Citigroup: It's time to talk Pandit

October 29, 2012: 10:20 AM ET

Amid reports that the SEC is investigating Vikram Pandit's departure from Citigroup, the bank's board needs to take a very close look at how it shares information with shareholders and the public.Vikram Pandit

FORTUNE -- Is the SEC investigating former CEO Vikram Pandit's departure from Citigroup?

The regulator wouldn't comment on the issue for this article, but that's what Fox Business reported last Tuesday. The issue, according to Fox's reporting, is around the timing of disclosure and whose idea it was for Pandit to leave, the board's or Pandit's.

Perhaps it was both – and perhaps both were happy with the outcome. Pandit's October 16 resignation announcement came six months -- almost to the day -- following the historic no vote by shareholders on the bank's executive pay. That vote came on the heels of the Federal Reserve's denial of Citi's (C) request to raise its dividend.

No doubt the pay vote and the regulatory impasse sent a signal to the board about stakeholders' views of the bank's execution. Board members understand that shareholders don't vote down executive pay if they're happy with a company's performance. (Think about Apple.) Mike O'Neill's ascension as Citi's new independent chair piled on at the very same time to create a cocktail for change at the firm.

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According to a Citi regulatory filing, John Havens also resigned as president and COO of the company and CEO of the bank's Institutional Clients Group the same day that Pandit departed. "These resignations occurred after the close of business on October 15, 2012," the filing stated. Citi's third quarter earnings conference call was held earlier that day -- and the bank announced the exits in an early October 16 press release. Havens had co-founded Old Lane hedge fund with Pandit, which Citi subsequently purchased.

The New York Times has described Pandit's departure as a choice among three options provided by Mike O'Neill. Pandit could resign immediately, resign at the end of the year, or be fired without cause. He chose the former. Three board members then confronted Havens, according to the report, saying, "Vikram has offered his resignation, and we would like to give you the opportunity to offer yours." More

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