Citigroup Inc. has been smacked with a suit from a former broker who is trying to stop the New York-based banking behemoth from clawing back the remainder of a signing bonus he owes for leaving the firm in 2006.
Thomas Banus, who filed the suit on Wednesday, began working at Citigroup Global Markets as a securities broker in its Cleveland office in 2004, according to a copy of the complaint, which was provided to InvestmentNews by Mr. Banus' attorney Leon Greenberg of Las Vegas.
As part of Mr. Banus' employment contract, he received a signing bonus, which was structured as a forgivable loan to be paid out over a term of seven years, the complaint noted. If Mr. Banus left Citigroup within that period, the unforgiven prorated share of the remaining principle — with interest — would be due immediately, according to the court filing.
However, Mr. Banus argued in his suit that because Citi “may terminate the employment and accelerate the note at will, with no loss to itself, with or without prior notice, this is an illusory contract.”
Citigroup has demanded repayment of the unforgiven portion of the note with interest in the amount of $39,150.31, the filing said.
Mr. Banus now plans to seek class status for the suit on behalf of roughly 500 other Citigroup brokers who have had similar issues with these agreements in recent years.
“We believe the suit to be without merit and will defend ourselves against these claims,” Citigroup spokesman Alexander Samuelson wrote in an e-mail.
Mr. Banus now works for Walnut Street Securities in Cleveland, Bloomberg reported. He filed the suit in the U.S. District Court for the Southern District of New York in Manhattan.
