Toomre Capital Markets LLC

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Tom Maheras

Robert Rubin Packs It In At Citigroup

Friday January 9th 2009, former Goldman Sachs CEO and former Treasury Secretary Robert Rubin announced his resignation effectively immediately from Citigroup. After arriving in 1999 with great fanfare as one of the world's savviest and highly respected financial executives, he collected more than $115 million in pay while acting as a Citigroup director and senior counselor. Now some 70 years old, Mr. Rubin is leaving on a low note. In his resignation letter, he wrote that his "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."

Many have questioned just what Robert Rubin did that resulted in his being paid about fifteen million dollars per year. Mr. Rubin himself has continually emphasized that he had no operating role at Citigroup and hence should bear little of the blame for the firm's horrendous financial results that partly resulted from his strategic advice. Nonetheless, he has come under considerable fire in the last eighteen months for his strong role in pushing Citigroup back in 2003 through 2006 to increase its risk-taking as the housing and derivatives bubbles expanded.

The net result of that increased risk taking without proper risk management controls has been devastating. During the past eighteen humiliating months, Citigroup has witnessed the ouster of former CEO Sandy Weill's successor Charles Prince, taken $83 billion in write-downs, raised $36 billion in investor cash, take $40 billion in preference shares from taxpayers and gotten the federal government to backstop more than $250 billion in risky and illiquid assets on its balance sheet.

During the past decade there also has been considerable personnel tumult at Citigroup. His tenure began with the tainted-research scandal that entwined analyst Jack Grubman and Sandy Weill. Then came the missteps that led to Citi's shutting down part of its Japanese banking unit in 2004. Ousted or reassigned executives during his career included such high-profile names as Prince, Weill, Michael Carpenter, Michael Klein, Sallie Krawcheck, Todd Thomson and Tom Maheras.

The constant throughout all this tumult was Robert Rubin. He had a very prominent role in picking several top managers at Citigroup, particularly two recent CEOs including Vikram Pandit. One really has to wonder just what Robert Rubin did each year as a rainmaker that justified his considerable compensation over the past decade.

Toomre Capital Markets LLC ("TCM") is not sorry to see the Robert Rubin period of "nightmare" at Citigroup come to an end. Every time shareholders look at their portfolio statements, they are reminded of the bank's dismal record and its 90% decline in stock price. Thank you Mr. Rubin for your "service"!! Of course, you were just a bystander to this disaster and worth every cent paid to you. We really do understand and appreciate!!