Citi's Troubleshooter

Citi Brings in a Troubleshooter
by Portfolio Staff Nov 6 2007
Executive to manage bank's subprime debt.

A diversified global financial services holding company whose businesses provide a range of financial services to consumer and corporate customers.
Primary executive: Charles Prince, CEO/Chairman of the Board/Director
Citigroup has named an executive who helped unwind the hedge fund Long-Term Capital Management in 1998 to manage most of its $43 billion portfolio of positions tied to subprime mortgages, Reuters and Bloomberg News report.

The appointment of Richard Stuckey comes after Citigroup announced a shake-up at the top with the departure of Charles Prince as chief executive and said that it would write down as much as $11 billion of subprime debt.

Stuckey, now 51, was one of a six-member oversight committee that ran Long-Term Capital after 14 financial institutions rescued the hedge fund from collapse. He is a former head of risk management at Citigroup.

Citigroup might be an even greater challenge than Long-Term Capital, Lawrence White, professor of economics at New York University's Stern School of Business, told Bloomberg News, noting that many subprime-tied securities rarely trade and are difficult to value.

"The opaqueness as well as the stinkiness are greater," White told Bloomberg.