Japan's Financial Services Agency (FSA) ordered the closure of Citibank's entire private banking operation in the country, citing illegal profit-making, deceptive sales practices, and obstruction of regulatory inspections. The action covers four locations, a main branch in Tokyo's Marunouchi district and three sub-branches in Fukuoka, Nagoya, and Osaka, collectively employing around 400 staff and serving clients with at least $1 million to invest.
The branches must begin winding down on 29 September 2004, with full banking license revocations taking effect on 30 September 2005. Violations included brokering art deals for undisclosed gains, selling products without disclosing risks to customers, and permitting transactions potentially linked to money laundering.
Regulators also found that Citibank had effectively ignored a prior suspension and improvement order issued in August 2001, and that progress reports submitted through March 2003 claiming full compliance were false. FSA deputy director Isao Yoshitomi called it "a very grave punishment in banking law."
Citibank apologized and pledged to comply with FSA directives, promising to submit a corrective action plan by 22 October. The bank named Douglas Peterson as its new Japan CEO, and six executives resigned to take responsibility while others faced pay cuts or formal reprimands.
Historical summary. TurkishPress restated this AFP wire report, first published in September 2004, in its own words.