FT : Singapore Government Nails ex-Citibank Staff

Friday, January 25, 2008

Seven former Citibank employees have been charged by the Singapore government with breaking client confidentiality laws in a case that reflects fierce recruitment competition among private banks and Singapore’s need to uphold tough bank secrecy rules.  They were accused of taking information on private bank clients from Citibank, a part of Citigroup, before they joined rival UBS in 2006.  They face a total of 1,223 charges under Singapore’s computer misuse act and bank secrecy law for accessing Citibank’s computers without authority and downloading or printing out client information.

The charges were filed after the Singapore police’s commercial affairs division conducted a year-long inquiry.  The police began their investigation after Citibank filed a lawsuit against six of the former employees in 2006.  That case was settled out of court last year with the payment of undisclosed damages.  Citibank also filed a complaint with the police and the Monetary Authority of Singapore, the city-state’s financial supervisor.  In its civil suit, Citibank alleged that some of the bankers had taken S$50m ($35m) worth of business to UBS by persuading clients to switch accounts.  Only three of the seven are still em-ployed at UBS and have been suspended pending the outcome of the case.  Singapore has some of the world’s strictest bank secrecy laws, which have helped make it the fastest-growing wealth management centre.  This was the first time that the authorities have used the computer misuse act and banking laws to prosecute the disclosure of bank customer information The accused face up to 20 years in jail and fines of up to S$125,000.  Most of those indicted were relationship managers in Citibank’s Citigold operation which caters for rich clients.  Jonathan Seah, a former Citibank branch manager who was among the seven indicted, acknowledged in a 2006 interview with the Financial Times and in a court affidavit that he sent client information to his personal e-mail address so he could work from home.  He denied he had forwarded the data to any other party or used it to benefit UBS, and had returned the information when Citibank requested it.  He alleged that Citibank had filed the civil suit to deter others from leaving Citibank to join rival private banks.  Citigroup dismissed such suggestions…..

Reference : http://www.ft.com/cms/s/0/7bbc62ec-cae8-11dc-a960-000077b07658.html

2 Responses to “FT : Singapore Government Nails ex-Citibank Staff”

  1. maddy Says:

    Look at the article below, these are the 7 names mentioned in 2006 :Jonathan Seah, Carel Low, Valerie Lim, Esther Lim, elaine Tan and Rosalind Lee.
    However in 2008 – if you noticed, Rosalind Lee has been replaced by Jelene Lee. Elaine Tan has become Lydia Koh. I am also wondering if these 2 has changed their names ?
    See 2006 article below


    SINGAPORE (Reuters) – Citibank, which is suing six former employees in Singapore, said three of them had taken S$50 million ($32 million) of its private banking business when they defected to rival UBS, court documents show.

    Citibank has filed lawsuits in Singapore’s High Court against six former bankers who dealt with wealthy clients, saying some of them had urged clients to jump ship when they moved to UBS.

    It said the former bankers had sent client details to their personal e-mail accounts before they quit to join UBS, adding that the U.S. bank had lost about S$50 million in client funds.

    In affidavits, those bankers who have so far filed a defence either denied soliciting banking business from Citibank customers, or said information was sent to their personal e-mail addresses so they could work from home.

    Disputes of this sort are rare in the genteel world of private banking.

    But Citibank’s action against former employees reflects intense competition for a small pool of qualified bankers as Singapore’s fast-growing wealth management sector caters to an increasing number of rich Chinese, Indians and other Asians.

    “In the financial services sector, private banking has been one of the fastest growing areas for Singapore, creating opportunities for these institutions,” said Song Seng Wun, an economist at CIMB-GK Research.

    “It’s extremely competitive, so it’s in their interest to protect their employees and clients from being poached,” he said.


    Citibank is taking legal action to restrain several of its former employees from disseminating client information and from poaching its customers and employees.

    It also wants the bankers to surrender all hardware and documents containing client information and is seeking damages.

    “The privacy of customer, proprietary or confidential information is one of our highest priorities. We will always act to protect the privacy of such information,” a Citibank spokesman said, repeating an earlier statement.

    A UBS official said the bankers concerned were either on leave or had not yet started at the bank. The bankers named by Citibank could not be reached for comment.

    Court documents show that Citibank is suing Carel Low, a former personal banker at Citibank who quit in May to join rival UBS, and her former assistant, Valarie Lim.

    It is also suing three former relationship managers — Elaine Tan, Rosalind Lee, and Esther Lim — as well as a former branch manager, Jonathan Seah.


    Citibank said in a writ of summons filed on July 21 that Low solicited 11 of its customers, of whom six — with assets under management totalling more than S$12 million — have already transferred their accounts to UBS.

    It said Low made use of the bank’s confidential customer information for the purpose of UBS’s business and that Low had solicited Citibank’s customers and persuaded them to transfer their investments and transactions to UBS.

    All of Low’s clients who defected to UBS had listed Low as their new personal banker in the transfer forms, along with her new contact number at UBS, Citibank said in the court documents.

    In an affidavit, Low denied that she had solicited Citibank’s customers and employees, and said she had not deliberately forwarded e-mails with confidential client information to her personal e-mail account.

    “My intention at material time was to forward to my personal e-mail account documents which were purely of a personal nature for my retention, i.e. personal e-mails from friends, photographs etc,” Low said, according to the court documents.

    She added that she was not in possession of the confidential information because her Web-based mail account, which filtered larger e-mails into a bulk mail folder, had automatically deleted the messages after a certain period without access.

    Citibank said Tan, who left the bank in February, had sent information about clients, including their investments and contact details, to her personal e-mail account just 10 days before her resignation.

    It also said that Tan had solicited 14 of Citibank’s customers with total investments amounting to more than S$19 million. All of them have transferred their accounts to UBS, Citibank said. Tan has not yet filed her defence.

    Citibank said that Lee had sent confidential documents to her personal e-mail four days before she resigned, and solicited six of its customers — with assets amounting to more than S$19 million — all of whom have transferred to UBS, according to court documents. Lee has not yet filed her defence.

    Low’s assistant Valarie Lim denied soliciting Citibank’s customers and said she had sent information to her personal e-mail with the implied or expressed consent of the clients.

  2. There are some interesting points in time in this article but I don’t know if I see all of them center to heart. There’s some validity but I’ll take maintain opinion till I look into it further.

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