Dive Deposits: Citi allegations put junior banker treatment back in spotlight

Allegations of verbal harassment, in context with BMO’s firing of several bankers in a bullying case, put a power dynamic under the microscope.

Move over, 100-hour workweeks. The next hot-button issue with regard to the treatment of junior bankers may be verbal harassment.

Citi in January placed on leave a managing director in its New York City-based equity capital markets group who allegedly shouted insults at members of his team at the end of a meeting, according to seven sources who spoke to Reuters, which reported the story Thursday.

With that, Citi becomes the second major bank in the last two months to have allegations of bullying published in the press. 

BMO in January fired four Toronto-based mining bankers after an internal investigation into allegations that a young male colleague was subjected to homophobic slurs and targeted in person and over Microsoft Teams, according to The Globe and Mail. Two other BMO employees resigned in connection with the case, the outlet reported.

Citi is investigating at least two incidents of alleged abusive behavior involving Edward Ruff, the managing director mentioned above. On Nov. 13, people with direct knowledge of the matter told Reuters, Ruff was upset that two junior bankers on the energy team he leads were not in the room by the time a meeting began. One of the junior bankers had dialed into the meeting on time but arrived in person a couple of minutes after it started, two of the sources said. Another junior banker came in shortly afterward, they added.

A senior banker heard Ruff shouting from his office and walked over to intervene, five sources told Reuters.

Separately, another employee — an analyst who is a person of color — told a superior that Ruff had insulted and intimidated him during a half-hour call, a source told the wire service.

Ruff told the analyst he should not bring a complaint to human resources because the people there would not be his “friend,” the source told Reuters.

Ruff had complained to his team Nov. 11, a Saturday, that analysts were not working that day, even though Citi policy gives Saturdays protected status, three sources said. The analyst came to work the following day, a Sunday, to find he was one of two junior bankers on Ruff’s team in the office, according to the source.

Citi offered to move the analyst to a different team, and he accepted, four people familiar with the matter said.

“We provide colleagues with a number of avenues to raise concerns in confidence, and when substantiated, we will take appropriate action, up to and including termination of employment,” a Citi spokesperson said in a statement to Reuters and Bloomberg. “While we will not comment on individual internal matters, simply put, where warranted, we exit employees who fail to meet our high standards of respectful treatment in our workplace.”

Ruff did not respond to attempts by Reuters or Bloomberg to reach him by phone, text and email. An email to his Citi email account generated an automatic response indicating he’s on a leave of absence.

Ruff has worked at Citi since 2012, in two stints, according to his LinkedIn profile. He spent two years as an investment banking associate, then left in 2014 for Perella Weinberg in a lateral move. Ruff would return to Citi two months later as an associate in equity capital markets. Observers may wonder if the résumé blip takes new context in light of current behavioral allegations.   

The co-heads of Citi’s North America equity capital markets business, Paul Abrahimzadeh and Russ Chong, told employees in January that Ruff was on a leave of absence, three sources told Reuters. Abrahimzadeh and Chong did not detail why Ruff was on leave or for how long, and asked the staff not to speculate, according to the wire service.

Citi has tried, since the start of the COVID-19 pandemic — and especially since Jane Fraser took over as CEO in 2021 — to differentiate through workplace culture. Citi became the first U.S. Wall Street bank to openly champion a hybrid work model for most employees, at a time when the CEOs of competitors such as Goldman Sachs and JPMorgan Chase were pushing for a prompt return to the office.

“Empathy is foundational to how we deliver for our clients and how we attract and retain talent,” Fraser wrote in an October 2021 post that appears on the Milken Institute’s website.

But even Fraser’s soft skills have stiffened at times in recent months.

“We have incredibly high ambitions for this bank and, the train, it’s gonna move fast,” Fraser said at a town hall shortly after announcing Citi’s wide-scale reorganization. “So lean in, help us win with clients, help us deliver the changes, or get off the train.”

Citi, in its statement Thursday, said, “The work to have an inclusive and equitable workplace culture never stops, and ensuring that these standards are well understood and complied with by everyone at Citi is a continuous, proactive process.”

Treatment of junior bankers has drawn focus in recent years — accelerated by a presentation that 13 Goldman junior bankers gave to their supervisors in 2021, detailing “inhumane” 100-hour workweeks, deteriorating physical and mental health and a souring outlook for the future.

As the presentation went viral, Goldman CEO David Solomon asserted the bank would more strictly enforce its own rule preserving Saturdays and commended the junior bankers for taking their concerns to their managers.

“We want a workplace where people can share concerns freely,” Solomon said at the time.

But the biggest shift brought by the 2021 junior banker debacle was higher pay. A swath of banks — JPMorgan Chase, Citi, Barclays, Deutsche Bank, Bank of America and Wells Fargo — responded by raising entry-level investment banker pay to the $100,000 threshold. Then Goldman Sachs and its chief rival, Morgan Stanley, went to $110,000.

The Citi and BMO allegations show that not all workplace culture issues involving junior bankers can be solved with money.

Perhaps the banking industry would do well to look at a power dynamic that may enable some senior bankers to feel comfortable expecting subordinates to work uncommon hours and accept insults, bullying and intimidation without complaint.

Source: Banking Dive