Citi’s Banamex, regulator clash over who played key role in loan fraud

Preliminary findings of a probe by Citigroup’s Mexican unit, Banamex, into how it lost more than $500 million in a corporate loan fraud differ markedly from the results of a separate investigation by the Mexican banking regulator. Banamex has zeroed in on Jose Ortega, a middle manager the bank fired in 2012, as a key person in the fraud involving Mexican oil pipeline maintenance company Oceanografia, according to two people familiar with its probe. But the Mexican bank regulator, Comision Nacional Bancaria y de Valores (CNBV), has poured scorn on this suggestion and says Ortega probably played only a bit part. The real problem was with the bank’s institutional failure to have proper controls in place, according to Reuters.