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Citigroup Denies Rumors That CEO Will Resign

Charles Gasparino
Wednesday, 17 Oct 2007 | 12:13 PM ET

Citigroup denied speculation in the markets that embattled CEO Charles Prince had been asked to step down, a rumor that briefly sent Citi shares higher.

Chuck Prince
AP
Chuck Prince

A Citi spokesman told CNBC that Prince has the "full support of the board and from (Chairman) Bob Rubin and others (on the board) ... There's complete support for Chuck and the strategy."

The spokesman also denied rumors of an emergency board meeting today, as well as speculation that the company may implement a power-sharing strategy.

Prince has come under fire as the company's shares have struggled amid the credit crunch that has pounded the financial sector. Citi profit plunged 57 percent in the third quarter and its shares have acted as a weight on the Dow Jones industrial average.

Citi shares are down 14 percent this year, primarily due to troubles with its fixed income and consumer businesses. The company joined fellow financial institutions Bank of America and JPMorgan Chase in announcing a plan this week to finance a rescue pool of short-term debt that would insure liquidity.

Chuck Prince Rumor Mill
The truth behind the rumors, with CNBC's Charlie Gasparino

The company said when announcing its earnings report that it would move away from riskier aspects of the business and turn to areas where it has enjoyed the most success.

Shares were up on speculation that the bank's board was meeting to "discuss a replacement for CEO Chuck Prince," said William Lefkowitz, options strategist at brokerage firm vFinance Investments. Another trader also confirmed the rumor that was behind the share move.

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