Former banking CEOs, Vikram Pandit of Citigroup Inc. (NYSE:C) and Bob Diamond of Barclays PLC (LON:BARC) (NYSE:BCS) will soon return to Wall Street, according to a report from Mark DeCambre of the New York Post.
The article reported, the two fallen bank executives are planning to launch their own investment firms.
Last October, there were already rumors that Pandit was in discussions with Sutesh Sharma, founder of Portman Square Capital, a hedge fund based in United Kingdom, regarding his possible return in the hedge fund business after his resignation as CEO of Citigroup.
At that time, some people in the industry such as Robert Olaman of Alpha Search Advisory Parners expressed his opinion that it will not be surprising if Pandit decideds to join an existing hedge fund or start his own firm.
Pandit was an accomplished hedge fund manager before selling Old Lane Fund to Citigroup Inc. (NYSE:C) for $800 million in 2007. He gained $165 million from the transaction and joined the bank as its CEO.
Pandit’s resignation from Citigroup Inc. (NYSE:C) became controversial due to reports that he was pressured to step down from his position by shareholders and fellow executives within the bank. The Securities and Exchange Commission (SEC) launched an informal investigation as a result of the resignation.
The SEC’s inquiry was focused on the issue of whether the bank properly revealed the information about his dismissal. During interviews and conference calls with analysts, Pandit said he chose to submit his resignation and the board of Citigroup accepted it.
The second player expected to make a return to finance is Diamond, who is planning to establish his own hedge fund in New York. A source familiar with his decision was quoted by the New York Post saying, “Bob wants to come back to Wall Street and whether it is soon or in six months isn’t clear.”
According to report, the former Barclays PLC (LON:BARC) (NYSE:BCS) CEO hired Paul Verbinnen, a public relations professional and co-founder of Sard Verbinnen & Co and try to use his list of corporate clients as a leverage.
Diamond resigned as CEO of Barclays PLC (LON:BARC) (NYSE:BCS) amid U.S. and U.K. regulators investigation in relation to the inter-bank rate rigging scandal .The bank admitted that it was involved in manipulating the setting of the London Interbank Offered Rate (LIBOR), and agreed to pay a penalty of $430 million to settle the case.