Update: Citi's Sieg under outside legal investigation

Citi has enlisted a large outside law firm to help it conduct a human resources investigation into its wealth head, Andy Sieg, according to news reports.

Bloomberg reported Wednesday that Citi has brought in the prominent firm Paul Weiss to help look into complaints against Sieg, who was recruited from Bank of America's Merrill in 2023 as part of Citi CEO Jane Fraser's bid to overhaul the firm's flagging wealth management business.

Bloomberg said at least six managing directors at Citi have lodged HR complaints against Sieg and that the firm is particularly looking into his treatment of former private banking head Ida Liu.

Liu left Citi in January after 18 years and was replaced by four regional executives, all of them men. Bloomberg said questions have also been raised about his treatment of Kristen Bitterly, who became the head of the firm's Wealth at Work division in September.

Paul Weiss's investigation is now complete, according to Bloomberg. The news service said his alleged bad behavior includes expletive-filled rants, sarcastic remarks made about an executive to a group of colleagues after the person had left the room and a description of one employee's work as "pathetic" in the presence of that person and colleagues.

READ MORE: Citi's Sieg: New clients take backseat to getting more from current
Citi lifts CEO Fraser's pay by a third to $34.5 million
Citi sees wealth 'turning point' with net new asset haul
Citi revamps private bank's leadership following Ida Liu's exit
Citi copy-paste error almost sent $6B to wealth account

A Citi spokesperson declined to confirm details in the report, which was compiled with the use of anonymous sources.

'A hard-charging leader'

The spokesperson noted that Sieg was hired "with a clear mandate for change" and said the bank's wealth business "has been transformed under his leadership."

"Andy is a hard-charging leader who has established a strong, client-focused franchise that is delivering revenue growth and improved returns," the spokesperson said. "He also continues to attract, retain and promote industry-leading talent, including the more than 40% of accomplished women on Wealth's Senior Leadership Team. We look forward to Andy continuing to drive strong business performance."

Phil Waxelbaum, an industry recruiter and the founder of Masada Consulting, cautioned against being too hasty to judge Sieg. He said Sieg's assignment to overhaul the firm's wealth division was, by its very nature, likely to make him some enemies.

"It wasn't: Here's this great-running machine. Why don't you slide into the driver's seat and keep it running?" Waxelbaum said. "It was the: the engine knocks, it's out of alignment, and the windows don't go up and down. When you take on something like that there are going to be tough decisions related to competence and there are going to be some unhappy people."

Using an outside law firm standard with executive inquiries

Waxelbaum said the investigation by an outside law firm is standard for companies looking into allegations of misconduct at the executive level. A similar process was used by LPL Financial before it ousted its former CEO Dan Arnold over allegations that he had failed to maintain a respectful workplace.

Unfortunately, Waxelbaum said, even if it turns out there is no merit to the allegations against Sieg, the cloud they cast will continue to hang over him. Many firms in similar circumstances would part ways with an executive just to avoid future legal exposure, he said.

"You can be innocent as hell and they'll still miss you because you'll be gone," Waxelbaum said.

Citi execs have only good things to say about Sieg

Since taking over as head of Citi's wealth management unit nearly two years ago, Sieg has received little but praise from Fraser and other executives in public statements. Speaking in April about the firm's first-quarter earnings, top Citi leaders said the wealth business was making "excellent progress" under Sieg's leadership. Citi provided Sieg with $13 million in compensation for his work last year after saying in a proxy statement that "He has set a new path for the business, has made many of the necessary, material changes to improve performance and brought in significant new talent."

That same proxy statement said the firm's private bank had "underperformed" but that other "parts of the franchise have performed well and made an upward turn under [Sieg's] leadership." Citi's private bank reported $2.4 billion in revenue for 2024, up 2% from the year before.

For its most recent quarter, Citi reported total revenue for its wealth business was up 20% year over year to just over $1.8 billion and its net income was up 135% to $210 million. In a call with analysts discussing those second-quarter earnings, Fraser made reference to the firm's ambition to eventually manage $5 trillion its current clients are believed to now hold either with other institutions or off to the side for other purposes.

"In wealth, we've got great investments runway and just huge upside," Fraser said. "You can tell the excitement from Andy and the team from our existing clients, the famous $5 trillion, as well as the opportunity with the new wealth creators. We're very much that private bank for the progress makers in the world."

— This story has been updated with comments from a Citi spokesperson and executives at the firm, as well as an industry recruiter.