the responses that we received was that

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Speaker 3: while several of the alleged incidents would have violated the

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Speaker 3: banks code of conduct, you know, some of them did

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Speaker 3: not receive a complaint, or others were old, or others

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Speaker 3: complained allegations that the bank said were perhaps too vague

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Speaker 3: or involved people who had left the firm. So we

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Speaker 3: did get some sort of specific responses to individual incidents

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Speaker 3: that we asked for comment on, but others were sort

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Speaker 3: of not commented on by the bank.

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Speaker 2: In Citygroup's response to Bloomberg, a spokesperson said, in part,

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Speaker 2: quote cities values and expectations are clear. No one should

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Speaker 2: ever be discriminated against or harassed in the workplace. He continued, quote,

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Speaker 2: while we will not comment on individual internal matters, simply put,

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Speaker 2: where warranted, we exit employees who failed to meet our

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Speaker 2: high standards of respectful treatment in our workplace.

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Speaker 4: What he told us is that the attempts to be

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Speaker 4: inclusive and to be equitable don't stop, and that the

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Speaker 4: sposures and called it a continuous and proactive process. I

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Speaker 4: was interested by that. You rarely hear Wall Street banks

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Speaker 4: say like, you know, we're trying to make things better

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Speaker 4: and it's not necessarily making any concessions. In fact, I

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Speaker 4: think it's fair to say City Group did not concede

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Speaker 4: to any of any of our reporting. But I think

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Speaker 4: that the reality is, no matter what industry we're talking about,

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Speaker 4: it's not easy to have thousands of employees, and it's

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Speaker 4: not easy to change a culture and chauvinism and misogyny.

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Speaker 4: No industry has a monopoly on those things.

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Speaker 2: I want to talk a little bit more about City

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Speaker 2: versus all these other banks, or in the context of

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Speaker 2: these other banks before this story, how did you guys

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Speaker 2: think about City in terms of its culture and in

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Speaker 2: terms of its progress on dealing with some of these issues.

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Speaker 4: You know, City Group has cultivated an image of inclusivity,

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Speaker 4: and you know, they've also had some pretty impressive benchmarks,

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Speaker 4: and my reporting on race and especially black executives at

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Speaker 4: black staffers at the big banks, City Groups numbers have

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Speaker 4: been awfully impressive, and not just in a short time span.

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Speaker 4: I think it's fair to say that over really several

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Speaker 4: years now, they have been ahead of the pack Wall

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Speaker 4: Street when it comes to racial inclusion. On the other hand,

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Speaker 4: you know, what we've seen is a bank that while

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Speaker 4: we were finishing our reporting, they put someone on leave

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Speaker 4: because of a verbal altercation and told investment bankers like

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Speaker 4: not to embarrass the firm when it comes to drinking.

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Speaker 4: So it's a bank that has made strides, for sure.

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Speaker 4: But I think it's fair to say, what page, what's

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Speaker 4: a good phrase, inconsistent culture something like that.

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Speaker 3: I would say inconsistent is very accurate. And also just

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Speaker 3: these things don't exist in a vacuum, right. You can

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Speaker 3: make strides in hiring and representation, but also have a

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Speaker 3: workplace that is very toxic, and toxic enough actually to

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Speaker 3: cause people to leave because they feel their complaints are

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Speaker 3: not hurt. I think it's also worth noting that Citygroup

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Speaker 3: is one of the largest US banks obviously, but also

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Speaker 3: has a female CEO who was appointed in twenty twenty one,

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Speaker 3: the only of the largest US banks to have a

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Speaker 3: female CEO. And it's also made significant efforts and set

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Speaker 3: pretty intense goals for itself in terms of pay, equity

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Speaker 3: and hiring goals and representation in the workplace. But at

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Speaker 3: the same time, these patterns of harassment were occurring, and

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Speaker 3: the equity division, specifically within City Group was a business

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Speaker 3: that lagged Piers on Wall Street for many, many years

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Speaker 3: in terms of revenue and rankings and continues to lag peers.

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Speaker 4: In fact, in a big picture, City has never really

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Speaker 4: gotten things right compared to rivals. You know, their share price,

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Speaker 4: it's in a different ballpark than Goldman Saxes in Morgan Stanley, JP,

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Speaker 4: Morgan's of the world. And then when it comes to

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Speaker 4: not just City Group as a global institution, but the

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Speaker 4: equities business in particular, they've gone up and down. They

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Speaker 4: had a hot streak. Then there was like what we

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Speaker 4: call a fat finger trade. That reminds me of Homer

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Speaker 4: Simpson and one of my favorite episodes of the Simpsons

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Speaker 4: when I hear the phrase fat finger. But it just

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Speaker 4: means that there was a mistake, and not a small mistake,

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Speaker 4: but a big mistake that had large ramifications. And you

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Speaker 4: don't want that to happen because it does not reflect

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Speaker 4: well on the unit, and if it happens at a

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Speaker 4: large enough scale, it doesn't reflect well on this CEO either.

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Speaker 4: The equities team has lagged rivals. They've really tried to

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Speaker 4: figure it out. And I one reason that I've enjoyed

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Speaker 4: working on this story with Page is that it's not

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Speaker 4: just about culture. It's also about underperformance too well.

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Speaker 2: I mean, you mentioned some of these issues with a

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Speaker 2: bad trade, profitability issues. Has this toxic culture that you'd

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Speaker 2: identified contributed to these broader business problems at the bank.

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Speaker 4: The only thing I would add is that the reason

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Speaker 4: you don't want bad behavior inside of a company isn't

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Speaker 4: just out of morality and ethics, although morals matter too,

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Speaker 4: It's also because, like it's alienating, you don't want.

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Speaker 3: To have to go distracting.

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Speaker 4: It's distracting, And I think that if you see bad

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Speaker 4: behavior and then you complain about it and nothing happens,

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Speaker 4: you end up leaving or just disliking your job. And

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Speaker 4: in fact, we have meant several people right page who

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Speaker 4: ended up leaving.

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Speaker 2: And especially if it's happening with rotators or people young

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Speaker 2: in the industry, if that's your first experience in the

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Speaker 2: banking world, you're not going to continue at least not

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Speaker 2: there definitely.

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Speaker 3: And we also had some reporting even before this story

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Speaker 3: was published that showed that as you sort of continue

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Speaker 3: up the corporate ladder, there are just not as many

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Speaker 3: women represented and kind of the upper upper rechelans.

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Speaker 2: After the break, what does this pattern of behavior at

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Speaker 2: City reveal about the rest of Wall Street?

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Speaker 1: Six years after Me Too?

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Speaker 2: I want to take a second to talk about the

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Speaker 2: banking industry broadly and the way that these allegations that

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Speaker 2: you've unearthed fit into this broader pattern. Max, you wrote

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Speaker 2: a story back in twenty eighteen called why Wall Street

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Speaker 2: hasn't had its Me Too moment yet? Why were big

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Speaker 2: banks insulated from the reckoning that was rippling across industries

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Speaker 2: at that time?

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Speaker 1: Especially?

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Speaker 4: Well, if you want to go back not just a

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Speaker 4: couple of years, but like decades, Wall Street really was

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Speaker 4: a bifurcated industry. There were a essentially either no women

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Speaker 4: or very very few women at the top of Wall

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Speaker 4: Street for a really long time. I think they'd have

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Speaker 4: a firm like Goldman Sachs didn't have a female partner

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Speaker 4: until I think until my lifetime. And I'm old, but

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Speaker 4: I'm not that old. This is so we're talking in

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Speaker 4: the nineteen eighties. Then in the nineteen nineties there were

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Speaker 4: some really famous lawsuits that revealed and alleged sort of

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Speaker 4: cinematic bad behavior, the kind of things that make it

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Speaker 4: into movies like The Wolf of Wall Street, but happening

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Speaker 4: at big firms. So by the time the Me Too

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Speaker 4: movement rolled around, I think there was an expectation among

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Speaker 4: women and men on Wall Street the world would sort

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Speaker 4: of be hearing about what happened behind closed doors. And

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Speaker 4: what we've reported on over the last few years is

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Speaker 4: a way that cultural and financial and legal forces have

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Speaker 4: kept a lot of allegations of bad behavior quiet. So,

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Speaker 4: for example, you have a kind of alternate system called arbitration,

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Speaker 4: which definitely applies to all sorts of corporations, including the media,

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Speaker 4: but Wallstreet has been at the forefront of using force arbitration,

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Speaker 4: which is a way of saying to someone who has

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Speaker 4: signed a con if something bad happens, you are not

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Speaker 4: going to be taking it before judge. You're going to

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Speaker 4: be going in this quieter, more shadowy system that's essentially

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Speaker 4: kind of like a privatized version of justice, and that

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Speaker 4: has happened a lot on Wall Street.

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Speaker 3: So if you are a worker in any workplace and

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Speaker 3: you signed any sort of arbitration agreement on your first

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Speaker 3: day of work, you essentially waive your right to appear

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Speaker 3: in an open court and disagree with your employer about

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Speaker 3: what happened. Wall Street has very frequently turned to these

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Speaker 3: sort of nasty tools to quiet.

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Speaker 4: Workers, although it has begun to change. I think Paige

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Speaker 4: and I have maybe one of our first pieces of

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Speaker 4: reporting together was about federal legislation that changes harassment laws

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Speaker 4: so that you don't have to go into arbitration.

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Speaker 3: Arbitration agreements now are not binding for workers who signed

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Speaker 3: them on their first days, So workers who do come

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Speaker 3: forward with allegations like the ones artist Lindsay outline in

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Speaker 3: her lawsuit against City Grew, they can appear in an

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Speaker 3: open court and disagree with their employer about what happened.

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Speaker 2: Yeah, I mean it seems like this is an example

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Speaker 2: of being able to make public these allegations, which then

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Speaker 2: allowed more people to come forward and speak to you.

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Speaker 2: Though you've spoken with twenty two people, but none of

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Speaker 2: them would go on the record. What did you make

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Speaker 2: of that given what's changed over the past few years.

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Speaker 3: I would say that things have certainly changed over the

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Speaker 3: past few years, and of course artist Lindsay's lawsuit in

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Speaker 3: particular does change things in this particular division at this

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Speaker 3: particular bank. But I think that people are still very

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Speaker 3: scared to share their experiences publicly or on the record,

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Speaker 3: either they're still in the industry or they are fearful

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Speaker 3: of what sort of retaliation might come down the line.

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Speaker 3: I think people think of Wall Street as being this

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Speaker 3: giant conglomerate of big banks with thousands of employees. A

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Speaker 3: common theme that I heard was that it is still

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Speaker 3: quite small and people do hear about things, So I

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Speaker 3: think that that was certainly a concern.

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Speaker 4: And pages reporting shows that people do not necessarily have

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Speaker 4: a good experience when they speak up. This story has

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Speaker 4: some really key details about talking to HR and talking

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Speaker 4: to senior executives and sharing things that happened. And then

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Speaker 4: I think there's like a half a dozen people in

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Speaker 4: this story who felt really dissatisfied that there was a

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Speaker 4: lack of change after they spoke up. And so I

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Speaker 4: feel like I can sympathize really with why. You know,

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Speaker 4: one might think, well, if I go public with a journalist,

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Speaker 4: that's not going to end any better than my previous attempts.

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Speaker 2: Well, so, I mean, as you were doing reporting on this,

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Speaker 2: especially since twenty eighteen, does it feel like Wall Street's

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Speaker 2: me too moment has finally come? No?

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Speaker 4: I don't. I don't. I think that to watch what

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Speaker 4: happened with Harvey Weinstein and of Hollywood was to see

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Speaker 4: an industry whose mores were completely turned on their head.

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Speaker 4: I think you might be able to say the same

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Speaker 4: about politics other kinds of entertainment, But Wall Street, by

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Speaker 4: and large, I don't think you can say that anyone

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Speaker 4: who has accumulated vast power the way that Weinstein did

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Speaker 4: has been outed and publicly revealed the way that he

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Speaker 4: had been. Wall Street is a place where things go

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Speaker 4: wrong and things go right. But by and large, we

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Speaker 4: see the same executives and the same companies accumulate and

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Speaker 4: keep power. And I would say that in order to

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Speaker 4: qualify as like a fast me too moment, that would

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Speaker 4: mean change, and I'm not so sure we've seen dramatic change.

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Speaker 1: This is the Big Take from Bloomberg News.

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Speaker 2: I'm Sarah Holder. This episode was produced by Julia Press.

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Speaker 2: It was edited by Aaron Edwards and Sally Bakewell. It

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Speaker 2: was mixed by Alex Subura. It was fact checked by

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Speaker 2: Thomas lu Our senior producers are Naomi Shavin and Elizabeth Ponso.

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Speaker 2: Nicole Beemster Borr is our executive producer. Sage Bauman is

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Speaker 2: our head of podcasts. Thanks for listening. Please follow and

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