While Las Vegas’ reputation in popular culture paints it as a city devoted to its tourism industry, in reality it also hosts numerous large companies, many of which have established global presences. When international business disputes arise, they can stir up complicated issues for American companies, particularly if they are already dealing with regulatory or management issues in their home offices.
Banamex, the Mexican banking arm of Citigroup, was found to have engaged in fraud to the tune of $400 million. This news comes at a bad time for the American bank, as this negative press may reinforce the notion that Citi has overextended itself in the international sphere. The company is one of the most far-reaching global banks; foreign financial activities constitutes over half of Citi’s overall revenue. It is unclear from reports whether the Banamex fraud has resulted in any international business litigation so far.
Concerns regarding the bank’s management were spurred back in 2012, when the CEO left the company as a result of the bank’s inability to pass the Federal Reserve’s stress test. While the new chief executive has received credit for making headway in some areas, Citi’s recent failure of the Fed stress test has called the viability of the bank’s structure into question.
When a large corporation is confronted with the possibility of international business litigation, executives may need to make decisions regarding the company’s future as a whole. This will likely require a good deal of legal counsel, and these executives may find it beneficial to seek out an attorney’s advice as soon as possible.
Source: The New York Times, “Citi’s Blues,” Sydney Ember, Mar. 28, 2014