Saturday, January 10, 2009

NEW YORK | Citigroup board member Robert Rubin, who has drawn heavy criticism for his role at the embattled bank, has resigned as a senior adviser.

Mr. Rubin, 70, will continue to serve as a board director until his term expires at the next annual meeting in the spring, Citigroup said.

As Citigroup’s stock plunged over the past year, the veteran of Wall Street and Washington came under fire from critics who thought he should have had a more active role in preventing the bank’s recent problems. Citigroup’s predicament drove it in November to seek federal assistance.

A person at Citigroup close to the situation, who spoke on the condition of anonymity because he was not authorized to speak for Mr. Rubin, said “there was no inside pressure” for Mr. Rubin to leave Citigroup. “It was his feeling that the time was right,” the person said. He added that there was no government pressure, either.

Mr. Rubin was U.S. Treasury secretary under President Bill Clinton. For several decades before that, he worked at the Wall Street firm Goldman Sachs Group Inc. But his experience didn’t keep Citigroup from taking on a massive amount of risk that relied on the housing market staying afloat.

“Robert Rubin, in my opinion, spent a decade neglecting his duties as a director, just judging by their performance,” said Christopher Whalen, managing director of Institutional Risk Analytics. “It’s the job of the board to supervise the managers.”

Citigroup was hit particularly hard by the housing market downturn because the bank was heavily invested in mortgages and other loans. The company has reported four straight quarters of losses, and is expected to post yet another loss when it releases fourth-quarter results later this month.

Leaving Citigroup, where he has worked for nearly 10 years, “is not a decision that I have come to lightly,” Mr. Rubin said in a letter released by the bank. “But as I enter my 70s and with all that is now in place at Citi, I believe the time has come for me to make these changes.”

He also wrote: “My great regret is that I and so many of us who have been involved in this industry for so long did not recognize the serious possibility of the extreme circumstances that the financial system faces today.”

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