Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Wall Street has never had a reputation for impeccable behavior.
Speaker 2: Headlines and pop culture often show a cutthroat industry with
Speaker 2: toxicity bubbling right beneath the surface, but Citygroup appeared to
Speaker 2: be different. In twenty twenty one, the bank promoted Jane
Speaker 2: Fraser to CEO, making her the first female CEO of
Speaker 2: any major Wall Street bank, and the company touted a
Speaker 2: concerted effort to prioritize diversity and inclusion. But in November
Speaker 2: of last year, a managing director at the bank named
Speaker 2: Ardith Lindsay filed a lawsuit accusing Citygroup of harassment and discrimination.
Speaker 3: The managing director painted this sort of picture of just
Speaker 3: an extremely dysfunctional workplace, sort of life with discrimination and
Speaker 3: sexual harassment and drug use that she says persisted over
Speaker 3: a number of years.
Speaker 2: My Bloomberg colleague, Page Smith covered the lawsuit in November
Speaker 2: and then kept digging. She worked with finance reporter Max Abelson,
Speaker 2: who's covered Wall Street for years, and together they uncovered
Speaker 2: a much bigger story about problems in Citygroup's equities division
Speaker 2: and the finance industry's long path to reckoning, with how
Speaker 2: it treats women.
Speaker 4: The story is a reminder that questions about gender and
Speaker 4: behavior like are not abstract at all, and the question
Speaker 4: of corporations and what they owe their employees is a
Speaker 4: very real thing with real consequences.
Speaker 2: Today on the show, we go inside Citygroup and explore
Speaker 2: what behavior within this one unit reveals about just how
Speaker 2: far Wall Street still has to go.
Speaker 1: This is the big take from Bloomberg News. I'm Sarah Holder.
Speaker 2: In November of twenty twenty three, Citygroup executive artist Lindsay
Speaker 2: filed a lawsuit against the bank, accusing it of tolerating
Speaker 2: a culture of harassment and discrimination in its equities unit.
Speaker 2: Citygroup has said it will defend itself against our claims.
Speaker 2: But for Bloomberg reporter Paige Smith, the legal filing opened
Speaker 2: a rare window into part of City Group's culture. She
Speaker 2: wanted to pry it all the way open. So, Paige,
Speaker 2: where did the reporting process take you next? What other
Speaker 2: questions did you want to ask?
Speaker 3: I think the thing that we really wanted to uncover
Speaker 3: with this piece was understanding that the lawsuit was one
Speaker 3: person's experience within the equity's division, But we really wanted
Speaker 3: to learn more about how widespread the alleged behavior was
Speaker 3: how many people had experienced it over what period of time,
Speaker 3: what kinds of experiences may be extended beyond those described
Speaker 3: in the lawsuit. So our reporting sort of brought us
Speaker 3: to these interviews with these many, many people who worked
Speaker 3: in or closely with the Equity's division over a long
Speaker 3: period of time.
Speaker 2: Can you describe any more of the specific allegations that
Speaker 2: were unearthed in these conversations.
Speaker 3: One instance that is one depiction of some of the
Speaker 3: dysfunction that we uncovered in our reporting was a client
Speaker 3: party at a sort of buzzy downtown club restaurant called
Speaker 3: Catch in May twenty eighteen, where there were rappers performing,
Speaker 3: there were City Group employees there, there were clients there,
Speaker 3: and there were also two people linked to the Equities
Speaker 3: Division there, a young two year rotator and her roommate,
Speaker 3: And at the time the night sort of progressed and
Speaker 3: one of the unit's bosses actually came up and started
Speaker 3: sort of grinding his crotch against the young two year
Speaker 3: rotator's roommate.
Speaker 2: That's according to two people present who said they saw
Speaker 2: the incident.
Speaker 3: It was an instance that sort of stuck out to
Speaker 3: us as just showing that this behavior was not just
Speaker 3: tolerated but witnessed by a number of people within the division,
Speaker 3: and it was not just a standalone incident, but kind
Speaker 3: of a pattern of harassment.
Speaker 4: And what I find impressive about pages reporting is that
Speaker 4: it doesn't just stop there. She also has that rotator
Speaker 4: going on to be told to like wear higher heels
Speaker 4: to work and to wear shorter skirts. And I think
Speaker 4: that there was a male trader who kept asking about
Speaker 4: her love life. Pages work depicts not just these individual instances,
Speaker 4: but a pattern of a unit where all was not well.
Speaker 2: What is the culture of an equities division generally.
Speaker 4: Well, you know, Wall Street, like any high stakes corporate
Speaker 4: environment is never perfect when there's a lot of money
Speaker 4: to be made or to be lost. I think it's
Speaker 4: completely normal to expect a certain level of intensity and competitiveness.
Speaker 4: But we're not talking about pedestrian banal competitiveness. We're talking
Speaker 4: about people who were using cocaine, and not just after hours,
Speaker 4: but at work. One person had to tell another to
Speaker 4: wipe the white residue beneath their nose, you know, inside
Speaker 4: the Manhattan headquarters. And it's also so you know, it's
Speaker 4: not a matter of like policing other people's drug use.
Speaker 4: There's also a pattern that she found of men raiding
Speaker 4: their female colleagues, including very very young ones, by their
Speaker 4: looks and oggling and staring at their bodies as they
Speaker 4: walk by. I think that if it's fair to expect
Speaker 4: a certain level of intensity and competitiveness, that's certainly fair.
Speaker 4: But it's also fair to expect that at some of
Speaker 4: the biggest companies in the world, like people shouldn't be
Speaker 4: objectified and be stared at and sort of face a
Speaker 4: sort of an unusual degree of drug use like on
Speaker 4: a random day.
Speaker 2: Absolutely, But what did City say about some of the
Speaker 2: specific allegations that you raise.
Speaker 3: A City spokesperson did respond to many of our questions,
Speaker 3: and one of the responses that we received was that
Speaker 3: while several of the alleged incidents would have violated the
Speaker 3: banks code of conduct, you know, some of them did
Speaker 3: not receive a complaint, or others were old, or others
Speaker 3: complained allegations that the bank said were perhaps too vague
Speaker 3: or involved people who had left the firm. So we
Speaker 3: did get some sort of specific responses to individual incidents
Speaker 3: that we asked for comment on, but others were sort
Speaker 3: of not commented on by the bank.
Speaker 2: In Citygroup's response to Bloomberg, a spokesperson said, in part,
Speaker 2: quote cities values and expectations are clear. No one should
Speaker 2: ever be discriminated against or harassed in the workplace. He continued, quote,
Speaker 2: while we will not comment on individual internal matters, simply put,
Speaker 2: where warranted, we exit employees who failed to meet our
Speaker 2: high standards of respectful treatment in our workplace.
Speaker 4: What he told us is that the attempts to be
Speaker 4: inclusive and to be equitable don't stop, and that the
Speaker 4: sposures and called it a continuous and proactive process. I
Speaker 4: was interested by that. You rarely hear Wall Street banks
Speaker 4: say like, you know, we're trying to make things better
Speaker 4: and it's not necessarily making any concessions. In fact, I
Speaker 4: think it's fair to say City Group did not concede
Speaker 4: to any of any of our reporting. But I think
Speaker 4: that the reality is, no matter what industry we're talking about,
Speaker 4: it's not easy to have thousands of employees, and it's
Speaker 4: not easy to change a culture and chauvinism and misogyny.
Speaker 4: No industry has a monopoly on those things.
Speaker 2: I want to talk a little bit more about City
Speaker 2: versus all these other banks, or in the context of
Speaker 2: these other banks before this story, how did you guys
Speaker 2: think about City in terms of its culture and in
Speaker 2: terms of its progress on dealing with some of these issues.
Speaker 4: You know, City Group has cultivated an image of inclusivity,
Speaker 4: and you know, they've also had some pretty impressive benchmarks,
Speaker 4: and my reporting on race and especially black executives at
Speaker 4: black staffers at the big banks, City Groups numbers have
Speaker 4: been awfully impressive, and not just in a short time span.
Speaker 4: I think it's fair to say that over really several
Speaker 4: years now, they have been ahead of the pack Wall
Speaker 4: Street when it comes to racial inclusion. On the other hand,
Speaker 4: you know, what we've seen is a bank that while
Speaker 4: we were finishing our reporting, they put someone on leave
Speaker 4: because of a verbal altercation and told investment bankers like
Speaker 4: not to embarrass the firm when it comes to drinking.
Speaker 4: So it's a bank that has made strides, for sure.
Speaker 4: But I think it's fair to say, what page, what's
Speaker 4: a good phrase, inconsistent culture something like that.
Speaker 3: I would say inconsistent is very accurate. And also just
Speaker 3: these things don't exist in a vacuum, right. You can
Speaker 3: make strides in hiring and representation, but also have a
Speaker 3: workplace that is very toxic, and toxic enough actually to
Speaker 3: cause people to leave because they feel their complaints are
Speaker 3: not hurt. I think it's also worth noting that Citygroup
Speaker 3: is one of the largest US banks obviously, but also
Speaker 3: has a female CEO who was appointed in twenty twenty one,
Speaker 3: the only of the largest US banks to have a
Speaker 3: female CEO. And it's also made significant efforts and set
Speaker 3: pretty intense goals for itself in terms of pay, equity
Speaker 3: and hiring goals and representation in the workplace. But at
Speaker 3: the same time, these patterns of harassment were occurring, and
Speaker 3: the equity division, specifically within City Group was a business
Speaker 3: that lagged Piers on Wall Street for many, many years
Speaker 3: in terms of revenue and rankings and continues to lag peers.
Speaker 4: In fact, in a big picture, City has never really
Speaker 4: gotten things right compared to rivals. You know, their share price,
Speaker 4: it's in a different ballpark than Goldman Saxes in Morgan Stanley, JP,
Speaker 4: Morgan's of the world. And then when it comes to
Speaker 4: not just City Group as a global institution, but the
Speaker 4: equities business in particular, they've gone up and down. They
Speaker 4: had a hot streak. Then there was like what we
Speaker 4: call a fat finger trade. That reminds me of Homer
Speaker 4: Simpson and one of my favorite episodes of the Simpsons
Speaker 4: when I hear the phrase fat finger. But it just
Speaker 4: means that there was a mistake, and not a small mistake,
Speaker 4: but a big mistake that had large ramifications. And you
Speaker 4: don't want that to happen because it does not reflect
Speaker 4: well on the unit, and if it happens at a
Speaker 4: large enough scale, it doesn't reflect well on this CEO either.
Speaker 4: The equities team has lagged rivals. They've really tried to
Speaker 4: figure it out. And I one reason that I've enjoyed
Speaker 4: working on this story with Page is that it's not
Speaker 4: just about culture. It's also about underperformance too well.
Speaker 2: I mean, you mentioned some of these issues with a
Speaker 2: bad trade, profitability issues. Has this toxic culture that you'd
Speaker 2: identified contributed to these broader business problems at the bank.
Speaker 4: The only thing I would add is that the reason
Speaker 4: you don't want bad behavior inside of a company isn't
Speaker 4: just out of morality and ethics, although morals matter too,
Speaker 4: It's also because, like it's alienating, you don't want.
Speaker 3: To have to go distracting.
Speaker 4: It's distracting, And I think that if you see bad
Speaker 4: behavior and then you complain about it and nothing happens,
Speaker 4: you end up leaving or just disliking your job. And
Speaker 4: in fact, we have meant several people right page who
Speaker 4: ended up leaving.
Speaker 2: And especially if it's happening with rotators or people young
Speaker 2: in the industry, if that's your first experience in the
Speaker 2: banking world, you're not going to continue at least not
Speaker 2: there definitely.
Speaker 3: And we also had some reporting even before this story
Speaker 3: was published that showed that as you sort of continue
Speaker 3: up the corporate ladder, there are just not as many
Speaker 3: women represented and kind of the upper upper rechelans.
Speaker 2: After the break, what does this pattern of behavior at
Speaker 2: City reveal about the rest of Wall Street?
Speaker 1: Six years after Me Too?
Speaker 2: I want to take a second to talk about the
Speaker 2: banking industry broadly and the way that these allegations that
Speaker 2: you've unearthed fit into this broader pattern. Max, you wrote
Speaker 2: a story back in twenty eighteen called why Wall Street
Speaker 2: hasn't had its Me Too moment yet? Why were big
Speaker 2: banks insulated from the reckoning that was rippling across industries
Speaker 2: at that time?
Speaker 1: Especially?
Speaker 4: Well, if you want to go back not just a
Speaker 4: couple of years, but like decades, Wall Street really was
Speaker 4: a bifurcated industry. There were a essentially either no women
Speaker 4: or very very few women at the top of Wall
Speaker 4: Street for a really long time. I think they'd have
Speaker 4: a firm like Goldman Sachs didn't have a female partner
Speaker 4: until I think until my lifetime. And I'm old, but
Speaker 4: I'm not that old. This is so we're talking in
Speaker 4: the nineteen eighties. Then in the nineteen nineties there were
Speaker 4: some really famous lawsuits that revealed and alleged sort of
Speaker 4: cinematic bad behavior, the kind of things that make it
Speaker 4: into movies like The Wolf of Wall Street, but happening
Speaker 4: at big firms. So by the time the Me Too
Speaker 4: movement rolled around, I think there was an expectation among
Speaker 4: women and men on Wall Street the world would sort
Speaker 4: of be hearing about what happened behind closed doors. And
Speaker 4: what we've reported on over the last few years is
Speaker 4: a way that cultural and financial and legal forces have
Speaker 4: kept a lot of allegations of bad behavior quiet. So,
Speaker 4: for example, you have a kind of alternate system called arbitration,
Speaker 4: which definitely applies to all sorts of corporations, including the media,
Speaker 4: but Wallstreet has been at the forefront of using force arbitration,
Speaker 4: which is a way of saying to someone who has
Speaker 4: signed a con if something bad happens, you are not
Speaker 4: going to be taking it before judge. You're going to
Speaker 4: be going in this quieter, more shadowy system that's essentially
Speaker 4: kind of like a privatized version of justice, and that
Speaker 4: has happened a lot on Wall Street.
Speaker 3: So if you are a worker in any workplace and
Speaker 3: you signed any sort of arbitration agreement on your first
Speaker 3: day of work, you essentially waive your right to appear
Speaker 3: in an open court and disagree with your employer about
Speaker 3: what happened. Wall Street has very frequently turned to these
Speaker 3: sort of nasty tools to quiet.
Speaker 4: Workers, although it has begun to change. I think Paige
Speaker 4: and I have maybe one of our first pieces of
Speaker 4: reporting together was about federal legislation that changes harassment laws
Speaker 4: so that you don't have to go into arbitration.
Speaker 3: Arbitration agreements now are not binding for workers who signed
Speaker 3: them on their first days, So workers who do come
Speaker 3: forward with allegations like the ones artist Lindsay outline in
Speaker 3: her lawsuit against City Grew, they can appear in an
Speaker 3: open court and disagree with their employer about what happened.
Speaker 2: Yeah, I mean it seems like this is an example
Speaker 2: of being able to make public these allegations, which then
Speaker 2: allowed more people to come forward and speak to you.
Speaker 2: Though you've spoken with twenty two people, but none of
Speaker 2: them would go on the record. What did you make
Speaker 2: of that given what's changed over the past few years.
Speaker 3: I would say that things have certainly changed over the
Speaker 3: past few years, and of course artist Lindsay's lawsuit in
Speaker 3: particular does change things in this particular division at this
Speaker 3: particular bank. But I think that people are still very
Speaker 3: scared to share their experiences publicly or on the record,
Speaker 3: either they're still in the industry or they are fearful
Speaker 3: of what sort of retaliation might come down the line.
Speaker 3: I think people think of Wall Street as being this
Speaker 3: giant conglomerate of big banks with thousands of employees. A
Speaker 3: common theme that I heard was that it is still
Speaker 3: quite small and people do hear about things, So I
Speaker 3: think that that was certainly a concern.
Speaker 4: And pages reporting shows that people do not necessarily have
Speaker 4: a good experience when they speak up. This story has
Speaker 4: some really key details about talking to HR and talking
Speaker 4: to senior executives and sharing things that happened. And then
Speaker 4: I think there's like a half a dozen people in
Speaker 4: this story who felt really dissatisfied that there was a
Speaker 4: lack of change after they spoke up. And so I
Speaker 4: feel like I can sympathize really with why. You know,
Speaker 4: one might think, well, if I go public with a journalist,
Speaker 4: that's not going to end any better than my previous attempts.
Speaker 2: Well, so, I mean, as you were doing reporting on this,
Speaker 2: especially since twenty eighteen, does it feel like Wall Street's
Speaker 2: me too moment has finally come? No?
Speaker 4: I don't. I don't. I think that to watch what
Speaker 4: happened with Harvey Weinstein and of Hollywood was to see
Speaker 4: an industry whose mores were completely turned on their head.
Speaker 4: I think you might be able to say the same
Speaker 4: about politics other kinds of entertainment, But Wall Street, by
Speaker 4: and large, I don't think you can say that anyone
Speaker 4: who has accumulated vast power the way that Weinstein did
Speaker 4: has been outed and publicly revealed the way that he
Speaker 4: had been. Wall Street is a place where things go
Speaker 4: wrong and things go right. But by and large, we
Speaker 4: see the same executives and the same companies accumulate and
Speaker 4: keep power. And I would say that in order to
Speaker 4: qualify as like a fast me too moment, that would
Speaker 4: mean change, and I'm not so sure we've seen dramatic change.
Speaker 1: This is the Big Take from Bloomberg News.
Speaker 2: I'm Sarah Holder. This episode was produced by Julia Press.
Speaker 2: It was edited by Aaron Edwards and Sally Bakewell. It
Speaker 2: was mixed by Alex Subura. It was fact checked by
Speaker 2: Thomas lu Our senior producers are Naomi Shavin and Elizabeth Ponso.
Speaker 2: Nicole Beemster Borr is our executive producer. Sage Bauman is
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