Drawing on her long experience suing Wall Street firms for harassment and discrimination, Linda Friedman thinks Citi had a simple way to avoid a scathing lawsuit filed by a former executive this week.
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It could have taken seriously the internal investigation it commissioned last year after receiving complaints about wealth head Andy Sieg, she said.
Friedman, a founding partner of the Chicago-based firm Stowell & Friedman and a longtime advocate for civil rights in the financial services industry, rocked the financial services industry with a lawsuit filed on behalf of former Citi global head of platform and experiences Julia Carreon. The action was officially aimed at Citi, accusing the firm of various counts of sexual and racial discrimination. Peppering the suit, though, were numerous allegations of sexual harassment by Sieg.
Friedman confirmed this week that Carreon was among six managing directors whose complaints about Sieg prompted an inquiry last year into reports that he had mistreated subordinates, particularly women. Friedman said that investigation gave Citi — which brought in the law firm Paul Weiss to help conduct the probe — an opportunity to respond properly to Carreon and other women executives’ concerns.
READ MORE: Update: Citi’s Sieg under outside legal investigation
Nothing, though, was ultimately done. Now the unfortunate result is a lawsuit, Friedman said.
“Nobody benefits when these things are aired out publicly,” she said. “What we really want is change and relief for the women who have been harmed.”
Carreon’s complaints among those that led to internal probe at Citi
Friedman said she believes she helped spark Citi’s internal investigation last year when she brought the concerns of four of her clients — including Carreon and three other women at Citi — to the attention of the Paul Weiss firm, Citi’s longtime legal representative. Bloomberg then reported that Paul Weiss had been enlisted by Citi to look into allegations that Sieg was given to expletive-filled rants and poor treatment of members of his staff.
Friedman said she was eventually presented with the results of the investigation, which led to no action by Citi. She and her client then began considering other options, she said.
“We believe there was a pattern and practice of engaging in misconduct toward senior women, more than a dozen other women,” Friedman said.
Paul Weiss did not return a request for comment.
Rather than discipline Sieg, Citi responded to reports of the investigation with statements of renewed confidence in the work he has been doing to overhaul the firm’s wealth management business. Citi CEO Jane Fraser said in an interview with Bloomberg TV in September that the firm had taken the inquiry into Sieg’s alleged behavior seriously “and I’m very comfortable with the way we came out.”
READ MORE: Citi CEO ‘comfortable’ with outcome of probe into Sieg’s conduct
By the time Paul Weiss completed its investigation into the complaints against Sieg, Carreon had left. She resigned her position as global head of platform and experiences at Citi in 2024, roughly three years after joining the firm from Wells Fargo.
While not naming Sieg as a defendant, Carreon’s suit directly accuses Citi of sexual and racial discrimination for subjecting her to open hostility, disrespect and contempt from certain white male employees. She said the conditions became so intolerable that she was forced to quit. Her LinkedIn page now lists her as strategic advisor to the RIA Veritas Wealth Partners.
A spokesperson for Citi said “This lawsuit has absolutely no merit and we will demonstrate that through the legal process.”
Suit faults Sieg for not stepping in to defend Carreon
Sieg was recruited to Citi from Merrill in 2023, and Carreon said her troubles at Citi predate his arrival. But it was not long after his placement at the top of the wealth management division, according to her suit, that rumors began to circulate that Carreon owed much of her success at the firm to a romantic relationship she was allegedly having with Sieg.
Those insinuations eventually resulted in their own human resources investigation. Sieg, though, was left out of the inquiry, according to the suit, and never stood up to deny the rumors or defend Carreon.
“It was never him being investigated for having an affair,” Friedman added. “What the [lawsuit] alleges is that when the investigation started, he stopped communicating, he stepped away and he never did what a strong lead should do and say, ‘This is unacceptable.'”
READ MORE: What Sieg’s public rebuttal could mean for his future at Citi Wealth
In a response also filed this week, Citi accused Carreon of dragging in the allegations of sexual harassment merely to ensure her case gets heard in court, rather than before a panel of industry arbitrators. Carreon’s suit cites the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act, a 2022 law meant to ensure these sorts of claims are “adjudicated and redressed through the court system.”
Citi’s response, which seeks to force the case into arbitration, notes several compliments Carreon paid in writing to Sieg around the time of her resignation. In a letter to Citi’s human resources department, she suggested she had no desire to sue the firm.
“I would hate to do that to Andy given what an incredible advocate he’s been, and I hate to even write this bc it’s so obvious,” she wrote. “Andy is an advocate bc he knows I’m in the 1% of people on Wall Street who can execute the right way: collaboratively.”
Friedman acknowledged Carreon wrote the message but said it’s nowhere nearly as damning as Citi would have it be. She said Carreon simply left Citi thinking Sieg was her supporter only to have it dawn on her later that he had been undermining her.
“With the benefit of healing and time, and talking to the community of other women, she was better able to understand he wasn’t the ally that she thought he was, which is the conclusion many women reach in these situations,” Friedman said. “He not only wasn’t her champion and did not support her; he also played a pretty significant role in her demise based on what he did not do.”
Are doors opened by ‘boom-boom room’ case now closing?
Friedman has made her mark on Wall Street over the years with a series of big legal victories in discrimination and harassment lawsuits filed against big banks and other firms. Perhaps no case had bigger repercussions than the “boom-boom room” scandal of the 1980s.
That case arose after former employees of the securities firm Shearson/American Express mounted a discrimination suit against the firm’s successor, Smith Barney, over complaints of lewd and harassing comments and behavior. The name “boom-boom room” referred to a basement party cove in the firm’s Garden City, New York, office.
READ MORE: ‘Honeypot’ suit against Morgan Stanley alleges behavior Wall Street has tried to leave behind
By a strange coincidence, it was Citi that eventually settled the case. After acquiring Smith Barny in the early 2000s, Citi agreed several years later to pay $33 million to resolve the “boom-boom room” allegations.
Friedman said she has always viewed that case as pushing the doors of Wall Street open to women. Many of her clients with complaints against Citi are women in their 50s and 60s, she said, meaning they most likely entered the industry in the wake of the “boom-boom room” scandal.
“For almost 40 years, I perhaps naively believed that these corporations would change, that they would realize that including women in the power circle drives profit and revenue,” Friedman said. “What has changed instead is that women now know what gender bias is, that it still exists and they are speaking out.”
What could be next for Sieg
With Citi’s recent internal investigation with the help of Paul Weiss followed by Carreon’s lawsuit, Sieg has now found himself at the center of two heated controversies within less than six months. One option for the firm will now be to try to reach a settlement with Carreon — although Carreon posted on LinkedIn on Monday that she had spent “14 months trying to resolve this matter privately, but Citi’s lawyer said he welcomed a public match.”
Hillary Nappi, a partner at AWK Survivor Advocate Attorneys and an advocate for victims of sexual harassment, said it’s likely Carreon’s case will involve a review of Citi’s previous internal investigation and an attempt to decide if executives made the right decision with the information they were presented.
“And then it’s always a question of: What is the best standard and the best practice for this particular issue?” Nappi said.
Nappi said it’s true most cases like Carreon’s are resolved by a settlement rather than going to trial. The terms often depend on what the plaintiff wants.
“If your client is looking for a monetary settlement because she needs treatment and she can’t afford the right mental health treatment after a situation like this, that is a goal,” Nappi said. “In this particular case, lost wages would be a goal. Perhaps even future damages.”
Other times, plaintiffs will demand organizational change at a firm. That can extend to the removal of the person accused of sexual harassment.
“I don’t know what this particular plaintiff’s agenda is,” Nappi said. “She could want to see institutional change, and oftentimes that’s part of a settlement. Sometimes my clients will seek a little less on the monetary value if they’re getting an institutional policy change that is part of their settlement.
What’s unlikely to happen is an outright dismissal of Sieg, said Phil Waxelbaum, the founder of the advisor-recruiting firm Masada Consulting and former head of Deutsche Bank’s private client group. Having stood by him once before following the internal investigation, the firm would almost be admitting to doing something wrong previously if it pushed him out now.
“What they could do is encourage Andy to resign and to make a statement saying, ‘Given the circumstances of litigation, I cannot give my full attention to the role. And while I would like to have completed the job at Citi, it’s not in the best interest of the organization or the people that I’ve come to think so highly of,'” Waxelbaum said. “That would be the soft step backward.”
Lawyers predict uptick in Wall Street suits amid anti-DEI push
Citi, meanwhile, is also a defendant in a lawsuit brought by Ardith Lindsey, a managing director in the bank’s global equities market division who is currently on leave. Lindsey alleges that she has experienced a hostile work environment and unlawful discrimination, and was coerced into a relationship with a boss — allegations Citi has denied.
Both Friedman and Nappi said they think lawsuits like these will become only more common amid the Trump Administration’s vocal rejections of policies meant to promote diversity, equity and inclusion at private companies. Friedman blamed the same anti-DEI push when her law firm sued Merrill in 2024 after it adopted an internal rule meant to require discrimination claims go before industry arbitrators rather than judges.
Friedman said Carreon’s case and others like it illustrate an unfortunate assumption that persists on Wall Street despite many attempts to kill it. It’s that when a man rises to the top, the cause is sheer ambition and talent.
“But if a woman has a similar experience and gains access to the inner circle,” Friedman said, “it’s on account of sex and not because she’s a brilliant leader.”
