Citi looks to reverse research separation

Citigroup has considered moving its stock research analysts back to its institutional securities business five years after they were separated under pressure from regulators investigating Wall Street conflicts of interest.
Some top executives have opposed the move, which could revive fears about bankers' influence over research on clients.
Chief executive Chuck Prince played a leading role in negotiating Wall Street's settlement with regulators and has sought to improve Citi's "ethical" culture. Under the original plan, equity research would have moved into what will now be a new institutional clients division, created in a shake-up announced on Thursday, headed by Vikram Pandit.
The reshuffle triggered the departure of Tom Maheras, Citi's capital markets chief, after Mr Prince sacked Randy Barker, a co-head of its fixed-income business, after Mr Maheras tried to resist the move.
The shake-up followed Citi's admission last week that it had suffered $3.3bn of write downs and losses in the credit market turmoil.
One insider said the current proposal was for research to be a joint venture between Smith Barney, Citi's private client business, and its institutional equities arm.
All existing safeguards would remain in place and bankers would have no influence over research, the insider said.
Under former chief executive Sandy Weill, Citi was a target of the campaign by Eliot Spitzer, then New York state attorney-general, to stamp out Wall Street conflicts of interest. Part of Mr Spitzer's investigation concerned the role of Mr Weill in determining an AT&T stock rating.
Mr Weill acknowledged asking Citi analyst Jack Grubman to "take a fresh look" at the company. In the run-up to the settlement, in which Citi paid $400m, Mr Weill said research would move to Smith Barney to "help assure that all equity research at Citigroup will be independent of corporate and investment banking and underwriting". Citi declined to comment.
The shares were down 0.9 per cent at $47.87 at the close in New York.
credited by: ft.com